Identifying weaknesses With a diminishing base of 7.10-million individual taxpayers, of which less than 307 912 earn more than R1-million a year (National Treasury, 2020), personal income tax is only enough to fund about 80% of the civil servant bill and debt serving.
Incompetence and corruption limiting State capacity The political environment is not conducive to growing the economy. Political leadership in a number of government positions lacks competency. This is highlighted by the use of consultants and outsourcing rather than the building of capable and competent State machinery. If there were a conducive political environment, incompetent government employees would leave their positions to make way for those who can do the job. Evidence emerging from the Zondo Commission of Inquiry into Allegations of State Capture points to a serious lack of competence and a high incidence of corruption at State institutions and State-owned enterprises (SoEs), including at Transnet, Eskom, Denel, the South African Broadcasting Corporation (SABC) and law enforcement agencies (Zondo Commission, 2021a).
Institutional weakness Political risk is rising globally, particularly since the onset of the Covid-19 pandemic. Dealing with political risk in an emerging market requires strong institutions, many of which have been significantly eroded in South Africa in the past decade. For example, failure to insulate the SABC from vested political interests has left the public broadcaster in a crippled state, hobbled by financial bankruptcy and dependent on government bailouts (Ndlovu, M, 2019). Institutional weakness and cadre deployment enabled State capture to flourish. Had certain checks and balances been in place, many problems related to State capture may have been avoided (Zondo Commission, 2021b). There is also concern that Parliament acts as nothing more than a rubberstamp for what comes from the executive – another example of how institutional weakness affects the country’s ability to perform. Parliament’s oversight failures have been laid bare at the Zondo Commission of Inquiry, with testimonies of how administrative proceedings were used to sidestep oversight. Former African National Congress Member of Parliament (MP) Zukiswa Rantho testified in early 2021 about MPs being more loyal to the ruling party than doing what is right (TimesLive, 2021).
Labour and skills South Africa has a fairly sophisticated formal sector, but suffers from extensive unemployment. Only 16.40-million out of a labour force of 23.10-million have managed to
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