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06 March 2020 | Story Valentino Ndaba | Photo Stephen Collett
Lesetja Kganyago, Governor of the South African Reserve Bank
Reserve Bank Governor, Lesetja Kganyago, presented a public lecture at the UFS on 4 March 2020.

With a 7% fiscal deficit on the Gross Domestic Product (GDP) projected by the National Treasury for the 2020/21 financial year, it would not take long to arrive at a dangerous level of debt at the rate that South Africa is borrowing. Although the South African Reserve Bank Governor, Lesetja Kganyago, does not consider a debt to GDP rate of 60% a disaster, he did express his concern regarding the country’s fiscal deficits being over 6% of the GDP.

Governor Kganyago presented a public lecture at the University of the Free State (UFS) on 4 March 2020, focusing on how we should use macro-economic policy and its role in our economic growth problem.

Unsustainable policies 
South Africa’s fiscal situation is not about tight monetary policy. According to the Governor: “Weak growth is endogenous in our fiscal problems. We cannot keep doing what we are doing and hope that growth will recover and save us. Growth is low, in large part, because of unsustainable policy.”

Avoiding an impending crisis
To address the problem, as a policymaker with more than 20 years’ experience, the Governor suggested that the recommendations made by Minister Tito Mboweni be taken into consideration. “The Minister of Finance, Tito Mboweni, is a man who says things that are true even when they are unpopular. His message is that we have to reduce spending and he is right to put this at the centre of our macro-economic debate,” said Governor Kganyago.

The state needs a radical economic turnaround strategy which is able to diminish the risk of losing market access and being forced to ask the International Monetary Fund for help. Governor Kganyago is positive that such a reformative tactic would go beyond monetary policy and ensure that the interest bill ceases to claim more of South Africa’s scarce resources. 

News Archive

Expert in Africa Studies debunks African middle class myth
2016-05-10

Description: Prof Henning Melber Tags: Prof Henning Melber

From left: Prof Heidi Hudson, Director of the Centre for Africa Studies (CAS), Joe Besigye from the Institute of Reconciliation and Social Justice, and Prof Henning Melber, Extraordinary Professor at the CAS and guest lecturer for the day.
Photo: Valentino Ndaba

Until recently, think tanks from North America, the African Development Bank, United Nations Development Plan, and global economists have defined the African middle class based purely on monetary arithmetic. One of the claims made in the past is that anyone with a consumption power of $2 per day constitutes the middle class. Following this, if poverty is defined as monetary income below $1.5 a day, it means that it takes just half a dollar to reach the threshold considered as African middle class.

Prof Henning Melber highlighted the disparities in the notion of a growing African middle class in a guest lecture titled A critical anatomy of the African middle class(es), hosted by our Centre for Africa Studies (CAS) at the University of the Free State on 4 May 2016. He is an Extraordinary Professor at the Centre, as well as Senior Adviser and Director Emeritus of the Dag Hammarskjöld Foundation in Sweden.

Prof Melber argued that it is misleading to consider only income when identifying the middle class. In his opinion, such views were advanced by promoters of the global neo-liberal project. “My suspicion is that those who promote the middle class  discourse in that way, based on such a low threshold, were desperate to look for the success story that testifies to Africa rising.”

Another pitfall of such a middle-class analysis is its ahistorical contextualisation. This economically-reduced notion of the class is a sheer distortion. Prof Melber advised analysts to take cognisance of factors, such as consumption patterns, lifestyle, and political affiliation, amongst others.

In his second lecture for the day, Prof Melber dealt withthe topic of: Namibia since independence: the limits to Liberation, painting the historical backdrop against which the country’s current government is consolidating its political hegemony. He highlighted examples of the limited transformation that has been achieved since Namibia’s independence in 1990.

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