In a time of intense contestation on the correct economic policy for South Africa, economists from the left, right and centre all agree on one thing: productivity matters.
As left of centre and self-proclaimed progressive Paul Krugman put it: ‘Productivity is not everything, but in the long run it is almost everything.’ (He won the Nobel prize for economics.)
The different sides in South Africa also agree on how productivity should be improved:
- more infrastructure,
- more human capital development (skills, education and training),
- more technology and innovation, and less corruption, both in the private sector (Steinhoff, Tongaat, VBS) and in the public sector (blatant theft and ‘tenderpreneurship’).
The widely used measure of productivity is gross domestic product (GDP) per hour worked. The South African Reserve Bank (SARB) keeps an updated database on it and that is what we use here.
What is South Africa’s record on this all-important matter?
This Political Research Note was prepared by JP Landman in his personal capacity. JP is an independent political and economic analyst and the opinions expressed in this article are his own and do not reflect the views of the Nedbank Group or Asset Tree (PTY) Ltd.