abstract

This paper explores potential explanations for south africa’s economic underperformance since  1994.  Despite  the  country’s  substantial  subsoil  mineral  wealth  endowment,  the development  promise  typically  associated  with  such  wealth  has  not  been  realised. The democratic dividend has produced some level of macroeconomic stability, but large fault lines have emerged, especially since the 2008 financial crisis. The paper examines whether ‘Dutch disease’ explanations can account for weak manufacturing performance, but finds that they are inadequate. Given mining’s continued importance to the economy, the  paper  explores  whether  mineral  resources  could  be  better  leveraged  for  inclusive development. It concludes that more coherent institutional choices are required if this is to come to fruition. Currently, the mineral rights regime, traditional leadership legislation and  industrial  policy  are  not  sufficiently  integrated  to  give  effect  to  the  ambitions  of the  National  Development  Plan  as  they  pertain  to  the  potential  contribution  of  mining to  the  economy.  Mineral  rents  could  provide  the  impetus  for  upstream  technology  and product  development,  but  the  mining  industry  first  has  to  generate  growth.  Beyond mining, economically inefficient visa regulations, electricity shortages and a general lack of policy clarity all contribute to south africa’s weak economic performance. addressing these  factors  would  attract  the  growth-inducing  investment  required  for  sustained  and inclusive economic growth.