In South Africa, it feels like we are in a constant struggle between politics and progress. Decades of painfully slow economic growth have resulted in a mountain of regulations that hinder business development and draconian labour policies that make it difficult for companies to access the skills they need.
In a country with extremely high levels of poverty and unemployment, the only solution is economic growth, but the easiest way to achieve this is being hampered by policies like broad-based black economic empowerment (B-BBEE). If companies grow, employment will naturally grow, creating a cycle of growth. There is no way to circumnavigate this chain, as South Africa’s latest statistics prove.
The economy grew by just 0.1% in the first quarter of 2025. At least it wasn’t the 0.1% contraction predicted by Bloomberg, but with economic growth at less than half the rate of population growth, we are essentially in a recession. South Africa’s GDP figures have been terrible over the past 10 years, and unemployment has continued to rise. The official unemployment rate in the first half of 2025 rose from 31.9% to 32.9%, and the unemployment figure – including those that have given up looking for work – has risen to a staggering 43.1%.
MIP’s fintech administration solutions currently administer a combined 24 million beneficiaries in the South African market. With this broad view, we can see that there are many more low-income earners in the economy than the official unemployment rate suggests. The combined number of policies in the South African market shows that many more people are earning an income than the authorities give credence to. If this is the case, then the “informal economy” is booming but very reliant on the success of the “formal economy”.
Strategic shifts
South Africa is not the only middle-income country facing these problems, but it’s one of the few that is not actively pushing a growth agenda. Countries like China have aggressively pursued economic growth, while Singapore’s solid economic and political policies allowed the Southeast Asian country to jump quickly up to the higher-income bracket.
In fact, in 2013, Singapore’s economy was smaller than South Africa’s (US$300-billion compared to $400-billion) and the country was facing labour shortages due to an ageing population. Thanks to a series of strategic shifts, long-term planning and adaptation to global trends, Singapore’s government grew its economy to $500-billion in 2024, compared to South Africa’s $403-billion in the same year.
Read: It’s time to rethink B-BBEE
Singapore did this by pursuing a three-pronged approach that allowed the country to build a resilient, high-value economy. Firstly, the government decided to focus on skills. Initially, the country imported the best intellectual capital and management capital available, using this as a basis from which to upskill its population through a programme called SkillsFuture, which promoted lifelong learning and vocational training. This is in complete contrast to what the South African government legislated in the same period – with completely different outcomes. Surely, every proud South African wants a job!
Importing skilled people from all over the world helped inform the next policy that proved vital to Singapore’s growth: English as the lingua franca. Making English the official language of business in Singapore removed language barriers for companies wanting to trade with other English-speaking economies – more than half the world. English is spoken in 88 countries and is also the language of the United Nations and the EU, making it the dominant language of business on the planet and the language that is needed to program 99.9% of all computers in the world.
The third vital strategic imperative that allowed Singapore to become the economic powerhouse it is today was the implementation of a zero-tolerance policy for corruption. Politicians’ salaries were increased to ensure that they would have no reason to be tempted into unethical deals, and today the Transparency International Corruption Perceptions Index (TI-CPI) has ranked Singapore the third least corrupt country in the world.
What we can learn from Singapore
Skills are vital. As long as we continue to push people into positions they are not equipped for to fill a quota, South African businesses will not be able to grow at a pace that can have long-term benefits for the country.
Unlike Singapore, which imported the skills it needed to kick-start its growth, South Africa is exporting its expertise.
The UN’s International Migrant Stock report shows a steady outflow of skilled South Africans. In 2020, 900 000 South Africans lived abroad, and this number surpassed a million in 2024. This translates to an average of 74 people leaving every day between 2020 and 2024. It has reached such concerning levels that the Allianz Risk Barometer for 2025 showed that the shortage of skilled workers has become one of South Africa’s biggest risks.
Similarly, despite the fact that English is one of South Africa’s official languages, the government is pursuing a policy that will result in fewer South Africans being fluent in English. The Bela (Basic Education Laws Amendment) Bill proposes that school governing bodies determine language policies, and that these policies must be limited to one or more of South Africa’s official languages and consider the broader community’s language needs.
What the Bela Bill ignores is the fact that fluency in English is essential in the business world. Business contracts and communications are conducted in English, and most programmers code primarily in English. If you cannot speak English well, how can you write complex business logic and algorithms in an English programming language? You cannot speak isiZulu or Afrikaans or isiXhosa in the US or China, two of the largest economies in the world. Even in China, the predominant programming language is English.
One decade
Singapore also proves that eliminating corruption guarantees improved economic growth.
In a world that only continues getting more competitive, South Africa is lagging further and further behind. We need to ask our politicians to stop being selfish and put the South African people first. We have to take off our “freedom fighter” veneer and start thinking economy first in everything we do. We must focus on growing our economy, and to do that we have to forget about everything else and generate jobs. If we look to Singapore as an example, we could change our economy into a global powerhouse in one short decade.
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- The author, Richard Firth, is CEO of MIP Holdings
