On Economics Monday, an economist explored the urgent reforms needed across the continent, with particular attention on missed opportunities, untapped capital, and fresh fiscal strategies emerging in key economies.

SA’s economy, once among the most promising on the continent, is now 37% smaller than it might have been had it kept pace with its emerging market counterparts. Economist and Businessman Professor Peter Karungu believes the numbers speak for themselves.

“Over the past 15 years, we’ve seen sluggish growth, hovering between 0.5% and 2%, while others in our bracket have grown by more than double that,” said Karungu. “If we had simply kept up, SA’s gross domestic product (GDP) would be trillions of Rand higher than it is today.”

He places much of the blame on governance failures and unchecked corruption during the last decade. “We were flying blind,” Karungu said bluntly. “There was no economic leadership, no real focus on fundamentals. Corruption took root, unemployment soared, and we’ve been left to clean up the mess.”

To regain lost ground, Karungu says SA must aim for a consistent growth rate above 3%, with a national push to restore accountability. “We need everyone pulling in the same direction, improving skills, paying taxes, rooting out corruption, and seeing themselves as economic participants, not bystanders.”

While SA looks to reset, the rest of the continent faces its own defining question: how to unlock Africa’s wealth for African development?

The African Finance Corporation recently reported that Africa holds an estimated $4 trillion in domestic financial assets, including pension funds, bank deposits, and sovereign wealth funds. These resources, if mobilised effectively, could go a long way in closing the continent’s $400 billion annual infrastructure gap.

But Karungu warns that tapping into this wealth isn’t as simple as it sounds.

“Much of that money is tied up under strict rules, especially pension funds and rightly so,” he said. “You’re dealing with people’s futures. Investing it in long-term infrastructure projects sounds promising, but only if you can guarantee that it won’t be lost to mismanagement or corruption.”

He added that the shadow of corruption continues to limit Africa’s growth potential. “There are credible estimates suggesting that Africa’s GDP could be three times what it is today if public funds hadn’t been misused over the decades.”

Still, there are signs of progress. Ethiopia recently introduced a bold new budget aimed at stabilising public finances. Côte d’Ivoire is shifting its cocoa policy to keep more of the industry’s value at home. Meanwhile, in Mali, tensions are rising around mining operations in the Mala Mala region, raising questions about who truly benefits from the country’s natural wealth.

Back in SA, new workplace quotas and a R4.5 trillion ($247.5 billion) fiscal adjustment plan are on the table, all part of a broader effort to revive economic momentum while addressing deep structural inequalities.

--ChannelAfrica--