Tuesday, 3 June 2025

The Economic Freedom Fighters (EFF) notes the first quarter Gross Domestic Product (GDP) figures released by Statistics South Africa today. According to the official data, the South African economy grew by a meagre 0.1% in the first quarter of 2025. This marginal growth is a clear demonstration that the current coalition between the former liberation movement and the racist liberal establishment is incapable of reviving the economy. Instead, it continues to strip the state of its ability to stabilise and grow the economy through a coherent and interventionist strategy.

This dismal economic performance must be read in the context of a broader structural crisis. South Africa’s real GDP growth has been stagnant since 2012, marking more than a decade of economic malaise. In these 12 years of stagnation, the state has overseen the collapse of the country’s manufacturing base, the erosion of public infrastructure, and the deterioration in basic service delivery. The majority of the poor and the working class have borne the brunt of this crisis, experiencing rising unemployment, worsening poverty, and deepening racialised inequality.

The EFF reiterates that the National Treasury and the South African Reserve Bank (SARB) have proven themselves entirely incompetent to lead South Africa’s economic policy formulation and implementation. For three decades, both institutions have served the narrow interests of capital, particularly the white capitalist establishment, while actively liquidating the strategic capacity of the state. Through neoliberal policy prescriptions, they have systematically undermined public sector investment, sacrificed industrial policy for fiscal consolidation, and pursued inflation-targeting at the expense of employment and inclusive growth.

According to the GDP report, the sectors of manufacturing, construction, and mining — traditionally labour-absorbing industries — registered negative growth in this quarter. Manufacturing declined by 2.0%, electricity, gas and water by 2.6%, and construction by a staggering 3.8%. These are not incidental figures. They are a clear reflection of a government without a jobs plan, without a coherent industrial strategy, and without any intention of using the state as a driver of development. Instead of investing in state-led infrastructure development, the government has prioritised the privatisation of state-owned enterprises through Operation Vulindlela, a programme driven by the National Treasury and its global partners in capital accumulation.

The mining sector, once a backbone of South Africa’s economy, continues to contract amid policy uncertainty, lack of beneficiation, and absence of strategic planning. The construction industry, which could be a driver of jobs and infrastructure development, is collapsing due to budget cuts, mismanagement of public procurement, and a state that refuses to build. These crises are not coincidental, they are manufactured through deliberate policy choices.

This data is being released at a critical juncture — as Parliament considers the 2025 fiscal framework and revenue proposals, tabled alongside the May 2025 budget. The EFF has warned, time and again, that National Treasury’s growth projections are overly optimistic, detached from economic reality, and ignore credible data trends. These projections form the basis of revenue forecasts and spending plans, yet they are based on flawed assumptions that undermine the credibility of the entire budget process. It is for this reason that the EFF rejects the 2025 budget in its entirety — it is built on fiction and will fail the people.

The EFF has consistently called for a developmental state model, with state-owned entities at the centre of economic transformation. We propose a new macroeconomic framework rooted in job creation and economic justice. Fiscal and monetary policies must be aligned to clear employment and growth targets. We must rebuild South Africa’s manufacturing base through a deliberate reindustrialisation programme, reject austerity, and end the outsourcing of economic policy to technocrats and financiers.

Only a decisive break with neoliberalism and wholesale privatisation of SOEs will rescue this economy. Until then, South Africa will remain trapped in low growth, mass unemployment, and deepening inequality.

ISSUED BY ECONOMIC FREEDOM FIGHTERS

Sinawo Thambo (National Spokesperson) 072 629 7422

Thembi Msane (National Spokesperson) 061 467 8169

Andiswa Madikazi (Parliament Media Liason) 069 516 4924

Thato Lebyane (Media Inquiries) 078 563 1581