South Africa’s economy collapsing one domino at a time
Shaun Jacobs • 7 September 2025
South Africa’s economy is imploding, with key industries falling one by one like a set of dominoes after 15 years of mismanagement and poor government policy.
The job cuts taking place at industrial giants such as ArcelorMittal, Goodyear South Africa, and several mining giants have resulted in the government being deeply concerned about the impact on the economy.
However, the government has failed to make meaningful changes to its approach to economic policy in South Africa and create an environment conducive to investment and growth.
The country’s economy has grown at an average annual rate of 1.1% for the past fifteen years and is now beginning to feel the consequences, with a looming financial crisis and an unemployment disaster.
All the while, the government has failed to grasp how a modern economy functions and what incentivises heavy industry to be created.
This is feedback from former Standard Bank chief economist Dr Iraj Abedian, who said the country should not be surprised by the thousands of job cuts being announced recently.
“It is an unfortunate and depressing conversation to have. It is nothing new and should have been expected over the past 15 years,” Abedian told Newzroom Afrika.
“Our industrial sector has been contracting consistently, and despite all the expressions of concern and government statements, the state has not dealt with the root causes.”
“This is not a recent issue. It is a 15-year consistent lack of attention to what makes an economy favourable for and conducive to industrialisation and the creation of high-value jobs.”
Abedian explained that the thousands of job cuts are almost the end of a 15-year process of economic mismanagement from the government.
South Africa’s key industries, such as steel manufacturing, smelting, mining, and automotive manufacturing are now collapsing under the weight of a stagnant economy and a difficult operating environment.
“All of these are now rapidly, one after the other, like a domino, falling down and imploding with thousands of job cuts,” Abedian said.
Government failures
Chief Executive of Pan-African Investment and Research Services Dr Iraj Abedian –
South Africa’s government has failed to address the root causes of the country’s economic and industrial decline, with its focus being elsewhere.
It has consistently issued statements declaring its grave concern and has appointed various committees to investigate the decline, with little policy changes occurring.
In this sense, Abedian explained that the government has failed to grasp what encourages investment and expansion from businesses in an economy.
“All that we hear from the government is an expression of concern. What is an expression of concern? A minister is not paid to be concerned,” Abedian said.
“A minister or a director-general is paid by the taxpayers to do something about it, or to prevent it, or to come up with solutions. All of us, including my granny, can express concern.”
“The minister and the Cabinet are responsible for doing things as opposed to sitting there and kicking the can down the road.”
Apart from the lack of policy changes or solutions, Abedian highlighted the collapse of infrastructure as one of the key reasons for the decline of South African industry.
South Africa’s infrastructure has collapsed to the point where it is now given a D rating by the South African Institute for Civil Engineers.
This means the country’s infrastructure is at risk of failure and cannot cope with normal demand, with the public being subject to severe inconvenience and danger.
Ten years ago, the country’s infrastructure was rated a C, which meant it was adequate for the immediate future.
Collapsed infrastructure effectively prevents the economy from experiencing any meaningful growth, as the basic resources needed for that cannot be supplied to businesses.
Stanlib chief economist Kevin Lings explained that you simply cannot grow the economy with South Africa’s poor infrastructure.
“Here is the question: Can you grow the economy at 4%? Can you grow South Africa’s economy at 4%? Could we achieve that? No,” Lings said.
“As you try and grow faster, at any rate, you will run out of things. You will run out of electricity. You will run out of water. Run out of rail capacity. Run out of port capacity.”