There are no quick fixes for South Africa’s economy

IF EMIGRATION is a barometer of confidence in a country’s future, then South Africa, where a growing number of people are upping sticks, is in trouble. Private schools complain about losing students as families move abroad. More people are selling their homes in preparation for leaving (see chart). “Emigration sales” are a fixture of neighbourhood Facebook groups, with leavers peddling their patio furniture and braais. But unlike previous waves, this is not just white flight. There has been a big increase in black, coloured (mixed-race) and Indian people who are looking to go. Many cite declining opportunities.

There was a burst of optimism among South Africans when Cyril Ramaphosa (pictured) took over as president seven months ago, after nine ruinous years under Jacob Zuma, who is due to stand trial for corruption. But South Africa’s long-term fortunes are looking ever gloomier. The country entered a recession earlier this month—the first since 2009. Weak growth is expected next year. Joblessness is over 37%, if one includes people who have given up looking for work. The murder rate is also rising. The country’s sovereign debt has been downgraded to junk by all of the big credit-rating agencies except Moody’s, which has it a notch above sub-investment grade and will review it in October. The rand has fallen nearly 20% this year.

When announcing his recovery plan on September 21st, Mr Ramaphosa admitted that “our economic challenges are huge, and our difficulties are severe.” But his solutions are meagre. There will be no fiscal injection—because there is no money for it. Instead, about 3% of the budget, which totals 1.67trn rand ($120bn), will be reallocated to create jobs and fuel growth. This will include support for black commercial farmers and small entrepreneurs. A 400bn rand infrastructure fund, drawn mainly from the existing budget and spread over three years, hopes to attract private investment. Details will be filled in when Mr Ramaphosa’s finance minister, Nhlanhla Nene, delivers the government’s mid-term budget statement on October 24th. Fitch, a ratings agency, doubts the plan will do much for growth.

An ill-educated workforce, inflexible labour laws and corruption will continue to hold South Africa back. But Mr Ramaphosa is at least moving ahead with reforms. He has announced a review of electricity, port and rail tariffs to reduce the cost of doing business; and he promised to change confusing visa regulations, which hinder tourism. He will also make it easier for skilled foreigners to work in South Africa. New rules on mining aim to provide more certainty to industry.

Efforts by Mr Ramaphosa’s party, the African National Congress, to change the constitution to allow the expropriation of land without compensation have added to the economic uncertainty. A panel to advise the government on land reform includes some sober academics and agriculture experts, but it will take more than that to reassure investors.

The president is stepping up his efforts over the next month, mindful of elections due between May and August next year. A jobs summit in early October will bring together government, labour and business representatives; an investment summit will follow later in the month. Meanwhile, many well-to-do South Africans seek second passports, the first step towards emigration. Whether they stay or go may depend on Mr Ramaphosa’s ability to jump-start the economy.