If one takes a conventional and – dare I say it – colonial viewpoint on the prospects for a commodity producer like South Africa then the signs aren’t good.
Bringing home the seriousness of the challenge facing the country is the announcement on Monday, February 1 by Kumba Iron Ore that it would be laying off over four thousand workers and contractors. Other mines will be under pressure – World Bank analysts expect prices for 37 of the 46 commodities the bank monitors to fall in 2016.
Economists and investors at the World Economic Forum held in January 2016 in Davos, Switzerland were almost unanimously pessimistic about short to medium-term prospects for countries in Africa and elsewhere reliant on commodity exports. Those commodity exporters which continue to see themselves as pure suppliers of rock and dirt to the world, and a market for the finished goods made from the minerals that are shipped out without any value being added are stuck in a colonial mind-set.
It is a vicious circle – the temptation is to dig as fast as one can when the commodity price is high in order to bring money into the country, and to put on hold plans to build