INFLATION: LESSONS FROM FRANCE AND PORTUGAL : OPINION
BY: CHANON LECODEY MERRICKS | ONLINE EDITOR M@KE K@Si GRE@T ©®™
KASiBCAFRiCA©®™
BY: CHANON LECODEY MERRICKS | ONLINE EDITOR
INFLATION: LESSONS FROM FRANCE AND PORTUGAL BY : GEORGE MAGOMA
The whirlpool of inflation, accounting for the high cost of living, is not unique to South Africa. With foresight, the ANC had in its National General Elections manifesto, as a cushion to inflation introduced measures to insulate the country, especially the poor and the working class from the destructive wave which sweeps across Europe.
For many Africans, France, Portugal, Belgium, Italy, Greece and other European countries recently hit by the wave of inflation were utopian worlds of better living, absence of poverty, crime, corruption borrowing, low interest rates and paradises of unemployment. That's how a colonized mind saw Europe, and continues to see it.
This mentality is buttressed by illegal immigration which sees many Africans perish at sea, crossing into Europe for better opportunities against Africa’s paradox of plenty, mineral resources and other endowments, which if exploited, would stem the tide of poverty and unemployment, unleashing the continent’s great economic potential.
South Africa is not on its own in view of the illegal immigration of people from Bangladesh, China, Nigeria Zimbabwe and Pakistan to its shores, accounting for sex trade, cheap labour, drugs and contraband which affect the economy and job creation.
The same applies to other African countries experiencing the porous influx from Asia and Europe. On the one hand, the world's powerful economy, the United States, is experiencing a tide of inflation after the Federal Reserve hiked the interest rates to 3.7% in September 2026, up from 3.4% in August, with domino effects on other economies, South Africa included. But let's dissect and juxtapose these developments in France and Portugal with South Africa.
Let's migrate a bit to Greece which years back suffered recession during its sovereign debt crisis of 2010–2018, the extent to which its relationship in the Euro family was reassessed, its borrowing and inability to play debt. The same with Brexit, costing billions for the British fiscus. The recent British anti-immigration protests which were not condemned by the world as xenophobic as opposed the world’s condemnation of South Africa as a xenophobic state when it exercised its sovereignty and national security to address the crisis of immigration.
Double standards. Contextually, we reflect on how South Africa survived the wave of recession in 2007 and the eruption of the coronavirus pandemic that ravaged the global economy, shed many jobs and claimed many lives. What did South Africa do? It introduced Temporary Employer-Employee Relief Scheme (TERS) as a temporary intervention and saved many lives as compared to the so-called superpowers, and the falsehoods of systems capable of addressing any problems. With all these developments, and most recently, the Middle East conflict which is ravaging the world economies, accounting for a sharp rise in oil and food prices, food supply, peace and stability. For South Africa, in response to this conflict, a rise in interest rates by the central bank became inevitable. A further rise is expected, compounded by a steep and unprecedented rise in fuel, petrol and diesel prices.
The consumer is squeezed, the middle class has nowhere to go, but to swim against the vicious tide of a troubled economy.
Times are hard, but the times are changing, opening our jaundiced eyes that Europe is not a paradise, immune from war, racism, xenophobia, unemployment, recession, higher inflation but part of the world immersed in endless borrowing to address their economies. Austerity and fiscal prudence are no longer options, but borrowing and more borrowing not to invest in social spending, reconstruction and development as if it will lead to lower inflation, economic recovery to arrest the job haemorrhage and inflation.
The world needs solutions to these developments, a change in policies by the European Union (EU) to assist both Portugal and France. Against a phalanx of police, protesters are not helpful but destroying the state property. These protests against high inflation caught the world and the local authorities off-guard, and are a sign of comfort by the authorities. In South Africa, the local economic shutdowns have subsided, after a new paradigm of collaborations and partnerships.
The country had learned from the painful lessons of mass looting, arson, and infrastructure destruction that took place from 9 to 18 July 2021, titled the July 21 riots. There must be a new shift and approach in addressing global and domestic problems. Shut downs are destructive, shut the economy, shed jobs and deepen miseries of unemployment and stifle efforts to create more jobs and create a hostile environment for foreign direct investment.
The country wooed investors to create jobs, invested in infrastructure to stimulate the economy and introduced a social relief regime and petrol subsidy as a buffer to the debilitating and harmful economic impact and the jobs bloodbath.
The examples of these interventions is President Cyril Ramaphosa’s Investment Initiatives of R1 trillion, cascaded to provincial investment and industrialisation initiatives in the Maluti-aPhofung in the Free State, Tubatse in Limpopo, Namaqua, Gauteng, Mpumalanga and the Special Economic Zones (SEZs) to encourage economic growth, foreign investment, and job creation. This is a solution based model that is proactive than reactive, instilling society’s confidence in the state’s ability to lead development.
These developments say to us that Europe is no biblical land of milk and manna but part of an ecosystem not immune from these problems. South Africa mastered the art of riding the disastrous wave and learned for lessons of its difficult past.
Next time when we think of Europe, think of how South Africa is blessed with policies to change the lives of the people for the better, away from the cocoon of comfort.
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