In a recent Business Day opinion piece Peter Bruce writes that ‘inclusive growth” are nice words, but where’s the growth? He argues that

… it is important to understand what is wrong with inclusive
growth. Transformation of a skewed economy like ours is vital. Actual
growth, rather than inclusive growth, may be what’s needed, but even
that might not be enough.

This lead me to a conversation with ChatGPT 4.o about inclusive growth, and we came up with the following.

South Africa’s Growth-Inclusion Paradox: Why Equity Hasn’t Delivered Broad-Based Prosperity

Over the past three decades, South Africa has made inclusion a cornerstone of its development agenda. Policies like Broad-Based Black Economic Empowerment (B-BBEE), land reform, and one of the world’s most expansive social grant systems have all aimed to redress historical injustices and build a more equitable society. Yet, despite these efforts, South Africa’s economy has stagnated, particularly since the 2008 global financial crisis. Real per capita GDP has barely grown, unemployment remains structurally high, and inequality is still among the highest in the world.

So why has inclusion not translated into growth?

Inclusion Without Productivity

Many of South Africa’s redress-focused policies have prioritised representation and redistribution, but have not sufficiently expanded productive capacity. While B-BBEE has created a class of black capitalists, it has not catalysed broad-based entrepreneurial activity or significant job creation. Land reform has moved slowly and, in many cases, beneficiaries lack the support systems needed to make land productive.

Meanwhile, the education system—one of the largest recipients of public funds—continues to underperform, with a large share of young people leaving school without the foundational skills to succeed in the labour market. The result? A growing population of young people excluded from both education and employment, despite the state’s efforts to include them.

Structural Bottlenecks

South Africa’s infrastructure and state capacity have weakened over the past decade. Load shedding, crumbling freight rail, and municipal dysfunction have all raised the cost of doing business. At the same time, uncertainty in policy areas like land expropriation and mining regulation has deterred much-needed private investment.

The public sector, once a tool for delivering on transformation, is increasingly viewed as a site of inefficiency and patronage, unable to implement even well-intentioned development plans.

Fiscal Constraints and Limited Leverage

The country’s generous social grants system has been remarkably effective in reducing extreme poverty, but it has not been able to stem rising unemployment. With a shrinking tax base, rising debt, and large public sector wage commitments, South Africa has limited fiscal space to drive inclusive investments in infrastructure, skills development, and enterprise support.

A Rethink: Inclusion as a Driver of Growth

This bring us back to the heart of the national dialogue: should we focus on trying to grow the pie first, and then slice it more fairly, or can inclusive policies themselves become engines of growth? If the latter is the choice, then what does that mean?

• Raising the quality of basic education so that inclusion builds human capital.
• Improving public service delivery and restoring trust in state institutions.
• Shifting empowerment policies toward productive inclusion—supporting township and rural businesses, youth employment, and cooperative models.
• Unlocking private investment through policy certainty, infrastructure reform, and skills development partnerships.

Most of us probably believe that this would be sensible, so then the question becomes, HOW do we do this? More of the same that we have been trying, but with less corruption and more efficiency? Bigger role for the market, or bigger role for the state?