I have just returned from a fascinating working visit to Singapore and Malaysia, two nations that in the 1960s were poorer than South Africa. I went there to speak about positioning Africa as part of the global economy. But, in truth, I came back with a renewed urgency and appreciation that South Africa is being left behind by aspects that we have the power to change.
While the South Africa of today is limited by a leadership embroiled in apathy and indecision, our competitors and allies in the developing world are engineering growth and prosperity the way Singapore did just three generations ago.
Like neighbouring Malaysia, Singapore had every reason to fail following its independence in 1965. Both nations had no gold, no platinum, no diamonds. They had few natural resources and were steeped in poverty and underdevelopment. Yet they chose discipline, execution and long-term nation-building over short-term politics.
I am not the first person to come back from a working visit to Singapore with a viewpoint or two. However, I do not aim to offer idle commentary, but to share concrete lessons Singapore offers on building a resilient and prosperous nation.
Public service
First, and foundationally, strong leadership builds strong institutions. Singapore’s president, Lee Kuan Yew, did not wait for perfect systems — he built them based on excellence and merit. What followed were capable, stress-tested institutions that outlast individuals and administrations.
The government hired the best, paid them well, demanded performance and insulated them from politics. Today, Singapore boasts a public service that competes with the private sector in efficiency.
South Africa, on the other hand, has done the opposite. We have more than 177,000 employees in government agencies, many of whom produce little of measurable value. Public sector employment has ballooned from 1.9 million in 2002 to 2.8 million in 2017, now accounting for 18% of total national employment.
It goes without saying that frontline workers are not the problem. Teachers, nurses and police officers are the backbone of the state. The crisis lies in the middle, where there is a thick layer of administrators who absorb budgets without delivering outcomes. South Africa is desperate for a meritocratic public service and to eradicate the culture of entitlement.
Corporate tax
The second lesson is that no country is an island. Either you compete or you are left behind. Singapore understood early that capital has no sentimentality or loyalty. It is rational and follows confidence. South Africa must make the same realisation.
Take our corporate tax rate, which is 27%. Other developing countries offer lower rates to encourage businesses to invest and to spur growth. In Turkey, Thailand and Vietnam, it’s 20%; in Indonesia, 22%; in Singapore, 17%; and in the UAE, 9%. Ideology does not matter more than competitiveness, and investors don’t make decisions based on manifestos.
Lower corporate tax does not favour big business, as the tired argument goes. It favours employment and growth. If South Africa wants to attract high-growth industries, we must cut our corporate tax rate to 15%, simplify regulation and provide legal certainty around contracts and ownership.
Human capital
The third lesson is that without future-focused investment in people — in human capital — there is no base for growth. Take mathematics as a yardstick. In the 2022 OECD Programme for International Student Assessment, Singaporean 15-year-olds scored 575 in mathematics, well above the OECD average of 500. This places them among the highest-performing students globally. In South Africa, more than 500 schools don’t even offer mathematics as a subject, and just 21% of pupils who wrote mathematics in the matric exams over a recent five-year period achieved 50% or more.
South Africa’s Human Capital Index is 0.43, meaning a child born here today will only reach 43% of their productive potential. That statistic alone should keep our entire Cabinet awake at night.
SMMEs
The next lesson is to obsess over small businesses and entrepreneurs. South Africa’s SMMEs account for 91% of its businesses, 60% of its jobs and 34% of its GDP. Yet, just 14% survive to grow beyond subsistence level.
Every economy that has lifted people into prosperity has done so through scalable firms employing 50–250 people. Not tenderpreneurs and government contractors, but real businesses creating real jobs. If we fail to industrialise entrepreneurship, inequality will remain structurally permanent.
Corruption and crime
Next, digital transparency is our greatest weapon against corruption. Singapore eliminated opportunities for corruption through automation. South Africa ranks 40th in UN e-government readiness (up from 65th), but we’re still too slow. Why can we track a courier parcel across continents in real time, but not a government tender from start to completion?
Crime is a tax on investment, as it deters from the get-go. Singapore is ranked 7th on the Global Peace Index. South Africa is 123rd. Investors factor that into every transaction, as do families deciding whether to emigrate and take their skills and capital elsewhere.
Urgency
Finally, South Africa requires urgency in execution, which Singapore appreciated from the outset.
The path forward requires strong leadership and a lean, capable state, underpinned by competitive tax and regulatory frameworks. Education must serve as a cornerstone of economic policy, while small and medium enterprises should be scaled for growth. Transparency through digital tools and an uncompromising commitment to safety are essential to creating an environment where prosperity can flourish.
We’ve spent enough time admiring models and modalities of other countries. It’s time to build our own. DM