SA’s starving children expose our economic and moral failure - Business Day

John Endres

Two figures published this week should stop South Africans in their tracks. The first, from the Reserve Bank, shows that non-financial companies are holding a record R1.8-trillion in cash, the largest hoard in the country’s history. The second, reported in these pages, is that 21% of SA’s children under the age of five are stunted because of malnutrition.

Together, these figures reveal the scale of SA’s economic and moral failure.

That R1.8-trillion is not a sign of corporate greed but of corporate paralysis. Businesses are not investing because policy uncertainty, collapsing infrastructure, crime and a tangle of race-based regulations have made investment dangerous. Business confidence is low and returns are uncertain, so companies are opting to preserve liquidity. As the Bank writes: “They are responding to economic conditions and balancing risk with readiness to invest when confidence returns.”

The tragedy is that this same paralysis leaves millions of parents too poor to feed their children adequately.

Stunting is not merely a statistic. Behind every malnourished child there is a parent unable to feed them, causing permanent injury to the child’s potential. Malnourished children grow up shorter, weaker and cognitively impaired. A nation that allows one-fifth of its children to be stunted is a nation sabotaging its future workforce before it even begins.

SA’s malnutrition crisis is not caused by drought or famine but by decades of economic stagnation. The economy has grown by barely 1% a year on average for more than a decade. This is why there are parents who are unable to feed their children.

Fixed investment in SA languishes below 15% of GDP, compared with a global average of 26% and more than 30% in many emerging markets. That gap measures the distance between a dynamic economy and one in decline.

The blame lies squarely with government policy. The ANC’s obsession with central control, cadre deployment and race-based empowerment has strangled enterprise and driven capital into retreat. Property rights are insecure, regulations change without warning, and the state itself cannot deliver reliable electricity, transport or policing. The result is an environment where only the reckless invest. The cautious, rational and responsible preserve their capital instead.

It will be tempting for some to point to the R1.8-trillion and say that business is hoarding while children starve, that the government should compel companies to “invest” or seize idle funds to expand grants. That would be the worst possible conclusion.

Those funds belong to companies and their shareholders, not to the state. Forcing them into circulation through coercion or punitive taxation would only confirm investors’ worst fears and drive the next R1.8-trillion abroad.

Capital is skittish. It does not respond to moral scolding; it responds to confidence. And confidence depends on policy.

If SA wants that capital to move — to build factories, fund infrastructure, create jobs and feed families — it must change course. The “Blueprint for Growth” series of papers published by the Institute of Race Relations sets out the essentials: secure property rights, repeal expropriation without compensation, scrap race-based empowerment laws that inflate costs and deter investors, deregulate energy and transport, professionalise the civil service, and protect the rule of law.

These are not outlandish flights of fancy. They are the indispensable preconditions for recovery. Where investment flows, the economy grows and employment follows; where employment rises, malnutrition falls. Growth is the only lasting feeding scheme.

Between 2020 and this year, nearly 4,500 SA children under five died with malnutrition listed as a factor. Thousands more will live diminished lives. Every wasted opportunity to reform is measured not in GDP points but in lives blighted.

Business cannot be blamed for protecting its balance sheet when government policy undermines the business case. Yet SA cannot afford to wait for policy reform alone. In the interim, feeding programmes by business, NGOs and local communities must expand — not as substitutes for growth, but as lifelines while SA’s economy is rebuilt.

The government, for its part, should redirect its own spending from the many instruments of fake transformation that enrich the few while impoverishing the many.

Instead of wasting billions on inflated BEE procurement premiums for tenderpreneurs, endless bailouts for failing state-owned enterprises, subsidies for politically favoured industries and so-called black industrialist schemes that mainly serve connected elites, the state should redeploy those funds to eliminate child malnutrition and stunting.

No expenditure would yield a higher return for SA’s future growth than investing in the nutrition and development of its youngest citizens, for a child properly nourished today is tomorrow’s productive worker, entrepreneur and taxpayer.

SA’s economic failure is a moral one. A government that drives away investment drives its own people into hunger. The only path out is to rekindle confidence, restore growth and let capital do what it does best: turn savings into jobs and jobs into nourishment.

Until that happens, R1.8-trillion will remain frozen in bank accounts while the nation’s children go hungry. Nothing could be more unconscionable than that.

Endres is CEO of the SA Institute of Race Relations.

https://www.businesslive.co.za/bd/opinion/2025-10-16-sas-starving-children-expose-our-economic-and-moral-failure/