Today’s post with Jurgens Fourie compares Codera’s total factor productivity estimates for the government and private services sectors in South Africa. Although productivity measurement in the government sector is fraught with measurement challenges, our estimates suggest, at least, at face value, that government is producing less value over time, after accounting for inputs. The private services sector (one of the main driving sectors of employment growth), like other sectors, has experienced a productivity collapse since 2010. Over the long term, productivity is a key determinant of a country’s per capita income. South Africa’s poor productivity performance since 2010 is therefore very concerning.
