ECS3707
Assignment 5 PORTFOLIO Semester 2 2025
2 2025
Unique Number:
Due date: 7 October 2025
1.1 Introduction: Contextualising South Africa’s Dual Development Crisis
South Africa faces a serious development challenge that combines weak human capital
outcomes with slow and uneven economic growth. Human capital refers to the skills,
knowledge, and health that enable people to be productive and contribute to the economy
(Todaro & Smith, 2020). When people are well educated, healthy, and have access to
decent work, they are more likely to improve their own living standards and support national
development. However, South Africa continues to struggle with both poor outcomes in
education and healthcare and a stagnating economy that fails to create enough jobs or raise
incomes.
The crisis is rooted in long-standing structural inequalities that date back to apartheid and
are reinforced by modern inefficiencies in service delivery. The country has one of the
highest inequality levels in the world, which is reflected in unequal access to healthcare and
education (World Bank, 2023). The health system is divided between a small, well-resourced
private sector and a large, underfunded public sector that serves most of the population
(Senkubuge, Modisenyane & Bishaw, 2021). At the same time, the education system
DISCLAIMER & TERMS OF USE
Educational Aid: These study notes are intended to be used as educational resources and should not be seen as a
replacement for individual research, critical analysis, or professional consultation. Students are encouraged to perform
their own research and seek advice from their instructors or academic advisors for specific assignment guidelines.
Personal Responsibility: While every effort has been made to ensure the accuracy and reliability of the information in
these study notes, the seller does not guarantee the completeness or correctness of all content. The buyer is
responsible for verifying the accuracy of the information and exercising their own judgment when applying it to their
assignments.
Academic Integrity: It is essential for students to maintain academic integrity and follow their institution's policies
regarding plagiarism, citation, and referencing. These study notes should be used as learning tools and sources of
inspiration. Any direct reproduction of the content without proper citation and acknowledgment may be considered
academic misconduct.
Limited Liability: The seller shall not be liable for any direct or indirect damages, losses, or consequences arising from
the use of these notes. This includes, but is not limited to, poor academic performance, penalties, or any other negative
consequences resulting from the application or misuse of the information provided.
, For additional support +27 81 278 3372
1.1 Introduction: Contextualising South Africa’s Dual Development Crisis
South Africa faces a serious development challenge that combines weak human
capital outcomes with slow and uneven economic growth. Human capital refers to
the skills, knowledge, and health that enable people to be productive and contribute
to the economy (Todaro & Smith, 2020). When people are well educated, healthy,
and have access to decent work, they are more likely to improve their own living
standards and support national development. However, South Africa continues to
struggle with both poor outcomes in education and healthcare and a stagnating
economy that fails to create enough jobs or raise incomes.
The crisis is rooted in long-standing structural inequalities that date back to apartheid
and are reinforced by modern inefficiencies in service delivery. The country has one
of the highest inequality levels in the world, which is reflected in unequal access to
healthcare and education (World Bank, 2023). The health system is divided between
a small, well-resourced private sector and a large, underfunded public sector that
serves most of the population (Senkubuge, Modisenyane & Bishaw, 2021). At the
same time, the education system produces mixed results: although South Africa
spends about 6% of its GDP on education, learning outcomes remain poor
compared to countries that spend less (Dulvy et al., 2024). Many learners leave
school without basic literacy or numeracy skills, which limits their ability to participate
in higher education or formal employment.
The poor health and education outcomes feed directly into low productivity and slow
economic growth. A country’s economy grows when its people can work efficiently,
innovate, and use their skills productively. In South Africa, however, the loss of
productive capacity due to disease, malnutrition, and skill shortages reduces the
overall performance of the economy. The Disability-Adjusted Life Year (DALY) loss,
equivalent to about 41% of GDP, shows how much potential output is lost due to
illness and premature death (Senkubuge et al., 2021). Non-communicable diseases
such as diabetes, hypertension, and cardiovascular conditions now account for over
30% of the total disease burden (Koch, 2024). These conditions reduce the ability of
, For additional support +27 81 278 3372
working-age adults to contribute consistently to the economy and increase the cost
of healthcare for both the government and households.
In addition, South Africa’s population is growing faster than the economy. The
population has been increasing by about 1.5–2% per year, while GDP grew by only
0.6% in 2024 compared with 2023 (Stats SA, 2025). This gap means that per capita
income is declining, and the economy is not generating enough jobs or opportunities
for young people entering the labour market. High unemployment, especially among
the youth, limits household income and deepens poverty and inequality. The
economy’s limited capacity to absorb new entrants also weakens the motivation for
education, as many graduates cannot find suitable employment, creating a cycle of
disillusionment and dependency.
Health and education inequalities are therefore tightly connected to South Africa’s
broader economic performance. Poor health reduces productivity and increases
absenteeism, while weak education limits innovation and the ability to use
technology effectively. Both problems undermine the competitiveness of South
African industries and restrict the country’s potential for inclusive growth. At the
same time, slow growth restricts the resources available for investment in health and
education, creating a vicious cycle of underperformance. Public spending remains
high but inefficient, with limited measurable improvement in learning outcomes,
disease prevention, or job creation (World Bank, 2023).
South Africa’s dual crisis is not only about poverty or inequality in isolation but about
how weak human capital and slow growth reinforce each other. A weak education
and health system reduces the quality of the labour force, which then limits economic
expansion. In turn, low economic growth constrains government revenue, making it
difficult to improve service delivery or infrastructure. Breaking this cycle requires a
coordinated approach that recognises the central role of human capital in long-term
development and economic stability.
1.2 Theoretical Framework: Linking Human Capital to Long-Term Economic
Growth
Assignment 5 PORTFOLIO Semester 2 2025
2 2025
Unique Number:
Due date: 7 October 2025
1.1 Introduction: Contextualising South Africa’s Dual Development Crisis
South Africa faces a serious development challenge that combines weak human capital
outcomes with slow and uneven economic growth. Human capital refers to the skills,
knowledge, and health that enable people to be productive and contribute to the economy
(Todaro & Smith, 2020). When people are well educated, healthy, and have access to
decent work, they are more likely to improve their own living standards and support national
development. However, South Africa continues to struggle with both poor outcomes in
education and healthcare and a stagnating economy that fails to create enough jobs or raise
incomes.
The crisis is rooted in long-standing structural inequalities that date back to apartheid and
are reinforced by modern inefficiencies in service delivery. The country has one of the
highest inequality levels in the world, which is reflected in unequal access to healthcare and
education (World Bank, 2023). The health system is divided between a small, well-resourced
private sector and a large, underfunded public sector that serves most of the population
(Senkubuge, Modisenyane & Bishaw, 2021). At the same time, the education system
DISCLAIMER & TERMS OF USE
Educational Aid: These study notes are intended to be used as educational resources and should not be seen as a
replacement for individual research, critical analysis, or professional consultation. Students are encouraged to perform
their own research and seek advice from their instructors or academic advisors for specific assignment guidelines.
Personal Responsibility: While every effort has been made to ensure the accuracy and reliability of the information in
these study notes, the seller does not guarantee the completeness or correctness of all content. The buyer is
responsible for verifying the accuracy of the information and exercising their own judgment when applying it to their
assignments.
Academic Integrity: It is essential for students to maintain academic integrity and follow their institution's policies
regarding plagiarism, citation, and referencing. These study notes should be used as learning tools and sources of
inspiration. Any direct reproduction of the content without proper citation and acknowledgment may be considered
academic misconduct.
Limited Liability: The seller shall not be liable for any direct or indirect damages, losses, or consequences arising from
the use of these notes. This includes, but is not limited to, poor academic performance, penalties, or any other negative
consequences resulting from the application or misuse of the information provided.
, For additional support +27 81 278 3372
1.1 Introduction: Contextualising South Africa’s Dual Development Crisis
South Africa faces a serious development challenge that combines weak human
capital outcomes with slow and uneven economic growth. Human capital refers to
the skills, knowledge, and health that enable people to be productive and contribute
to the economy (Todaro & Smith, 2020). When people are well educated, healthy,
and have access to decent work, they are more likely to improve their own living
standards and support national development. However, South Africa continues to
struggle with both poor outcomes in education and healthcare and a stagnating
economy that fails to create enough jobs or raise incomes.
The crisis is rooted in long-standing structural inequalities that date back to apartheid
and are reinforced by modern inefficiencies in service delivery. The country has one
of the highest inequality levels in the world, which is reflected in unequal access to
healthcare and education (World Bank, 2023). The health system is divided between
a small, well-resourced private sector and a large, underfunded public sector that
serves most of the population (Senkubuge, Modisenyane & Bishaw, 2021). At the
same time, the education system produces mixed results: although South Africa
spends about 6% of its GDP on education, learning outcomes remain poor
compared to countries that spend less (Dulvy et al., 2024). Many learners leave
school without basic literacy or numeracy skills, which limits their ability to participate
in higher education or formal employment.
The poor health and education outcomes feed directly into low productivity and slow
economic growth. A country’s economy grows when its people can work efficiently,
innovate, and use their skills productively. In South Africa, however, the loss of
productive capacity due to disease, malnutrition, and skill shortages reduces the
overall performance of the economy. The Disability-Adjusted Life Year (DALY) loss,
equivalent to about 41% of GDP, shows how much potential output is lost due to
illness and premature death (Senkubuge et al., 2021). Non-communicable diseases
such as diabetes, hypertension, and cardiovascular conditions now account for over
30% of the total disease burden (Koch, 2024). These conditions reduce the ability of
, For additional support +27 81 278 3372
working-age adults to contribute consistently to the economy and increase the cost
of healthcare for both the government and households.
In addition, South Africa’s population is growing faster than the economy. The
population has been increasing by about 1.5–2% per year, while GDP grew by only
0.6% in 2024 compared with 2023 (Stats SA, 2025). This gap means that per capita
income is declining, and the economy is not generating enough jobs or opportunities
for young people entering the labour market. High unemployment, especially among
the youth, limits household income and deepens poverty and inequality. The
economy’s limited capacity to absorb new entrants also weakens the motivation for
education, as many graduates cannot find suitable employment, creating a cycle of
disillusionment and dependency.
Health and education inequalities are therefore tightly connected to South Africa’s
broader economic performance. Poor health reduces productivity and increases
absenteeism, while weak education limits innovation and the ability to use
technology effectively. Both problems undermine the competitiveness of South
African industries and restrict the country’s potential for inclusive growth. At the
same time, slow growth restricts the resources available for investment in health and
education, creating a vicious cycle of underperformance. Public spending remains
high but inefficient, with limited measurable improvement in learning outcomes,
disease prevention, or job creation (World Bank, 2023).
South Africa’s dual crisis is not only about poverty or inequality in isolation but about
how weak human capital and slow growth reinforce each other. A weak education
and health system reduces the quality of the labour force, which then limits economic
expansion. In turn, low economic growth constrains government revenue, making it
difficult to improve service delivery or infrastructure. Breaking this cycle requires a
coordinated approach that recognises the central role of human capital in long-term
development and economic stability.
1.2 Theoretical Framework: Linking Human Capital to Long-Term Economic
Growth
