South Africa’s Government of National Unity (GNU) is like a washed-up old bodybuilder. It’s big – very big – and likes to flex and show off its large muscles. But despite its considerable size, it is weak and insecure. Consequently, the state suffers from body dysmorphia: always thinking it isn’t big enough and wanting to bulk-up even further. To make matters worse, the government regularly skips leg day, making it clumsy and top-heavy.

This week, the Free Market Foundation (FMF) published a report which showed just how big South Africa’s government really is – and why it needs to be cut down to size. The paper, Lean But Efficient: The Fiscal and Moral Imperative of Cutting South Africa’s Cabinet forms part of the FMF’s ongoing Liberty First policy agenda and outlines how a smaller, more efficient state would be both less expensive and more effective.

Authored by FMF Senior Associate, Dr Morné Malan, the paper outlines the staggering cost of South Africa’s bloated government, which makes up approximately 32% of South Africa’s GDP. While this is below the average for Organisation for Economic Co-operation and Development member states (42% in 2023), public spending in the developed world is usually targeted at social protection, health, and education.

South Africa, by contrast, devotes the bulk of its state expenditure to: “general public services”, diverting funds away from more productive investments. This is hardly Keynesian fiscal stimulus. Most of the national budget is spent on government consumption like salaries for civil servants or regulatory agencies, not on infrastructure or other fixed investments.

This has resulted in the creation of a vast bureaucratic class that feeds off an increasingly strained tax base. Public employment now comprises 17.7% of South Africa’s workforce in the context of an inflexible labour market struggling with 33.2% unemployment. About 29 million people depend on welfare, compounding government dependency.

While the state might be growing, the economy is not: growth now sits at an anaemic 0.6%. Meanwhile, public borrowing continues its steady rise, with debt as a proportion of GDP projected to reach 82% by 2026.

A Crowded Cabinet

While big government is not a new problem in South Africa, the formation of the GNU in June 2024 saw the start of a new bulking phase for the state. Smarting from its worst-ever electoral outcome, the African National Congress (ANC) chose to invite all and sundry to join the government, with the erstwhile official opposition and other small parties eagerly jumping on board the sinking ship.

Today, the national executive is made up of no fewer than 32 ministers and 37 deputy ministers. That’s 69 in total (not nice!). Almost a fifth of the 400 Members of Parliament are now members of the national executive.

This crowded Cabinet is difficult to justify in a country of only 62 million people and a GDP of US$400 billion. Compare this to other more dynamic economies like Germany – which has only 16 federal ministries for its 84 million people and a GDP of US$4.5 trillion – or Singapore, which sets the benchmark with its 15 ministries. Bigger does not necessarily mean better.

Cut, cut, cut

The paper repeats an earlier FMF policy proposal to dramatically cut the size of South Africa’s Cabinet down to ten essential portfolios by merging overlapping functions and abolishing redundant ministries.

The portfolios on our proposed chopping block include the Department of Small Business Development. Small firms thrive under conditions of market competition and deregulation, the paper argues, eliminating the need for a dedicated portfolio. Any functions deemed strictly necessary can be folded into the Department of Trade and Industry.

South Africa’s highly competitive sports teams succeed on the global stage despite the best efforts of the Department Sports, Arts, and Culture. Population group ministries like Women, Youth, and Disabilities are virtue-signalling bodies with little impact and can easily be merged with the Department of Social Development.

The paper estimates that reducing South Africa’s Cabinet could save between R5 to R10 billion annually, potentially saving up to 1% of annual GDP (factoring in indirect costs and regulatory burdens).

Historical precedent suggests that this approach would work, and the paper cites Chile in the 1970s and 1980s, as well as New Zealand in the 1980s, where government departments and regulatory agencies were closed or consolidated. In both cases, this resulted in governments that cost less as a proportion of GDP, and which delivered services more efficiently.

Merely symbolic?

Critics who might dismiss our proposal to shrink the size of the state as “merely symbolic” miss the point.

Symbolism counts for a lot, as Malan argues: “A smaller Cabinet signals seriousness about efficiency and reform. More importantly, however, each ministry generates not only expenditure but regulation. Every minister presides over Acts, regulations, licences, reporting obligations, advisory councils, and compliance requirements. Reducing the number of ministries, therefore, yields a double dividend: fiscal savings and regulatory relief.”

To reduce the scope of state power, the paper proposes privatising state-owned enterprises, capping state expenditure at 25% of GDP, and imposing a “one-in, two-out” rule for new regulations to stop bureaucratic creep.

Living on borrowed time

Juiced up on taxpayer money and addicted to debt, the South African state is prone to regular outbursts of roid-rage.

It’s time for the GNU to quit bulking and start cutting. If it doesn’t do so soon, the government will likely collapse under its own considerable weight – and ordinary South Africans will bear the consequences.

Ansara is CEO of the Free Market Foundation.