South Africa Economy Facts

by ebizdir · Published January 30, 2023 · Updated February 22, 2023

Economical overview

Comprehensive mineral resources form the basis of South Africa’s economy. Platinum, gold, coal and diamonds have long supported exports. The income from the mining industry has enabled a large and growing industrial sector, which in turn has given rise to an extensive service industry.

Since the first free elections in 1994, GDP per person has more than doubled. The share of the population living below the poverty line has decreased, but the distribution of wealth is still the biggest problem in South Africa’s economy (see Social conditions).

Countryaah.com: Major imports by South Africa, covering a full list of top products imported by the country and trade value for each product category.

During the apartheid era, South Africa was exposed to an international trade boycott, which hampered economic development. When the racial segregation laws were repealed in the early 1990s, the boycott ceased and growth accelerated. However, it slowed down in 1997, and the following year the economy stagnated. The low gold price led to stock market price and currency depreciation, rand. The mining industry laid off a large number of workers. From 1999 the economy grew again, but the figures were lower than expected by the government to finance the ambitious social and economic goals. Growth policy initially led to falling inflation and financial stability, but could not create the amount of new jobs promised.

The attempts to privatize telecommunications, electricity and water supply, railways, aviation and other governmental activities were problematic and met with protests. The government was forced to proceed cautiously and carry out sales gradually. The trade union organization Cosatu led protest strikes against privatization and cuts in the public sector.

The high unemployment forced many into the informal sector, which grew sharply following the economic liberalization. The government had to strike a difficult balance between the demands of the trade union and the business community.

Abbreviationfinder.org: Check this abbreviation website to find three letter ISO codes for all countries in the world, including ZA which represents the country of South Africa. Check findjobdescriptions to learn more about South Africa.

The economic downturn in the world economy caused South Africa to recession at the end of 2008. The downturn lasted until the third quarter of 2009, when the economy turned up again.
During the 2010s, the economy was characterized by the country’s structural problems. Corruption is widening at the same time as industrial productivity remains low. Uncertainties surrounding the political development in the country, where political voices were raised for nationalization of the mining industry, have delayed necessary investments.

2012 saw extensive strikes in the mining industry and they spread to other parts of society. Several credit rating agencies lowered the country’s credit rating, citing politicians’ inability to address the social problems in society. The rand fell in value against other currencies and foreign direct investment declined.

Inflation soared in 2014 to over six percent, but was subdued in 2015 to 4.5 percent. The economic growth rate has fallen sharply and was down 1.5 percent in 2014.
While agriculture, mines and industry have stagnated, tourism is showing increasing numbers. Ten percent of all jobs are now in tourism, which accounts for about 9 percent of GDP.

The great challenge of the ANC government is to fight mass poverty and unemployment while at the same time making business more efficient in order to attract new investors. A new trend, however, is that foreign companies are increasingly choosing South Africa as a springboard to the rest of Africa. Instead, it is becoming more common for them to establish themselves directly in other African countries where growth is higher. Factors that speak to South Africa’s disadvantage are political instability, anti-alien riots and aggravated bureaucracy in connection with racial quotas and legislated positive special treatment of blacks (see Labor Market).