Economy of South Africa

economy

KEY FACTS 2015

GNI:  US$334.2 billion

GNI p.c.: US$6,080

GDP growth:  1.3% p.a. 2011–15

Inflation:   4.6% p.a. 2011–15

Apartheid left South Africa with unequal distributions of income, distorted patterns of population settlement, imbalances in skills, low productivity and a large and inefficient bureaucracy. Furthermore, in the last decade of the old regime, prolonged recession (from low gold and other commodity prices, high expenditure on security forces, economic sanctions and disinvestment) led to weakening of the economic fabric. GDP grew by one per cent p.a. 1980–90.

In August 2000, the government announced a programme of privatisation in telecoms, energy and transport, accounting for a substantial part of the state industrial sector. The large state companies would first be restructured and then privatised. But since many government supporters opposed this programme, progress was slow.

From the mid-1990s the economy picked up, led by manufacturing, tourism and financial services. It slowed in 1998 and then continued to grow steadily from 1999, recording growth of 2.1 per cent p.a. during 1990–2000. The government has promoted a programme of black economic empowerment, notably through the Broad Based Black Economic Empowerment Act 2003, which gives previously marginalised groups opportunities that were unavailable to them in the apartheid era.

Strong domestic demand, as a result of rising disposable income and wealth, has driven the good steady growth during the 2000s, averaging 4.7 per cent p.a. during 2004–08, with relatively low inflation. This long period of good growth was interrupted in the world economic downturn of 2008–09. The economy expanded by 3.6 per cent in 2008 and contracted by 1.5 per cent in 2009. It soon recovered, sustaining a growth rate of about 2.5 per cent p.a. 2010–15.

 

Mining, oil and gas

The country has the world’s largest reserves of gold, manganese, platinum, chromium, andalusite, vanadium and alumino-silicates. It has substantial amounts of antimony, asbestos, coal, copper, diamonds, iron ore, lead, oil and gas, titanium, uranium, vermiculite, zinc and zirconium. Mining and minerals processing accounts for more than half of export revenue.

Offshore oil production from fields south-west of the Cape started in 1997 and substantial reserves of natural gas were discovered off the west coast in 2001. In October 2014 the government announced plans to intensify offshore oil and gas exploration.