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flag South Africa South Africa: Economic and Political Outline

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline

 

Economic Indicators

South Africa is the economic giant of the African continent, contributing nearly 40% to the total African GDP. In the secondary sector, 75% of the biggest African companies are South African. The recovery after the severe international economic crisis was negatively affacted by the euro-zone crisis because the eurozone countries are the destination of a third of South-African exports. Growth was only 1.9% in 2013 and was driven by the car industry but hindered by structural problems (electricity supply, logistics), by industrial strikes which had a negative impact on production and by the fire in a steel factory. A recovery is expected in 2014 (2.9% of growth) following the recovery of the global economy.

The year 2013 was marked by the death of the South-African hero Nelson Mandela, whose fight against the apartheid has left behind a significant legacy in terms of democracy and social cohesion. Throughout the years, social conflicts and strikes continued, especially in the automobile sector, which affected the country's economic performance and business climate. In Johannesburg, demonstrators demanded better public services and a better wealth redistribution. The government is planning to launch a national plan to fight poverty and create 11 million new jobs by 2030. Refusing austerity measures, the government relies on the policy of large-scale state funded works which should stimulate employment: 50 billion euro will be needed to renovate water supply infrastructures and the company Alstom has won a contract worth 4.5 billion euro to renovate a fleet of suburban trains. The country wants to give priority to renewable energies and is trying to explore its shale gas potential.

Parliamentary election should take place in May while the current president Jacob Zuma has been the target of increasing criticism. The country has to deal with a number of obstacles: it loses 3 billion euro annually due to corruption; the cost of living has been rising (predicted to rise by 6% in 2014); the country's dependency on export commodities makes the economy very vulnerable to market fluctuations; the agricultural reform is still to be implemented.

Unemployment affects nearly a third of the country's active population and one in two young people. A five-year plan was announced in December 2011 to tackle the scourge of AIDS (affecting nearly 12% of the population), which represents another obstacle to the overall economic development of the country. One third of the population is still living below the poverty line. South Africa is the most unequal country in the world, the black majority being largely left behind.

 
Main Indicators 20112012201320142015 (e)
GDP (billions USD) 404.34382.34350.80341.22e352.53
GDP (Constant Prices, Annual % Change) 3.62.51.9e1.4e2.3
GDP per Capita (USD) 7,839e7,31466,3546,477
General Government Balance (in % of GDP) -3.8-4.2-4.3-4.6-4.8
General Government Gross Debt (in % of GDP) 38.842.145.2e47.9e50.8
Inflation Rate (%) 5.05.75.8e6.35.8
Unemployment Rate (% of the Labor Force) 24.824.924.725.225.0
Current Account (billions USD) -9.39-20.04-20.43-19.57e-19.88
Current Account (in % of GDP) -2.3-5.2e-5.8e-5.7e-5.6

Source: IMF - World Economic Outlook Database , Last Available Data

Note: (e) Estimated Data

Main Sectors of Industry

South Africa has a subsoil rich in mineral resources. It is the world's largest producer and exporter of gold, platinum and chrome and the 4th largest producer of diamonds. The country produces 80% of the world's platinum and also has 60% of the world's coal reserves.The country has diverse manufacturing industries and is a world leader in several specialized sectors, including railway rolling stock, synthetic fuels, mining equipment and machinery. The industrial sector employs a fourth of the workforce and represents over 30% of the GDP.

The services sector is flourishing. It employs almost 70% of the workforce and represents more than two thirds of the GDP. Tourism should continue to grow after the stimulus it has received from the World Football Cup. South Africa has a sophisticated financial structure with an active stock exchange that ranks among the world's top 20 in terms of market capitalization.

Agriculture only represents a small part of the GDP (2.4%) and employs only 5% of the country's workforce. South Africa is the 6th largest producer of wine in the world.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 4.6 24.3 62.7
Value Added (in % of GDP) 2.4 27.6 70.0
Value Added (Annual % Change) 2.3 1.4 2.0

Source: World Bank - Last Available Data.

 
 
 
Monetary Indicators 20092010201120122013
South African Rand (ZAR) - Average Annual Exchange Rate For 1 USD 8.477.327.268.219.66

Source: World Bank - Last Available Data.

 
 

Learn more about Market Analyses about South Africa on Globaltrade.net, the Directory for International Trade Service Providers.

Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
62.5/100
Position:
Moderately Free
World Rank:
75/178
Regional Rank:
6/46

Distribution of Economic freedom in the world
Source: 2014 Index of Economic freedom, Heritage Foundation

 

Business environment ranking

Definition:

The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

Score:
6.23
World Rank:
54/82

Source: The Economist - Business Environment Rankings 2014-2018

 

Country Risk

See the country risk analysis provided by Coface.

 

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Foreign Trade in Figures

South Africa is very open to international trade. The share of international trade in the country's GNP exceeds 60% (2010-12 average).The three top trade partners of South Africa are: the United States, Japan, and the European Union. The country exports essentially metals and precious minerals and imports machines and equipment, chemical and oil products and food products.

Since the beginning of the world economic crisis, the country's exports have remained weak, while imports has been steadily increasing, leaving the trade balance in growing deficit. In 2013, imports rose more quickly than exports, deepening the decific, which increased from nearly 35 billion R in 2012 to nearly 70 billion R in 2013.

 
Foreign Trade Indicators 20092010201120122013
Imports of Goods (million USD) 73,17294,226121,606127,159126,370
Exports of Goods (million USD) 61,67780,89298,04787,25696,076
Imports of Services (million USD) 14,39018,02319,22817,19516,325
Exports of Services (million USD) 11,65613,61714,42714,71113,636
Imports of Goods and Services (Annual % Change) -17.411.010.06.04.7
Exports of Goods and Services (Annual % Change) -19.59.06.80.44.2
Imports of Goods and Services (in % of GDP) 28.227.730.231.834.0
Exports of Goods and Services (in % of GDP) 27.328.430.629.931.1
Trade Balance (million USD) 5676,9716,658-4,756-7,670
Trade Balance (Including Service) (million USD) -2,2802,4791,779-7,314-9,942
Foreign Trade (in % of GDP) 55.556.160.861.865.1

Source: WTO - World Trade Organization ; World Bank , Last Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2013
China 12.7%
United States 7.2%
Japan 5.8%
Botswana 4.8%
Namibia 4.5%
See More Countries 65.0%
Main Suppliers
(% of Imports)
2013
China 15.5%
Germany 10.3%
Saudi Arabia 7.8%
United States 6.3%
India 5.2%
See More Countries 54.9%

Source: Comtrade, Last Available Data

 
 

Main Products

- bn USD of products exported in 2013
Iron ores and concentrates, incl. roasted iron...Iron ores and concentrates, incl. roasted iron pyrites 8.9%
Platinum, incl. palladium, rhodium, iridium,...Platinum, incl. palladium, rhodium, iridium, osmium and ruthenium, unwrought or in semi-manufactured forms, or in powder form 8.8%
Gold, incl. gold plated with platinum, unwrought...Gold, incl. gold plated with platinum, unwrought or not further worked than semi-manufactured or in powder form 6.9%
Coal; briquettes, ovoids and similar solid fuels...Coal; briquettes, ovoids and similar solid fuels manufactured from coal 6.2%
Ferro-alloysFerro-alloys 3.9%
See More Products 65.3%
- bn USD of products imported in 2013
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 14.2%
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 6.2%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 5.3%
Automatic data processing machines and units...Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, n.e.s. 2.3%
Transmission apparatus for radio-telephony,...Transmission apparatus for radio-telephony, radio-telegraphy, radio-broadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras; still image video cameras and other video camera recorders; digital cameras 2.3%
See More Products 69.6%

Source: Comtrade, Last Available Data

 
See More Products
More imports (Intracen Data)
More exports (Intracen Data)
 
 
 

Main Services

Source: Comtrade, Last Available Data

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Sources of General Economic Information

Ministries
Department of Agriculture
Department of Trade and Industry
Department of Minerals and Energy
Department of Public Enterprises
Statistical Office
Statistics South Africa
Central Bank
South African Reserve Bank
Stock Exchange
JSE Securities Exchange
South African Futures Exchange
Johannesburg Stock Exchange
Search Engines
Aardvark South Africa
WoYaa (website under construction)
Southafrica
Ananzi
Easy Info
M-web
Economic Portals
Economy watch

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Political Outline

Executive Power
President is both the chief of state and head of government. President is elected by the parliament (lower house), who usually happens to be the leader of the largest party, to serve a five-year term. President is the commander-in-chief of the armed forces, declares war or peace and appoints the Cabinet.
Legislative Power
South Africa has a bicameral legislature. The parliament's members are elected by popular vote under a system of proportional representation to serve five-year terms and National Council of Provinces (the upper house) having 90 seats, with 10 members elected by each of the 9 provincial legislatures for five-year terms.

The executive branch of government is directly or indirectly dependent on the support of the parliament, often expressed through a vote of confidence. President can dissolve Parliament if a majority of the members of the National Assembly seek its dissolution and at least three years have lapsed since the last election.

Main Political Parties
- The African National Congress (ANC): ruling party founded by Nelson Mandela; in power since the end of apartheid in 1994; consistently wins at least 60% of the vote, although its popularity declined by several percentage points between 2004 and 2014; center-left to left-wing, but allied with the far left groups, the Congress of South African Trade Unions (COSATU) and the South African Communist Party (SACP)
- Democratic Alliance (DA): official opposition, supports liberal democracy and free market principles, progressively gaining in popularity
- Economic Freedom Fighters (EFF): far left, Marxist
- Inkatha Freedom Party (IFP): dominated by rural, Zulu-speakers based in the KwaZulu-Natal region; emphasizes social justice and the role of traditional communities
Current Political Leaders
President: Jacob ZUMA (since May 2009) – ANC
Executive Deputy President: Matamela Cyril RAMAPHOSA (since May 2014) - ANC
Next Election Dates
Presidential: 2019
National Assembly: 2019
National Council of Provinces: 2019
 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
42/180
Evolution:
10 places up compared to 2013

Source: Worldwide Press Freedom Index 2014, Reporters Without Borders

 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Free
Political Freedom:
2/7

Map of freedom 2014
Source: Freedom House

 

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Last Updates: February 2015