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South Africa

South Africa

Political and Economic Situation

South Africa has made considerable economic and social progress since its first democratic election in 1994, but the benefits of this improvement have not reached its entire population. Income inequalities and unemployment (~26%), especially among young people (53%), remain high. The current vision to address domestic socio-economic challenges by focusing on creating jobs and improving education and skills is outlined in the 2030 National Development Plan.

The South African economy is diversified with key economic sectors contributing to GDP: financial and business services (22%), other services (5.9%), governmental services (17%), trade (15.1%), manufacturing (13.7%), transport (9.3%), mining (8.5%), personal services, real estate, tourism (6%), construction (3.8%), electricity (2.4%) and agriculture (2.4%).

As a BRICS member state, South Africa is well integrated into the global economy as well as in the regional South African Development Community (SADC). GDP growth declined from 1.5% in 2014 to 1.3% in 2015, and was expected to weaken further to 0.7% in 2016 as a result of slowdown in China’s economy – South Africa’s biggest export partner – in addition to a fall in commodity prices, low investment, and erratic capital flows. The economy was furthermore negatively impacted by drought that continues to weigh heavily on agricultural production, whose real proportion of GDP was reduced by 16.2%. Various infrastructure gaps, notably inadequate energy supply and power outages, weak domestic demand, and anemic investment rates are among other internal constraints hindering growth.

As a result of the above environment, the Rand (ZAR) depreciated by more than 40% between December 2014 and December 2016 and inflation rates have increased from 4% in 2015 to 6.8% in 2016.

Due to continued increase in government debt, the government is facing the risk of a rating downgrade that would increase the cost of borrowing and further threaten the rand.

GDP growth (%) is however projected to recover in 2017 and to further increase in 2018, driven by upward household consumption and investment as well as consolidation in public spending, with a 5-year growth forecast of 2.3%. Improvements in electricity production should furthermore boost investor confidence.

 

South Africa - Key figures

Available statistics:
Capital
Pretoria
Official language
11 official languages, however English commonly used Government language
Population (2015)
54.957 million
Population growth (2015), %
1.6
Median age of population (2015), years
26.5
Urbanization rate (2015), % p.a.
2.4
Urban population (2015), % of total
64
Rural population (2015), % of total
36
Population density (capita.km2)
45.3
HDI (2015)
0.666
National Currency
South African Rand
Exchange rate (01/2017), USD
13.7531
GDP (2015), USD billion current
314.57
GDP growth (2015), %
1.3
Mean GDP growth (2010-2015), %
2.28
GDP growth forecast (2016-2020), %
1.36
GNI per capita, PPP (2015), USD (current international $)
12,880
Inflation (2015), %
4%
Foreign Investment (2014), USD billion
1.575
ODA (2014), USD billion
1.070
Budget deficit (2016), %
- 3.3
TI Corruption Index (2015), rank out of 167
4.4, rank 61
Rural Population below poverty line (2010), %
77
Urban population below poverty line (2010), %
39.2
Commercial lending rate (2015), %
9.4
Installed Generation Capacity (MW, 2016), Eskom:
45,075
Installed Generation Capacity (MW, 2016), IPPs:
3,392
Installed Generation Capacity (MW, 2016), Municipal:
1,850
Installed Generation Capacity (MW, 2016), Total
50,317
Effective Fossil Fuel Capacity (MW, 2016)
40,556
Effective Hydro Capacity (MW, 2016)
2,184 inclusive of pumped storage
Other RE Capacity (MW, 2016)
2,235
Renewable electricity output as % of total electricity output excl. hydro (2016)
~3
Avg. distribution and transmission losses as % of output (2016)
8.6
Net electricity imports (GWh, 2016)
- 3,762
Electrification rate, total (%, 2013)
85
Electrification rate, urban (%, 2013)
95
Electrification rate, rural (%, 2013)
77
Peak demand (MW, 2016)
34,481
Per capita electricity consumption (kWh, 2013)
4,326
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