South Africa

South Africa is based at the southern tip of Africa with a land mass of 1.22 million km² and a coastline of just under 3,000km, which is Africa’s third largest coastline after Madagascar and Somalia.
It had a GDP of US$418bn in 2023 and a GDP per capita was US$6,006 with a population of 60.1 million. After the fall of apartheid in the early 1990s, South Africa had its first democratic election in 1994, and it has an independent judiciary, independent media and a vibrant civil society.

The economy grew by 1.3% in 2024 and is forecast to grow by 1.5% in 2025 which is substantially below the continental average of 3.4%. Inflation was down to 2.9% in December 2024 compared with 4.8% in the same period in 2023. Key industries are mining, agriculture, finance, transport and manufacturing which are the main drivers of growth on the supply side of the economy.

South Africa is the largest African economy followed by Nigeria and Egypt. Although mainly mining based, with vast mineral resources and commodities such as platinum, gold, iron ore and coal topping its export basket, the country has world-class manufacturing capabilities in certain industries such as vehicle and machinery, paper and pulp and chemicals. At 62%, the main contributor to GDP remains the country’s services sector.
South Africa was placed on the Financial Action Task Force (FATF) grey list in February 2023 due to its weaknesses in anti-money laundering (AML) and counter-terrorist financing (CTF) measures which are being addressed, and the country hopes to be removed from the list in 2025.

In the national elections held in May 2024, support for the ruling ANC dropped below 50% for the first time (to 40%), leading to a coalition or Government of National Unity with the largest opposition party the Democratic Alliance and several other parties.

Poor economic growth is attributable to state run entities in electricity generation, rail and ports being poorly managed and hampered by systemic corruption which is being addressed by an initiative called Operation Vulindlela, a co-operation between the Presidency, Treasury and the private sector with positive results shown to date. Substantial investment to upgrade infrastructure, particularly in logistics, is in the pipeline and includes private sector ownership.
Economic growth has been affected by blackouts due to poorly-maintained plant and equipment, although it should be noted that South Africa has 42GW of installed capacity, which is four times that of Nigeria which has a population almost four times bigger than South Africa. The appointment of a Minister of Electricity in 2023 has resulted in no blackouts in 2024. Renewable energy generation in wind, solar, gas and battery by the state and private sector amounted to 11.4% of electricity generation in 2023, and installations to generate a further 28GW are planned for completion by 2030.
China is South Africa’s largest export partner at US$12199m 2023 followed by the United States (US$8264m), Germany (US$7559m) Mozambique (US$6116m) and Japan (US$5646m).
The three agriculture subsectors – crops, horticulture and livestock – contribute significantly to agricultural trade, and South Africa is one of the major players in the trade of fruits globally. The local fruit industry is export oriented, with fruit exports accounting for about 35%, valued at about R63bn, of overall agricultural exports. South Africa’s cereals and related crops industry has enjoyed three strong production years, underpinned by favourable weather conditions (especially for summer crops) and high international producer prices.

The mining sector includes primary mineral products such as ores (iron, copper, manganese, lead, chromium, titanium, vanadium, zinc) and coal, as well as precious metals, including platinum group metals (PGMs) such as platinum, palladium and rhodium, gold, and diamonds. In an environment where government provides policy certainty, administered prices are tolerable, and logistics problems relating to the inefficiencies in the rail and port system are solved, the mining industry can retain its historical importance in the economy.

South Africa has a dual economy with a well-developed banking and financial system, advanced infrastructure, superior IT networks and one of the top exchanges in the world. Its macroeconomic stability and budget transparency are rated highly. As a regional powerhouse, it accounts for about 51% of SADC’s output and has a significant footprint in the region in terms of FDI, utilities, telecommunications and retail services. The government committed itself to stabilise the debt-to-GDP ratio at 87% by 2023-2024, whereafter it is expected to decline.

Port operations in South Africa are controlled by two of state-owned Transnet’s divisions, with Transnet National Ports Authority acting as landlord for eight commercial ports, and Transnet Port Terminals responsible for day-to-day operations at the 16 terminals located at seven ports in Cape Town, Durban, East London, Ngqura, Gqeberha, Richards Bay and Saldanha Bay.

The Airports Company of South Africa (ACSA), majority-owned by the government, is legally and financially autonomous and operates under commercial law. ACSA manages South Africa’s nine principal airports: Cape Town International, King Shaka (Durban), OR Tambo (Johannesburg), East London, Dawid Stuurman (Gqeberha), Upington, Bram Fischer (Bloemfontein), Kimberley and George. Lanseria is the only privately-owned international airport providing cargo services and, due to its proximity to OR Tambo, is the only airport offering any competition to ACSA.


Sources: Who Owns Whom sector reports, CIA Factbook, African Development Bank, World Bank, Trading Economics, African Statistical Yearbook and IMF. ?>