South Africa

Economic and political outline

Economic indicators | Foreign Trade in figures | Sources of economic information | Political outline

Economic indicators

South Africa is the economic giant in the African continent, contributing nearly 40% to the continent's total GDP. In the manufacturing sector, 75 out of the 100 main African companies belong to South Africa. The GDP growth rate was 5.1% in 2007 and according to IMF is expected to slow down to 3.9% in 2008 owing to power shortages and global economic volatility, before picking up again from 2009 as preparations for the 2010 football World Cup gather momentum.

Inflation is expected to remain above 8% during 2008 before subsiding towards the end of the year as food and oil price pressures ease. The government's main focus will remain on building infrastructures, nurturing industry, improving skills, accelerating land reform and reducing crime. However, shortage of skilled manpower remains a serious constraint in South Africa, although considerable public and private investments are being made to address this problem.

Moreover, unemployment (touching nearly 30% of the country's active population) and AIDS (infecting nearly 12% of the population) are major concerns for the overall economic development of the country.

GDP Indicators	2004	2005	2006	2007	2008
GDP (billions USD)	216.77	241.89	255.27	274.50e	299.60e
GDP (constant prices, annual % change)	4.8	5.1	5.0	4.7e	4.2e
GDP per capita (USD)	4,665.71	5,158.84	5,376.19e	5,723.93e	6,185.43e
Inflation rate (%)	1.4	3.4	4.7	6.6e	6.2e
Unemployment rate (% of the labor force)	26.2	26.7	25.5	25.5	n.c.
Current Account (billions USD)	-6.92	-9.79	-16.61	-18.50e	-19.24e
Current Account (in % of GDP)	-3.2	-4.0	-6.5	-6.7e	-6.4e

Source: IMF - World Economic Outlook Database; ILO, Laborstat - Yearly Statistics

Note: (e) Estimated data

Socio-demographic indicators	2005	2006	2007
Unemployment rate (%)	26.7	25.5	25.5

Source:

Main sectors of industry

South Africa is rich in mineral resources. It is the world's largest producer and exporter of gold & platinum and the 5th largest producer of diamonds in the world. The country produces 70% of the world platinum and also has 60% of the global coal reserves.

The country's diverse manufacturing industry is a world leader in several specialized sectors, which includes railway rolling stock, synthetic fuels, and mining equipment and machinery. The services sector is flourishing (66% of the GNP). Agriculture represents only 3% of the GNP but employs 30% of the country's active population. South Africa is the 6th largest producer of wine in the world.

South Africa has a sophisticated financial structure with a large and active stock exchange that ranks 17th in the world in terms of total market capitalization.

Breakdown of economic activity by sector	Agriculture	Industry	Services
Value added (annual % change)	-13.1	4.2	6.0
Value added (in % of GDP)	2.5	30.5	67.0
Employment by sector (in % of total employment)	10.3	24.5	65.1

Source: World Bank - World Development Indicators - last available data.

Monetary indicators	2002	2003	2004	2005	2006
Average annual exchange rate for 1 USD	10.54	7.56	6.46	6.36	6.77

Source: World Bank - World Development Indicators

Foreign trade in figures

South Africa is very open to international trade. The share of foreign trade in country's GNP is nearly 50%. The top three export partners of South Africa are: the U.S.A., Japan, and Germany. Commodities mainly exported are precious stones & pearls, iron & steel, mineral fuels & oils, vehicles, and machinery. The top three import partners are: Germany, China and the U.S.A. South Africa mainly imports: manufactured goods (machinery, electric and electronic equipment, etc.), hydrocarbons (oil, gas, etc.), and vehicles.

Foreign trade indicators	2002	2003	2004	2005	2006
Imports of goods (millions USD)	27,016	35,270	48,518	56,484	69,941
Exports of goods (millions USD)	31,772	38,700	48,237	55,280	63,767
Imports of services (millions USD)	5,504	8,045	10,328	12,155	14,291
Exports of services (millions USD)	4,985	8,298	9,682	11,157	12,022
Imports of goods and services (annual % change)	5.1	8.8	14.1	10.1	18.4
Exports of goods and services (annual % change)	0.5	0.3	2.5	6.7	5.5
Imports of goods and services (in % of GDP)	29.1	25.9	27.1	28.3	33.0
Exports of goods and services (in % of GDP)	32.7	27.8	26.3	26.8	29.1
Trade Balance (millions USD)	4,756	3,431	-281	-1,204	-6,175
Trade Balance (including service) (millions USD)	4,237	3,684	-928	-2,201	-8,444
Current Account (millions USD)	884	-1,902	-7,003	-9,142	-16,276
Current Account (in % of GDP)	0.8	-1.1	-3.2	-3.8	-6.4
Foreign trade (in % of GDP)	61.8	53.7	53.4	55.1	62.2

Source: World Bank - World Development Indicators

Main partner countries

Main customers (% of exports)	2006
Japan	11.9%
United States	11.5%
United Kingdom	8.8%
Germany	7.5%
Netherlands	5.2%

Main suppliers (% of imports)	2006
Germany	12.5%
China	10.0%
United States	7.6%
Japan	6.5%
Saudi Arabia	5.3%

Source: 2006

Main products

Main exports (% of exports)	2006
Natural or cultured pearls, precious or semi-precious stones	20.7%
Iron and steel	10.5%
Mineral fuels, mineral oils	9.6%
Machinery and mechanical appliances	8.8%
Vehicles other than railway or tramway	8.8%

Main imports (% of imports)	2006
Mineral fuels, mineral oils	18.3%
Machinery and mechanical appliances	16.2%
Electrical machinery and equipment	10.0%
Vehicles other than railway or tramway	9.9%

Source: 2006

To see more products: More imports (Intracen Data)
More exports (Intracen Data)

Sources of 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
Online newspapers: Business Day
South African Newspapers
Mail and Guardian Online
African Sporting Gazette
Afrika link
List of online newspapers
Search Engines: Aardvark South Africa
WoYaa
Southafrica
Ananzi
Easy Info
M-web
Economic portals: Economy watch

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

South Africa is a democratic but one-party dominant state with the ANC (African National Congress - a social-democratic political party formed by Nelson Mandela to fight apartheid) in power since 1994. Opposition parties are allowed, but are widely considered to have no real chance of gaining power.
Other important parties are:

• African Christian Democratic Party (ACDP) - claims to represent "Bible believing Christians"

• Inkatha Freedom Party (IFP) – advocates prevention of one-part state and social justice for all

• Democratic Alliance (DA) – a liberal political party which officially opposes the ANC

• South African Communist Party (SACP) – advocates communist ideology

• United Democratic Movement (UDM) – advocates individual self-reliance, liberty and diversity

Current political leaders