The economy of South Africa

Keywords: South African agricultural industry, South African jobs, Black Economic Empowerment policies
Source: Wikipedia

JSE is the largest stock exchange on the African continent

South Africa has a mixed economy with a high rate of poverty and low GDP per capita. Unemployment is high and South Africa is ranked in the top 10 countries in the world for income inequality,[95][96][97] measured by the Gini coefficient. Unlike most of the world's poor countries, South Africa does not have a thriving informal economy; according to OECD estimates, only 15% of South African jobs are in the informal sector, compared with around half in Brazil and India and nearly three-quarters in Indonesia. The OECD attributes this difference to South Africa's widespread welfare system. World Bank research shows that South Africa has one of the widest gaps between per capita GNP versus its Human Development Index ranking, with only Botswana showing a larger gap.

After 1994 government policy brought down inflation, stabilised public finances, and some foreign capital was attracted, however growth was still subpar. From 2004 onward economic growth picked up significantly; both employment and capital formation increased.

South Africa is a popular tourist destination, and a substantial amount of revenue comes from tourism. Illegal immigrants are involved in informal trading. Many immigrants to South Africa continue to live in poor conditions, and the immigration policy has become increasingly restrictive since 1994.

Principal international trading partners of South Africa—besides other African countries—include Germany, the United States, China, Japan, the United Kingdom and Spain.

The South African agricultural industry contributes around 10% of formal employment, relatively low compared to other parts of Africa, as well as providing work for casual labourers and contributing around 2.6% of GDP for the nation. Due to the aridity of the land, only 13.5% can be used for crop production, and only 3% is considered high potential land.

Labour market

Workers packing pears for export in a packing house in the Ceres valley.

During 1995–2003, the number of formal jobs decreased and informal jobs increased; overall unemployment worsened.

The government's Black Economic Empowerment policies have drawn criticism from Neva Makgetla, lead economist for research and information at the Development Bank of Southern Africa, for focusing "almost exclusively on promoting individual ownership by black people (which) does little to address broader economic disparities, though the rich may become more diverse." Official affirmative action policies have seen a rise in black economic wealth and an emerging black middle class. Other problems include state ownership and interference, which impose high barriers to entry in many areas. Restrictive labour regulations have contributed to the unemployment malaise.

Along with many African nations, South Africa has been experiencing a "brain drain" in the past 20 years. This is believed to be potentially damaging for the regional economy, and is almost certainly detrimental for the well-being of those reliant on the healthcare infrastructure.The skills drain in South Africa tends to demonstrate racial contours given the skills distribution legacy of South Africa and has thus resulted in large white South African communities abroad. However, the statistics which purport to show a brain drain are disputed and also do not account for repatriation and expiry of foreign work contracts. According to several surveys there has been a reverse in brain drain following the global financial crisis of 2008-2009 and expiration of foreign work contracts. In the first quarter of 2011, confidence levels for graduate professionals were recorded at a level of 84% in a PPS survey.