Africa's Top Five Economies. #1 South Africa - An opportunity still available

South Africa is Africa’s largest economy with a GDP of USD384 312 674 445.00 according to the World Bank (USD 524 billion estimate by Ventures Africa). The country is home to over 51 million people made up of roughly 79% blacks, 9% coloured, 9% whites, 2% Indian or Asians and about 1% people of origins.

The economic capital of South Africa, Johannesburg (and the rest of the greater Gauteng Province) is also Africa’s premier economic capital with regional and multinational companies head-quartered in mainly Johannesburg’s Sandton City.

The South African economy is advanced, with the service sector contributing 66.7% of the country’s GDP (Industry: 30.8%; Agric: 2.5%). Inequality, a long-time remnant of the effects of the apartheid era government is still huge. The government is making an effort to level the playing field through Employment Equity laws, Broad Based Black Economic Empowerment (BBBEE) programs, affordable housing, services and other initiatives which remain widely panned by some South Africans.

The black majority look increasingly frustrated by the government’s inability to meet promises of levelling the playing field, and the whites and other minorities see some Employment Equity laws as crowding them out of participating in the economy. The government remain steadfast in spearheading employment and empowerment equity initiatives, supported by statistics that show that 10% of South Africa’s population account for 58% of the nation’s income, whereas the bottom 10% contribute just 0.5%. The World Bank cites income inequality as a huge cause for long term stability concern in South Africa.

From a distant, South Africa is chugging away in development terms. The country continues to invest in massive infrastructure programs. The road network is expansive, and the rail network is beginning to offer products and services to entice the black and white middle-class. At close inspection, crime, corruption and simmering discontent at the government’s handling of the economy keep slowly eroding the ruling ANC government’s popularity. The main opposition party has long been the Democratic Alliance, but its efforts to gain the important black voters seem hamstrung by the predominantly white leadership, which blacks remain suspicious of. The gory effects of apartheid are still fresh for all to see – poorly educated blacks, and most importantly, generational poverty that militates efforts of black families to emancipate themselves by acquiring a quality education. Online chat rooms like News24.com show a country divided along racial lines. Even the simplest of comments incite political mudslinging.

Yet South Africa’s problems are not insurmountable. The country is largely still intact, and if the right policies are championed, it is possible for the country to go ahead and transform itself into a developed nation. Unemployment, at 25% is high by any standards considered. The unemployed are largely African youths who are yet to acquire the right skills, even after leaving college. More effort should be put on encouraging companies to intern these youths for tax credits, so that the youths can gain critical skills, instead of the largely elitist BBBEE. There is also need for inclusiveness in dealing with the problems of inequality. A balance has to be reached where blacks, whites, Indians, Asians other races feel included in important economic programs. Senseless hate comments from all races targeted at other races should be punishable. Whites should understand generational inequalities that led to generational poverty take time to correct, and the government should aim to achieve elimination of the inequalities without destroying the economy and disenfranchising the white youths. Since the population structure of the country is known, it may be worth the while to mould employment equity laws in line with the 79%; 9%; 9%; 2%; 1% structure, and setting a time frame to have these targets achieved. A national as huge as South Africa can design other better ways to achieve its equality targets.

If cool minds are at work, black, white purple, blue and whatever race or creed can make this great country that is South Africa work. Business, Labour and Government have to find that delicate balance that eliminate inequality and come up with forward looking economic policies. It is inequality though, that although many may chose to ignore, may end up giving a huge mileage to political malcontents like the Economic Freedom Fighters (EFF).

South Africa is an opportunity not yet squandered. It is an opportunity still available for the taking. The government, labour, business and all progressive citizens should take it, for it will be a death so sudden for this beautiful South Africa, which is a beacon of hope for the rest of the African continent, if the EFF ever takes that opportunity.

South Africa: Information & Statistics at a glance

Population: 51 189 302 million (2012)

GDP: USD384 312 674 445.00 (World Bank); USD 524 billion (Ventures Africa) - (2012)

GDP Growth: 2.5% (World Bank)- 2012; Average 3.2% since 1995 (Ventures Africa)

Inflation: 5.4% (2012)

Currency: South Africa Rand (ZAR)

Exchange Rate now: USD1 = ZAR 10; Long Term Average: USD1 = ZAR 8

Life Expectancy at Birth: 55 Years (2011)

GNI per capita: USD7610 – considered upper middle income

Main Exports: Gold (8%), Platinum (8%), Coal (6%), Iron Ore (7%) Motor Vehicles and Car Parts (5%) – Percentages are of  South Africa’s total exports

Main Imports: Fuel (24%), Motor Vehicles (10%), Electronics (3%), Pharmaceuticals (2%).- Percentage are of South Africa’s total imports

Main Trading Partners: Japan, Germany, USA, UK, Rest of Africa

President: J.G. Zuma

Ruling Party: ANC

Neighbouring Countries: Zimbabwe, Botswana, Namibia, Mozambique, Lesotho, Swaziland

Write-Up by the AfroMetrics blogger
Sources of Information: World Bank, Ventures Africa, SA government websites, tradingeconomics.com and others.