South Africa Overview: Development News, Research, Data

Prior to this, electricity supply shortages had constrained South Africa’s growth for several years. The cumulated duration of the outages due to rotational load shedding, each of which lasted https://liberty.co.za 2 to 4 hours, was equivalent to 289 days in 2023, up from 157 in 2022 and 48 in 2021. This severe electricity shortfall disrupted economic activity and increased operating costs for businesses, many of which rely on costly diesel generators.

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Operation Vulindlela 2.0 reforms, with a focus on municipalities, the cutting of red tape stifling low-cost property development, sorting out PRASA issues and digital transformation will further ease structural constraints, he says. South Africa had no load shedding for the past nine months and no serious load shedding is expected, although further reforms africa gold capital investment are needed, he says. He also predicts that Inflation will slow further, but at a more moderate rate than in 2024, with more repo rate cuts in the first half of the year in developed countries as well as in emerging economies. Make the best decisions about the future of your business with the most reliable economic intelligence. FocusEconomics provides data, forecasts and analysis for hundreds of countries and commodities. South Africa is rich in natural resources, with significant reserves of gold, diamonds, platinum, coal, and iron ore.

South Africa Economic Forecasts

The Wildlife Conservation Bond (WCB), also known as the “Rhino Bond” (a $150 million IBRD bond), is the world’s first species impact bond linking investment return (under a bond issuance to conservation performance) to allow private and institutional investors to participate in a market that is historically a focus of donors and philanthropists. Rhino Bond investors agree to forego periodic interest coupon payments and instead direct the money to fund rhino conservation in two protected african gold capital areas in South Africa. If rhino population growth rates climb over five years (that is, if black rhino growth is above 4% annually), investors receive a payment, financed through the Global Environment Facility (GEF), of $0 to $13.76 million.

Agriculture and food processing

Since the late 1970s, however, South Africa has had continuing economic problems, initially because its apartheid policies led many countries to withhold foreign investment and to impose increasingly severe trade sanctions against it. The $750 million South Africa COVID-19 Response Development Policy Operation supported government efforts to accelerate its COVID-19 response aimed at protecting the poor and vulnerable from the adverse socio-economic impacts of the pandemic and promoting sustainable recovery. The DPL supported the implementation of South Africa’s Economic Reconstruction and Recovery Plan, including priority reforms, improving the stability of the financial sector, and supporting the country’s commitments to addressing climate change.

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The establishment of the Government of National Unity following the elections in May last year has demonstrated the commitment of leaders across the political spectrum to stability, progress and partnership. Through South Africa’s G20 Presidency we will demonstrate our unwavering commitment to global solidarity, equality and sustainability. David Lerche, chief investment officer at Sanlam Wealth, says Sanlam expects inflation to be around 4.3% in 2025. “Uncertainty around implementation regarding their timing and extent will still lead to further rate cuts in the US and therefore I still expect some softening in the US dollar. Demand pick-up could mean less downside potential for consumer-goods inflation, while there is no strong upside. I expect headline inflation below 4.5% during 2025 with below 4% in the first half before drifting slowly towards 4.5% by the end of 2025.

• The recovery in employment continued in 2023 (790,000 jobs were added, leading to a higher level of employment than before the pandemic) but the pace of job creation has not kept up with the growing labor force, resulting in a rising number of unemployed people.
• In 1996 the government created a five-year plan—Growth, Employment, and Redistribution (GEAR)—that focused on privatization and the removal of exchange controls.
• Outlooks for 2024 and beyond have also moderated and are dependent on the (historically slow) speed of structural reforms, largely to address record levels of load shedding experienced during 2023.
• Through South Africa’s G20 Presidency we will demonstrate our unwavering commitment to global solidarity, equality and sustainability.
• The Trade and Development Agency also has been actively involved in funding feasibility studies and identifying investment opportunities in South Africa for U.S. businesses.

Labour market

South African companies which provide services related to the Space industry, also increasing, and with the correct government legislation and support, this sector is expected to grow in South Africa. We have introduced bold economic reforms to overcome persistent challenges and unlock the vast potential of our country and its people. His extensive background spans the private sector, where he worked in equity and investment, as well as the public sector, where he served as a senior economist at SARS. Frederick Mitchell is an economist with 16 years of experience, specializing in the intersection of politics, economics, and finance on both domestic and international levels. Economists believe that South Africa’s economy will improve in 2025 but warn that geopolitical risks remain elevated with post-US election policies, including possible tariffs, potentially hitting growth and inflation in 2026. This program has contributed to strengthening economic incentives, increasing the speed of starting a business, reforming infrastructure finance and fiscal management, and promoting inclusive urban development—with a focus on informal settlements.

Inflation averaged 6.0% in 2023 but stood at 9.3% for those at the bottom 20% of the income distribution. Its decarbonization and adaptation must be people-centered, creating jobs and protecting the poorest in the most unequal society in the world (a “just transition”), to build the necessary broad support in favor of reforms. Furthermore, climate engagement was built in as a key component of policy lending, with climate-related prior actions in the South Africa COVID-19 Response Development Policy Operation as well as South Africa Sustainable and Low-Carbon Energy Transition Development Policy Loan II. A 100MWh Battery Energy Storage System (Hex BESS) was commissioned in November 2023 under the Eskom Renewables Support Program, the first and largest of its kind in Africa.

Key insights

The South Africa Financial Sector Development Program is a Bank technical assistance program, launched in September 2018, with support from the Swiss State Secretariat for Economic Affairs. Following the May 2024 national elections, a Government of National Unity (GNU) was formed in June 2024, led by President Cyril Ramaphosa. It focuses on constitutionalism, economic recovery, workers’ rights, social protection, and equity. The GNU brings together 11 political parties in a power-sharing agreement and aims to rebuild South Africa’s economy through key reforms for faster growth, better service delivery, and job creation, marking a new direction for economic policy and implementation. The economy of South Africa was revolutionized in the late 19th century when diamonds and gold were discovered there. In the years since World War II, the country has established a well-developed manufacturing base, and it has experienced highly variable growth rates, including some years when its growth rate was among the highest in the world.

However, he says the US election outcome somewhat dampened his previous view of a much stronger Rand exchange rate, although he still expects the Rand to strengthen from current oversold levels. He says the Rand is unlikely to weaken significantly from current levels, with the base case expectation being that the Rand-/dollar exchange rate will be more stable in 2025. The global base case suggests a Brent oil price of around $65 – $70 per barrel for 2025, while he expects food inflation to drift up slowly during the first half of the year before accelerating somewhat in the second half to reach 6% by the end of 2025 from the current 1.6%.