The economy of South Africa

The economy of South Africa 

GDP figures 

The GDP in South Africa currently stands at $408.2 billion dollars, this has risen from $7.2 billion dollars 50 years ago. This indicates that the country is growing at a fast rate because in the last 50 years the size of the GDP has increased 54 times the size in was back then. 

The graph above indicates the change in GDP over the last 50 years in South Africa as you can see from the data above there was a steep rise since 2002 the GDP has rapidly grown. There is also another steep rise in 2010, this would suggest that South Africa being the host nation of the FIFA world cup helped to bring more money into the economy. 

Population 

The population of South Africa currently stands at around 50.5 million, this makes it the 24th biggest population in the world. In the last 50 years the population of South Africa has almost trebled standing at around 17 million in 1961. In comparison to other countries this is very big and allows the country to grow very quickly. However, since the year 2000 the rate of population growth took a slight slow down and hasn't  risen quicker since.

Imports and exports 

In South Africa imports are worth 70.2 billion south African rand (ZAR), this year so far, this is considered well above the average of 20.3 billion zar a year, it is also close to the record high of 76.5 billion for one year. South Africa mainly importsmachinery, foodstuffs, equipment, chemicals, petroleum products and scientific instruments. It mainly buys these goods from European Union, China, United States, Japan and Saudi Arabia.

South Africa's exports so far this year are estimated to be 63.5 billion ZAR, this is very good for half way through the year considering the average exports per year is 23.6 billion ZAR a year. This figure is very close to the national average of 68.4 billion ZAR which shows the output for this year will be very high in comparison. South Africa is well know for its rich mineral resources, it is currently the worlds largest gold and platinum exporters as well as a big diamond exporter. The main countries South Africa export to is the United Kingdom, United States, Germany, Belgium, Italy, China and Japan.

50 facts about the South African economy

1. In 2012, at 5.5%, South African interest rates were at a 30-year low.
2. South African Tax Revenue has increased from R100 billion in 1994 to R742.7 billion in 2011-12.
3. South Africa’s debt to GDP ratio is 32% (USA 100%, Japan 200%, UK 90%). The World Bank recommends a ratio of 60%.
4. SA ranks 1st among upper middle-income economies in the World Bank “Connecting to Compete 2012: Trade Logistics in the Global Economy” report. Overall, SA ranks 23 out of 155 countries included in the Logistics Performance Indicators (LPI). Its main competitor on the African continent, Nigeria, is ranked 121.
5. South Africa sold $1.8 billion worth of cars to the US in 2010, putting us ahead of Sweden and Italy as suppliers to the US market. Car sales are projected to grow 10% in 2011 to 460,000 units.
6. South Africa exported 36.9% more vehicles in 2010 than 2009.
7. The South African stock market rose 16.09% in 2010, ranking 8th out of the G20 nations and ahead of all of the G7 countries (Bespoke Investment Group).
8. South Africa is ranked 1st out of 142 countries in respect of regulation of security exchanges according to the World Economic Forum Global Competetiveness Report 2011/12
9. South Africa is ranked 1st in respect of auditing and reporting, according to the Global Competitiveness Report 2011/12.
10. South Africa ranks 1st out of 60 countries in the Economist’s House Price index for the period 1997 – 2009.
11. South Africa's banks rank 2nd in the world for soundness, according to the Global Competitiveness Report 2011/12.
12. The South African Rand was the second best performing currency against the US Dollar between 2007 and 2011, according to Bloomberg’s Currency Scorecard.
13. SA ranked 1st in Platinum output, 2nd in Palladium output, 3rd in Gold output, 6th in Coal output and 9th inwool output. (Economist)
14. SA is ranked 2nd out of 183 countries for good practice in protecting both borrowers and lenders when obtaining credit for business (World Bank Doing Business Report 2011)
15. SA is ranked 3rd in the world for protection of minority shareholders interests, according to the Global Competitiveness Report 2011/12.
16. South Africa ranked 6th in house price improvement indices as a % change in 2009, and 1st as a % change 1999/2009. (Economist).
17. SA is ranked 10th out of 142 countries for Strength of Investor Protection, according to the Global Competitiveness Report 2011/12.
18. SA is ranked 10th out of 183 countries for good practice in protecting investors in business. (World Bank Doing Business Report 2011).
19. South Africa ranks 7th out of 45 countries in the "Big Mac Index 2012". The price of a Big Mac is 42% less in South Africa than in the USA. In Switzerland and Norway, it is 62% more.
20. South Africa is ranked 12th out of a total of 134 economies in the World Economic Forum’s Global Gender Gap Report 2010, ahead of many developed nations, including, the UK (15th), United States (19), Canada (20), Australia (23) and France (46).
21. South Africa ranked 15th in terms of "largest deficits" but as a percentage of GDP is not in the top 40 countries. (Economist).
22. The JSE ranks 16th in terms of "largest market capitalisation" and 19th in terms of largest gains. (Economist)
23. SA is ranked 23rd out of 81 countries in the Jones Lang LaSalle's "World's most Transparent Real Estate Markets" placing it well ahead of China, Brazil, India and Russia. "Robust governance, strong auditing and a developed legal system" were cited as the main reasons for leading the developing markets in this rating.
24. South Africa ranks 24th out of 192 countries in the Economist’s "Largest Gold Reserves" Index and 30th in terms of official US$ reserves.
25. In a survey of 192 countries, South Africa’s unemployment as a percentage of economically active population ranked 27th.
26. SA ranks 28th in terms of number of cars produced and 18th in terms of number of cars sold. (Economist).
27. South Africa is ranked 34th out of 183 countries for ease of doing business according to Doing Business 2011, a joint publication of the World Bank and the International Finance Corporation.
28. South Africa ranks 41st out of 192 countries in the Economist’s "Biggest Exporters" Index.
29. South Africa ranked 50th out of 142 countries in the World Economic Forum’s Global Competitiveness Report 2011/12, up from 54th in 2010/11.
30. South Africa ranks 54th in a comparison of the overall tax burden of 150 countries worldwide.
31. South Africa ranks in the top 20 countries for agricultural output.
32. According to a survey of 62 countries by the World Bank and the IMF, South Africa has the 36th highest foreign debt, ahead of the US, Japan and all the European countries surveyed. The economist ranks South Africa 29th out of 60.
33. MTN has been ranked Africa’s most valuable brand in the BrandZ Top 100 Most Valuable Global Brands 2012 survey. MTN becomes the first and only African brand to make the list, debuting at position 88 in the world.
34. The number of tourists visiting South Africa has grown from 3.9million in 1994 to 11.3 million in 2010.South Africa is ranked among the top 5 countries in the world in respect of tourism growth (growing at 3 times the global average).
35. SA ranks 24th in terms of tourist arrivals at 11.3 million (France 79 million, UK 28 million, Switzerland 8.5 million, India 5.2 million). (Economist)
37. The Rand was the best performing currency against the US dollar between 2002 and 2005 (Bloomberg Currency Scoreboard)
38. South Africa has 55,000 high-net individuals holding at least US $1 million in financial assets (World Wealth Report 2008)
39. South Africa has the 27th biggest economy in the world, with a Gross Domestic Product (GDP) of US $254 billion (World Bank)
40. South Africa accounts for almost 25% of the GDP of the entire African continent, with an economy more than twice the size of the second biggest – Algeria (World Bank)
41. Gauteng is South Africa’s smallest province but produces 34% of South Africa’s GDP. (Stats SA)
42. The JSE Securities Exchange is the 14th largest equities exchange in the world, with a total market capitilisation of some R2.3 trillion.
43. More than 12,000 ‘Black Diamond’ facilities (South Africa’s new black middle class) – or 50,000 people – are moving from the townships into the suburbs of South Africa’s metro areas every month (UCT Unilever Institute)
44. The black middle class grew by 30% in 2005, adding another 421,000 black adults to SA’s middle-income layer and ramping up the black population’s share of SA’s total middle class to almost a third. Between 2001 and 2004, there were 300,000 new black entrants to the middle class. (Financial Mail)
47. South Africa generates two-thirds of Africa’s electricity. (Eskom)
48. South African power supplier provides the 4th cheapest electricity in the world.
49. Chris Hani-Baragwanath Hospital in Soweto is the biggest hospital in the world.
50. There are 39 million cell phone users in South Africa (International Telecommunication Union)

Joint Venture

Economic factors

Exchange rate/ Importing and Exporting

As this chart shows the South African currency is getting a lot stronger against the pound up until 2011 where the pound is gradually getting stronger against the Rand. This is ideal for the South African currency in terms of tourism because it makes an English person more incline to travel to South Africa if the currency is weaker against the pound. The same would apply from the perspective of a British importer they would be more likely to import goods from South Africa because they would get it cheaper than other countries. This would apply particularly if they were exporting any of the minerals from South Africa such as Gold. Therefore, this is very good for South African exporters because they would gain a lot of business from countries such as Britain and even the US because there currency is weaker therefore attracting more business.