South Africa Economy

South Africa Population and Economy


Southern African state. The population, which at the 2001 census was equal to 44,819,778 residents, has a rather low average annual growth rate (0.5 % in the period 2000-2005). Low birth rate, low life expectancy at birth, high mortality and infant mortality rates, anomalous variations in the distribution of the population by sex and age group: these are all attributable to the spread of the AIDS epidemic, which is claiming victims especially in the community Black. The government coped with this health emergency belatedly, and an incipient decline in the infection rate was only recorded at the beginning of the 21st.Century. Three quarters of the population are blacks and 15 % whites; the remaining 10 % is represented by colors, of mixed descent, and by Asians. The African majority is made up of many ethnic groups, culturally and linguistically heterogeneous, the largest of which are Zulu, Xhosa, Tswana and Bapedi. Whites are mostly descended from colonial immigrants: Dutch, German, British and French, divided into Afrikaans and English language groups. The white population is dwindling, due to the low birth rate and the tendency to emigrate. Until the end of the 1980s, racial divisions were exasperated by the politics of apartheid. Although the government began to dismantle the segregation policy in the early 1990s, racial inequalities remain accentuated. Marked disparities are recorded in the distribution of wealth (81 % of income taxes are borne by 3.8 million whites, less than 10 % of the population), and social hardship does not affect all citizens to the same extent. For example, in 2005 the average infant mortality rate was 61.8 ‰ (in Italy, for comparison, 5.9 ‰), but it exceeded 70‰ within the black community. More than half of South African citizens live below the poverty line, with an average monthly income of less than 300 rand (equal to 40 euros). Unemployment is a worrying structural fact: with an official rate of 26.6 %, the nation’s most critical economic challenge is the creation of jobs for the 4.7 million unemployed (2005), mostly belonging to the poorer (see below: Economic and financial policy).

Social indicators definitely include South Africa in the category of underdeveloped countries. The value of the human development index, calculated by the United Nations in 2006 on the basis of indicators considered significant for the level of economic and social well-being (in particular: life expectancy at birth, 47 years; adult literacy rate, 82.4 %; annual per capita income, $ 11,192), places the South Africa at 121st place in a world ranking comprising 177nations. But if we take into account the average income per resident and the nature of exports, mostly made up of mineral raw materials, it would be more correct to classify South Africa in the category of emerging countries.

In fact, the country, which also occupies just 4 % of the surface and includes only 7 % of the total population of Africa, has a position of economic supremacy on the continent, as confirmed by the following data. In Africa south of the Sahara, one in two vehicles circulate in the South Africa; one in two telephone lines and one in three railway lines are installed in this country. Three-fifths of the exports of the African states south of the Sahara come from South Africa, and the size and dynamism of its companies are attested by well-known multinationals: De Beers, Anglo-American Corporation and Anglogold Ashanti. The latter, in particular, holds important stakes in the gold mines of Mali, Senegal and Namibia. Through the intermediation of De Beers, South African companies play a leading role in the extraction of diamonds in Namibia and Botswana. The Anglo-American Corporation, in turn, owns half of Zambia’s copper mines and controls diamond production in the Democratic Republic of the Congo.

On the scale of southern Africa, South African hegemony is even more pronounced. South Africa owns more than 80 % of the wealth of the entire region, and represents the main customer and the first supplier of the five neighboring countries. The dependence on South Africa, particularly in the economic field, is due to its geographical position, but above all to the legacy of decades of wars that have weakened the countries of the area. As for the communication routes, the most efficient all lead to the South African territory and its ports, on which almost a quarter of the continent’s railway network and 60 % of that of southern Africa converge.

Affected by the repercussions of the Asian crisis, the South Africa suffered a sharp slowdown in economic growth in the late 1990s. The situation has improved since the early 21st century. (4.2 % in 2006), but economic development is encountering difficulties, mainly linked to the climate of political uncertainty and violence, which discourage international investors. Furthermore, many commodities have seen their prices fall on the world market. Emblematic is, for example, the case of gold, whose price depreciated by 25 % from 1995 to 2000 due to various concomitant factors: fall in inflation rates (with consequent loss of the safe haven value of gold); introduction of the single currency in Europe (with massive sales of gold by central banks in order to respect the parameters of the Maastricht Treaty); increase in world gold production, particularly in Russia. For South Africa economics and business, please check

In 2006 the primary sector, industry and services contributed to the formation of GDP for 2.6 %, 30.3 % and 67.1 % respectively, occupying 7.8 %, 21.7 % and 70.5 % of the workforce (2004). The economy, historically dominated by agriculture and mining, has seen the importance of the manufacturing industry, financial services, as well as tourism gradually increase. The primary sector has its strength in sheep and cattle breeding, while only 13% of the territory is used for crops. The most important crop is corn, but the most profitable products are those for export that interest niche markets such as wine, fine fruit, ostrich meat. The mining industry remains an essential source of foreign currency. Gold alone accounts for about one third of the value of exports; other important mineral products are manganese, chromium, platinum, diamonds, coal. Manufacturing industries have faced decisive challenges after opening the economy to global competition. The sector is dominated by metallurgical and engineering industries (in particular steel products), chemical and petrochemical industries. To sanction the policy of racial segregation, the United Nations had decreed in 1977, an embargo on arms sales to the Republic of South Africa. The decision prompted the country to equip itself with its own military arsenal, and it currently ranks tenth among arms exporting nations. Industrial activities are mainly located in four areas, which are based in Pretoria-Johannesburg, Cape Town, Port Elizabeth, Durban. Apart from these four economic centers, development is marginal, as government strategies have so far failed to propagate it elsewhere.

South Africa Economy