Main Sectors of Industry

South Africa is rich in mineral resources. The country is the world's largest producer and exporter of gold, platinum, chrome and manganese, the second-largest palladium producer and the fourth-largest producer of diamonds - with mining rents accounting for around 1.4% of GDP (World Bank, latest available data). Platinum and coal are now both larger contributors to mining output than gold, as the country produces 80% of the world's platinum and has 3% of the world's coal reserves. Coal continues to play a vital role as an energy source and contributes significantly to the economy, both through the generation of export revenue and employment. Important oil and gas reserves are thought to be situated off-coast, in the Indian Ocean. South Africa has diverse manufacturing industries and is a world leader in several specialised sectors, including railway rolling stock, synthetic fuels, mining equipment and machinery. The industrial sector employs nearly one-fourth of the workforce (22%) and represents 24.5% of the country's GDP (with manufacturing representing 12% alone).

Agriculture represents a small part of the country's GDP (2.4%) and employs 5% of the workforce, a relatively low ratio compared to other African countries. South Africa's agricultural economy is highly diversified and market-oriented. The country is the world's 8th largest producer of wine and the continent's largest corn (8th producer in the world) and sugar producer. Grains and cereals - such as maize, wheat, barley and soya beans - are the county's most important crops. As such, the country produces all major grains - with the exception of rice. The “2021-2030 Agricultural outlook projections report” produced by The Bureau for Food and Agricultural Policy (BFAP) asserts that the country’s real agricultural GDP could grow by 14% by 2030, with gross production value increasing by almost 2 billion USD.

The services sector employs 73.1% of the workforce and represents 62.7% of the country's GDP. The major sectors of the economy are finance, real estate and business services, followed by general government services. South Africa has a sophisticated financial structure with an active stock exchange that ranks among the world's top 20 in terms of market capitalisation. Nevertheless, the tourism sector has been particularly affected by the COVID-19 pandemic, especially after the discovery of the “Omicron” mutation of the virus in the country, which caused the imposition of travel bans to South Africa from many countries.

Global economic activity is experiencing a broad-based and sharper-than-expected slowdown, with inflation higher than seen in several decades. The cost-of-living crisis, tightening financial conditions in most regions, Russia’s invasion of Ukraine, and the lingering COVID-19 pandemic all weigh heavily on the outlook.  Global growth is forecast to slow from 6.0 percent in 2021 to 3.2 percent in 2022 and 2.7 percent in 2023, the weakest growth profile since 2001 except for the global financial crisis and the acute phase of the COVID-19 pandemic. Global inflation is forecast to rise from 4.7 percent in 2021 to 8.8 percent in 2022 but to decline to 6.5 percent in 2023 and to 4.1 percent by 2024 (International Monetary Fund - IMF, 2023). The impact of the 2022 world events appears to have affected both sides of most sectors and markets in this country for the third year in a row - demand disruptions having run up against supply problems - making the short-term outlook uncertain for agriculture, industry and service sectors.

Source: World Bank - Latest available data.

Political Outline

Current Political Leaders

President: Cyril RAMAPHOSA (since February 2018) – ANC ; the president is both chief of state and head of government
Executive Deputy President: David MABUZA (since February 2018) - ANC

Next Election Dates

Presidential: May 2024
Legislative (National Council of Provinces and National Assembly): 2024

Current Political Context

South African President Cyril Ramaphosa has been re-elected leader of the ruling African National Congress (ANC) party in December 2022 despite a series of political difficulties and facing calls to step down as president. He is now focusing on rebuilding public support ahead of elections in 2024. Backing for the party has slipped amid persistent inequality in the country, but his re-election as leader of the ANC is strengthening his pursuit of economic reforms and paves the way for him to run for a second term as president in 2024. Nevertheless, M. Ramaphosa has many social and economical challenges to address in 2023 as South Africa experiences crippling power cuts of more than seven hours a day, an unemployment rate of 35 percent and reports of widespread corruption.

Despite M. Ramaphosa’s win, the ANC remains deeply divided. Former President Jacob Zuma leads nearly half of the party that is opposed to Ramaphosa and his anti-corruption drive. M. Mkhize has emerged as the public head of that faction.

Main Political Parties

• The African National Congress (ANC): ruling party in power since the end of apartheid and Nelson Mandela's election in 1994; consistently wins at least 60% of the vote, although its popularity declined by several percentage points between 2004 and 2014; centre-left to left-wing, but allied with the far left groups, the Congress of South African Trade Unions (COSATU) and the South African Communist Party (SACP)
• Democratic Alliance (DA): official opposition, centrist, supports liberal democracy and free market principles, progressively gaining in popularity
• Economic Freedom Fighters (EFF): far left, Marxist, has been gaining popularity
• Inkatha Freedom Party (IFP): conservative, right-wing, dominated by rural, Zulu-speakers based in the KwaZulu-Natal region; emphasises social justice and the role of traditional communities. The party's popularity has been consistently decreasing in recent years.

Executive Power

The President is both the chief of state and the head of the Government. The President is indirectly elected by the Parliament (lower house) to serve a five-year term. He/She is usually the leader of the largest party. The President is the also commander-in-chief of the armed forces, declares war or peace and appoints the Cabinet.

Legislative Power

South Africa has a bicameral legislature. The National Council of Provinces (the upper house) has 90 seats, with 10 members elected by each of the nine provincial legislatures for five-year terms. The National Assembly ( the lower house) has 400 seats; the members are directly elected in multi-seat constituencies by proportional representation vote to serve 5-year terms.

The executive branch of the Government is directly or indirectly dependent on the support of the Parliament, often expressed through a vote of confidence. The President can dissolve the Parliament if a majority of the members of the National Assembly seek its dissolution and if has been at least three years since the last election.