The second largest economy in Africa is projected to fall short of 0.5 percent in growth, emphasizing that the South African economy is unlike to come out of a state of duress following the downward trend in the economy since March, 2017. The South African Reserve Bank Governor Lesetja Kganyago, already gave a projection on the likelihood of growth to have retuned in the second quarter of 2017 after a short recession.
The South African economy is said to account for 35 percent Africa’s gross domestic product (GPP), and it is ranked as an upper-middle-income economy by the World Bank – one of only four such countries in Africa (alongside Botswana, Gabon and Mauritius). The nation is amongst the G-20, and only African member of the group.
There has been significant economic growth since 1996. After over twelve years of international sanctions, South Africa’s Gross Domestic Product has almost tripled to $400 billion, and foreign exchange reserves have increased from $3 billion to nearly $50 billion creating a diversified economy with a growing and sizable middle class, within two decades of establishing democracy.
South African President Jacob Zuma, attributes the ongoing economic duress to weak consumer demand and stagnancy in business investments.
However, militating forces such as, inefficient government bureaucracy, restrictive labor regulations, shortage of educated workers, political instability, and corruption contributes to the struggles faced by the country. It is important to address these issues in order to improve the country’s national and economy growth.
It is established that South Africa compares well to other emerging markets on affordability and availability of capital, financial market sophistication, business tax rates and infrastructure.