Economy of South Africa

The economy of South Africa is essentially based on foreign trade with over half the gross national product (GNP) being obtained through exports and imports. Since World War II, the country's economy has grown from agriculture based to modern industry based. The economy of South Africa has shown an upward trend in terms of growth since September 1999 till June 2005 with an average economic growth rate of 3.5%. This is also recorded to be the longest period of economic expansion in the country's history.

South Africa is the economic powerhouse of the continent of Africa, constituting about 25% of the continent's gross domestic product (GDP). The country's strength lies in its well developed financial and industrial infrastructure which provides much growth potential.

Major commercial cities in South Africa are Johannesburg, the coastal Durban/Pinetown areas and Cape Peninsula including Cape Town.

Major Economic Sectors

South Africa's leading industrial sector is mining. Other major economic sectors are:

•  Manufacturing sector

•  Oil and gas

•  Clothing and textiles

•  Chemicals

•  Agriculture

•  Tourism

•  Financial services and banking sectors

•  Natural mineral and metal resources

Globally acknowledged as the leading supplier of mineral and mineral products, South Africa exports to about 87 countries. The dominating exports and revenue earning minerals are gold, platinum group elements (PGE's), coal and diamonds.

With the introduction of the new Mining Charter of South Africa, the mining industry structure is set to change drastically.

The agricultural sector constitutes mostly cattle and sheep farming with only 13% land being used for growing crops and accounts for 4% of the country's GDP. Major agricultural crops include maize, wheat, oats, tobacco, wine, wool, sugarcane and sunflower.

A remarkable growth was shown by the clothing and textiles industry which earned R791 million in 2001 from exports to the US alone.

Other export commodities include- chemical products, machinery, electric appliances and vehicles. Goods imported are machines, plastics products, chemicals scientific instruments and vehicles.

Nevertheless, the economic growth has not been strong enough to lessen the high unemployment rate still prevalent in South Africa since the apartheid era.

However the country's authorities have adopted several economic policies to raise economic growth and reduce the unemployment rate.

 

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