Dutch traders landed at the southern tip of modern day South Africa in 1652 and established a stopover point on the spice route between the Netherlands and the Far East, founding the city of Cape Town. After the British seized the Cape of Good Hope area in 1806, many of the Dutch settlers (Afrikaners, called "Boers" (farmers) by the British) trekked north to found their own republics, Transvaal and Orange Free State. The discovery of diamonds (1867) and gold (1886) spurred wealth and immigration and intensified the subjugation of the native inhabitants. The Afrikaners resisted British encroachments but were defeated in the Second South African War (1899-1902); however, the British and the Afrikaners, ruled together beginning in 1910 under the Union of South Africa, which became a republic in 1961 after a whites-only referendum. In 1948, the Afrikaner-dominated National Party was voted into power and instituted a policy of apartheid - the separate development of the races - which favored the white minority at the expense of the black majority. The African National Congress (ANC) led the opposition to apartheid and many top ANC leaders, such as Nelson MANDELA, spent decades in South Africa's prisons. Internal protests and insurgency, as well as boycotts by some Western nations and institutions, led to the regime's eventual willingness to negotiate a peaceful transition to majority rule. The first multi-racial elections in 1994 following the end of apartheid ushered in majority rule under an ANC-led government. South Africa has since struggled to address apartheid-era imbalances in decent housing, education, and health care. ANC infighting came to a head in 2008 when President Thabo MBEKI was recalled by Parliament, and Deputy President Kgalema MOTLANTHE, succeeded him as interim president. Jacob ZUMA became president after the ANC won general elections in 2009; he was reelected in 2014.
Southern Africa, at the southern tip of the continent of Africa
gold, chromium, antimony, coal, iron ore, manganese, nickel, phosphates, tin, rare earth elements, uranium, gem diamonds, platinum, copper, vanadium, salt, natural gas
Population - distribution
the population concentrated along the southern and southeastern coast, and inland around Petoria; the eastern half of the country is more densly populated than the west
IsiZulu (official) 22.7%, IsiXhosa (official) 16%, Afrikaans (official) 13.5%, English (official) 9.6%, Sepedi (official) 9.1%, Setswana (official) 8%, Sesotho (official) 7.6%, Xitsonga (official) 4.5%, siSwati (official) 2.5%, Tshivenda (official) 2.4%, isiNdebele (official) 2.1%, sign language 0.5%, other 1.6% (2011 est.)
Johannesburg (includes Ekurhuleni) 9.399 million; Cape Town (legislative capital) 3.66 million; Durban 2.901 million; PRETORIA (capital) 2.059 million; Port Elizabeth 1.179 million; Vereeniging 1.155 million (2015)
- Conventional long form
- Republic of South Africa
- Conventional short form
- South Africa
- Local long form
- Local short form
- Geographic coordinates
- 25 42 S, 28 13 E
- Time difference
- UTC+2 (7 hours ahead of Washington, DC, during Standard Time)
has not submitted an ICJ jurisdiction declaration; accepts ICCt jurisdiction
South Africa is a middle-income emerging market with an abundant supply of natural resources; well-developed financial, legal, communications, energy, and transport sectors; and a stock exchange that is Africa’s largest and among the top 20 in the world.
- External debt stocks
- US$ 137,887,377,000
- Total tax rate (% of commercial profits)
- Real Interest Rate
- Manufacturing, value added (% of GDP)
- Current Account Balance
- US$ -9,478,627,773
- Labor Force, Total
- Employment in Agriculture
- Employment in Industry
- Employment in Services
- Unemployment Rate
- Imports of goods and services
- US$ 88,971,352,042
- Exports of goods and services
- US$ 89,401,819,220
- Total Merchandise Trade
- FDI, net inflows
- US$ 2,250,190,584
- Commercial Service Exports
- US$ 13,972,748,248
corn, wheat, sugarcane, fruits, vegetables; beef, poultry, mutton, wool, dairy products
mining (world's largest producer of platinum, gold, chromium), automobile assembly, metalworking, machinery, textiles, iron and steel, chemicals, fertilizer, foodstuffs, commercial ship repair
- gold, diamonds, platinum, other metals and minerals, machinery and equipment
- China 9.2%, US 7.6%, Germany 6.6%, Namibia 5.1%, Botswana 5.1%, Japan 4.9%, UK 4.1% (2015)
- machinery and equipment, chemicals, petroleum products, scientific instruments, foodstuffs
- China 18.4%, Germany 11.4%, US 7.1%, India 5% (2015)
- Country Risk Rating
- A very uncertain political and economic outlook and a business environment with many troublesome weaknesses can have a significant impact on corporate payment behavior. Corporate default probability is high.
- Business Climate Rating
- The business environment is acceptable. Corporate financial information is sometimes neither readily available nor sufficiently reliable. Debt collection is not always efficient and the institutional framework has shortcomings. Intercompany transactions may thus run into appreciable difficulties in the acceptable but occasionally unstable environments rated A4.
- Economic and political power
- Rich in natural resources (gold, platinum, coal, chromium, etc.)
- Developed services sector (in particular financial)
- Legal system provides protection for investors
- Poverty, inequalities, sources of social risks (crime, demonstrations)
- High level of unemployment and shortages of skilled labor
- Infrastructure shortcomings (transport, energy)
- Dependence on volatile foreign capital flows
South African growth is expected to remain very weakly positive in 2017. Agricultural activity, badly hit by drought in 2016, could benefit from more favorable weather conditions. Infrastructure projects could sustain construction and the industrial sector.
The brakes on growth and uncertainties over the country's economic development are still significant, however. Industrial production could continue to be impeded by the lack of competitiveness and persistent problems with electricity supply, despite the improvement observed since 2016, as well as low prices for mining products. In contrast, household consumption, traditional driver of the economy and boosted by a slight downturn in inflation, is expected to suffer from the historically high level of unemployment (27% in late 2016). The introduction of a national minimum wage, proposed by the government in late 2016, would help stimulate private demand; however, implementation, if it is indeed confirmed, will not be before the second half of 2017.
Rising oil prices are likely to fuel inflationary tensions, which could, however, be mitigated by food price moderation.
The rating agencies' decision to hold South Africa's status at "investment grade" at the end of 2016 could have a positive impact on household and investor confidence at the beginning of 2017. But the risk of a downgrading in 2017 has not gone away and this threat could dissuade businesses from investing. A downgrade to "speculative" would trigger the depreciation of the rand, fuelling inflationary pressures and dampen household consumption, while discouraging investment still further. Uncertainties over the development of the political situation are also weakening the country's growth prospects.
The South African government needs to bring its budget deficit under control and stabilise its debt in order to avoid any further downgrade by the rating agencies. The challenge is sizeable, given the weakness of activity, which is putting pressure on tax receipts. Further tax rises are provided for in the April 2016/March 2017 budget. However, the weak economic growth could limit government income, while current spending (about 50% of the total) is likely to remain fairly stable and the government remains committed to the realisation of infrastructure projects. Furthermore, the burden of repaying the public debt is increasing because of higher interest rates on the domestic market, the main source of government finance. Support for some public-sector companies (Eskom, South Africa Airways) could also be a burden on the public finances.
The current account balance is expected to deteriorate in 2017. Exports, dominated by mining products (particularly gold and platinum), which account for almost a third of the total, are not expected increase much. Commodity prices, although more positively oriented than in recent years, are unlikely to increase greatly. Moreover, growth on South Africa's principal markets (China, EU), is expected to be moderate. The slight increase in the oil price and the increase, though modest, in consumption, are likely to push up imports and contribute to the deterioration of the balance of payments.
A large current account deficit, uncertainties over economic and political development and the prospect of the rise in US interest rates, is likely to maintain the downward pressure on the rand in 2017. Capital inflows are expected to remain very unstable and the exchange rate of the South African currency very volatile. The loss of “investment grade” could lead to a sizeable devaluation, especially as the central bank’s leeway for raising its key rate (7% since April 2016) is much reduced on account of the low growth rate.
The banking sector, well capitalised and little exposed to exchange rate risk, remains strong, with a low ratio of non-performing loans (around 3%). Credit risk could, nevertheless, increase in view of the impact of the economic slowdown on borrowers' creditworthiness.
Despite the ANC’s comfortable victory in the May 2014 elections, the country’s political and social evolution is still plagued by uncertainties. Jacob Zuma’s authority is increasingly contested, especially after accusations of the misappropriation of public funds and collusion with the business community. In view of his lack of legitimacy and growing dissension in the ranks of the ANC, Jacob Zuma could be forced to resign from the presidency of his party, at the end of 2017 convention. The persistent failure to respond to the people’s expectations on unemployment, poverty and corruption remains a source of social instability. Student protests which erupted in late 2016 bear witness to widespread discontent.
South Africa’s performances are satisfactory according to the World Bank’s governance indicators, but are on a deteriorating trend with regard the rule of law (86th in 2015, i.e. ten places lower in a year). Crime levels and corruption are also handicapping the business environment.