South African Economic Outlook

Illegal mining, usually conducted by “zama zamas,” takes place in provinces rich in gold, such as Gauteng and the Free State but extends to other minerals like diamonds and platinum. Mining in abandoned or unregulated shafts, these miners extract resources without permits, costing the country billions annually. According to the Department of Mineral Resources and Energy, illegal mining accounts for up to 30% of South Africa’s gold production, with financial losses exceeding R14 billion annually.

South Africa’s Economy In 2025: Uncertainty In A Pivotal Year

• The flywheel of lower inflation, lower interest rates, better electricity availability and the government of national unity drives confidence for both businesses and consumers.
• Economic policy became the subject of ongoing debate between those favoring market forces and the advocates of substantial state intervention; still others favored an export-led or inward-looking industrial policy.
• Not uncommon in Africa, gender equality seems to be a very cogent problem in the South African workforce.
• However, Blackmore points out, this is still below what is required to make a meaningful impact on economic inclusion to absorb a significant proportion of the unemployed into the labour market.

The flywheel of lower inflation, sasol south africa lower interest rates, better electricity availability and the government of national unity drives confidence for both businesses and consumers. It produces a significant portion of exports and contributes greatly to the domestic economy, especially as an employer, though land and water resources are generally poor. Arable land constitutes only slightly more than one-tenth of the country’s surface area, with well-watered, fertile soils existing primarily in the Western Cape river valleys and on the KwaZulu-Natal coast. The Highveld of Mpumalanga and Free State historically has offered adequate conditions for extensive cereal cultivation based on substantial government extension services and subsidies to white farm owners. Some dry areas, such as in the Fish River valley of Eastern Cape province, have become productive through the use of irrigation.

Africa’s Pulse

Machinery and transportation equipment make up more than one-third of the value of the country’s imports. Mining has been the main driving force behind the history and development of Africa’s most advanced economy. Large-scale and profitable mining started with the discovery of a diamond on the banks of the Orange River in 1867 by Erasmus Jacobs and the subsequent discovery and exploitation of the Kimberley pipes a few years later.

Navigating Challenges and Opportunities

Moreover, in recent years, the country has suffered from frequent power disruptions and rolling electricity blackouts (known locally as load shedding), which have weighed on economic activity. The South African economy https://tradingview.com remains under pressure going into 2024, mainly due to supply-side constraints in the electricity and logistics sectors. The economy only posted 0.3% year-on-year growth over the first three quarters, including a decrease of 0.2% year-on-year in the third quarter of 2023. Outlooks for 2024 and beyond have also moderated and are dependent on the (historically slow) speed of structural reforms, largely to address record levels of load shedding experienced during 2023. Historically, the stated policy of the African National Congress (ANC), which took power in 1994, was that it would seek a state-led mixed economy based on nationalized mining and financial enterprises; since taking leadership of the government, it has in fact pursued privatization of a substantial number of formerly state-owned enterprises.

Its decarbonization and adaptation must be people-centered, creating jobs and protecting the poorest in the most unequal society in the world (a “just transition”), to build the necessary broad support in favor of reforms. Furthermore, climate engagement was built in as a key component of policy lending, with climate-related prior actions in the South Africa COVID-19 Response Development https://istorepreowned.co.za Policy Operation as well as South Africa Sustainable and Low-Carbon Energy Transition Development Policy Loan II. A 100MWh Battery Energy Storage System (Hex BESS) was commissioned in November 2023 under the Eskom Renewables Support Program, the first and largest of its kind in Africa.

SA economy expected to improve in 2025, but geopolitical risks remain

The forest industry supplies mining timber, pulpwood for paper and board mills, and building timbers mostly sufficient for a construction industry that primarily uses brick, concrete, and steel. The principal shoal-fishing catches are pilchard and maasbanker, while offshore trawling brings in kingklip, Agulhas sole, Cape hake, and kabeljou, among others. This program has contributed to strengthening economic incentives, increasing the speed of starting a business, reforming infrastructure finance and fiscal management, and promoting inclusive urban development—with a focus on informal settlements.

The government faces competing demands—to improve the living conditions of the impoverished Black population while also addressing the demands for economic liberalization from business interests and Western governments. It has chosen to make maintaining business confidence and boosting investment the core element of its economic policy. The South Africa Financial Sector Development Program is a Bank technical assistance program, launched in September 2018, with support from the Swiss State Secretariat for Economic Affairs. Following the May 2024 national elections, a Government of National Unity (GNU) was formed in June 2024, led by President Cyril Ramaphosa. It focuses on constitutionalism, economic recovery, workers’ rights, social protection, and equity. The GNU brings together 11 political parties in a power-sharing agreement and aims to rebuild South Africa’s economy through key reforms for faster growth, better service delivery, and job creation, marking a new direction for economic policy and implementation.

Postapartheid South Africa was then faced with the problem of integrating the previously disenfranchised and oppressed majority into the economy. In 1996 the government created a five-year plan—Growth, Employment, and Redistribution (GEAR)—that focused on privatization and the removal of exchange controls. GEAR was only moderately successful in achieving some of its goals but was hailed by some as laying an important foundation for future economic progress.

In this context, the COVID-19 Social Relief of Distress Grant, introduced in May 2020, was extended for another year until March 2025. sasol south africa Socio-economic challenges were further exacerbated by high fuel and food (bread and cereals) prices, which disproportionately affected the poor. Inflation averaged 6.0% in 2023 but stood at 9.3% for those at the bottom 20% of the income distribution. One of the most significant focus areas in the medium term will need to be investment in infrastructure to stimulate economic growth. This will require the government to enhance infrastructure delivery by upping both quantity and quality.

Private Equity: Income

In summary, while 2025 presents significant challenges for South Africa, there are also opportunities for growth and revitalisation. By navigating policy issues and fostering stability, the country can position itself for a more prosperous future. However, Blackmore points out, this is still below what is required to make a meaningful impact on economic inclusion to absorb a significant proportion of the unemployed into the labour market. However, he says the US election outcome somewhat dampened his previous view of a much stronger Rand exchange rate, although he still expects the Rand to strengthen from current oversold levels. He says the Rand is unlikely to weaken significantly from current levels, with the base case expectation being that the Rand-/dollar exchange rate will be more stable in 2025. The global base case suggests a Brent oil price of around $65 – $70 per barrel for 2025, while he expects food inflation to drift up slowly during the first https://deriv.com half of the year before accelerating somewhat in the second half to reach 6% by the end of 2025 from the current 1.6%.