South Africa Economic Conditions

South Africa Economic Conditions

A fundamental factor in the modern economic growth of the country has been the rich endowment of subsoil resources. The mining activity began in the last decades of the nineteenth century, and drew a decisive boost from the production needs generated by the Second World War, which prompted Great Britain to stimulate the South African industrial apparatus. What attracted huge investments from the motherland, and subsequently from the United States, was above all the wide availability of very low-cost labor, with the consequent racial segmentation of the labor market sanctioned by the apartheid policy. Over the thirty-year period 1950-80, the economy grew at an average rate of 5% per year, driven by the increase in world demand for mineral products, and in particular for gold. But later the South African economy entered a phase of stagnation, caused both by the global economic situation (lower flows of foreign investments following the sanctions adopted by many financial and commercial partners, contraction in the prices of raw materials), and by internal structural events. (inflation, excessive weight of the public sector, low competitiveness of industrial products). After the abolition of the segregationist regime, political normalization created the conditions for a full realization of the country’s economic potential. Growth has resumed strength since 2004, taking advantage of the conditions of macroeconomic stability and the high prices of mineral raw materials. In the composition of the gross domestic product, agriculture has a very low weight (9%); the industrial sector competes with 26% and the tertiary sector with 65%. The average per capita income figure ($ 9,700, at purchasing power parity in 2007) camouflages serious, persistent imbalances in the distribution of wealth and access to services, which heavily penalize the black population.

Agriculture has at its disposal just over a tenth of the national surface, with arable and arborescent crops distributed above all in the southernmost section of the Cape region and in the humid lands of the eastern coast; grassland areas and pastures correspond to two thirds of the total land area. The availability of space suitable for agricultural and livestock activities is limited by the aridity and by the diffusion of soil erosion processes. The richest agricultural districts are the Mediterranean climate of the Cape region and the humid subtropical climate of the east coast. Around Cape Town the most characteristic products are vegetables, citrus fruits, fruit and grapes, the latter with both table and, increasingly internationally established, wine production: the South Africa is not afraid of competition from similar products from Mediterranean countries. The agricultural districts of the eastern coastal part of the Cape and Natal region specialize in the cultivation of tropical fruit (bananas, grapefruits, mangoes), sugar cane and tobacco. The crops in the driest areas of the highlands consist mainly of cereals: the most important is maize (12 million tonnes out of 3.3 million ha), which constitutes the basic food product of the African population; followed by wheat (2 million tonnes on 800,000 ha) and barley. In the primary sector, breeding is also of great importance, in particular that of wool sheep. The sheep, mostly of the Merino breed, find in the pastures of the internal plateaus suitable environmental conditions and very large spaces, and provide excellent raw material to the textile industry. Cattle are of less importance. The coastal waters of the Atlantic Ocean, crossed by the cold Benguela Current, are an exceptionally favorable environment for fishing. For South Africa 2009, please check

Mining activities contribute to forming 40% of the value of exports.  South Africa maintains the first place in the ranking of world gold producers (271 t in 2006, a quantity that is far from the levels reached in the 1970s: 1000 t / year). Diamond mining is also in decline: concentrated in a few large deposits (Kimberley, Pretoria, Jagersfontein, Koffiefontein) and in alluvial deposits along some rivers or in the beaches and shallow waters of the west coast, oscillates around a production of 8 million carats per year (between industrial gems and diamonds). The diminished importance of gold and diamonds has been accompanied by a progressive increase in the extraction of other mineral products. Among them are uranium, platinum, nickel, copper, vanadium, antimony, fluorite, chromium, manganese; the production of iron minerals and phosphates are also noteworthy. As far as energy sources are concerned, the South Africa is devoid of oil, but has huge reserves of coal, of which it is the sixth largest producer in the world, with 245 million tonnes in 2006.

The industry contributes to producing almost a third of the gross domestic product, fueling a substantial flow of exports. Of fundamental importance are the steel industry and metallurgy. The chemical industry is of particular importance, for the production of explosives used in mining activities, nitrogen fertilizers used in agriculture, as well as for the extraction of hydrocarbons from coal. The mechanical sector is solid and well articulated, but in the automotive, aeronautical and naval sectors it is largely represented by decentralized plants from foreign companies.

Internal transport is based on a very well distributed railway network (20,050 km, of which 8440 are electrified) and a good road network (275,000 km). Communications with foreign countries are served not only by international rail and road lines, but also by a very efficient airport system, headed by Johannesburg. Tourism is favored by the reversal of the seasons with respect to the northern hemisphere, by the attractions of the still well-preserved natural environments, by the efficiency and high level of the accommodation infrastructures and by the presence of a white community that still has strong ties and continuous relationships with European and North American countries: in 2006 7.8 million entries were registered.

The trade balance is active and sees in first place in exports the products of the subsoil and their derivatives, followed by the mechanical and chemical industries and by the products of the textile and agri-food industries; imports mainly concern machinery, means of transport, electrical equipment, chemicals and high-tech tools.

South Africa fishing

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