| SOUTH AFRICA |
Economy:
South Africa is a middle-income, emerging market with an abundant supply of natural
resources; well-developed financial, legal, communications, energy, and transport sectors;
a stock exchange that is the 18th largest in the world; and modern infrastructure
supporting a relatively efficient distribution of goods to major urban centers throughout the
region. At the end of 2007, South Africa began to experience an electricity crisis. State
power supplier Eskom encountered problems with aged plants, necessitating "load-
shedding" cuts to residents and businesses in the major cities. Growth was robust from
2004 to 2007 as South Africa reaped the benefits of macroeconomic stability and a global
commodities boom, but began to slow in the second half of 2007 due to the electricity crisis
and the subsequent global financial crisis' impact on commodity prices and demand. GDP
fell nearly 2% in 2009. Unemployment remains high and outdated infrastructure has
constrained growth. Daunting economic problems remain from the apartheid era -
especially poverty, lack of economic empowerment among the disadvantaged groups, and
a shortage of public transportation. South Africa's former economic policy was fiscally
conservative, focusing on controlling inflation, and attaining a budget surplus. The current
government largely follows the same prudent policies, but must contend with the impact of
the global crisis and is facing growing pressure from special interest groups to use state-
owned enterprises to deliver basic services to low-income areas and to increase job
growth. More than a quarter of South Africa's population currently receives social grants.
GDP (purchasing power parity):
$524 billion (2010 est.)
country comparison to the world: 26
$509.8 billion (2009 est.)
$518.5 billion (2008 est.)
note: data are in 2010 US dollars
GDP (official exchange rate):
$357.3 billion (2010 est.)
GDP - real growth rate:
2.8% (2010 est.)
country comparison to the world: 128
-1.7% (2009 est.)
3.6% (2008 est.)
GDP - per capita (PPP):
$10,700 (2010 est.)
country comparison to the world: 104
$10,400 (2009 est.)
$10,600 (2008 est.)
note: data are in 2010 US dollars
GDP - composition by sector:
agriculture: 3%
industry: 31.2%
services: 65.8% (2010 est.)
Exports - commodities:
gold, diamonds, platinum, other metals and minerals, machinery and equipment
Exports - partners:
China 10.34%, US 9.19%, Japan 7.59%, Germany 7.01%, UK 5.54%, Switzerland 4.72%
(2009)
Imports - commodities:
machinery and equipment, chemicals, petroleum products, scientific instruments, foodstuffs
Imports - partners:
China 17.21%, Germany 11.24%, US 7.38%, Saudi Arabia 4.87%, Japan 4.67%, Iran
3.95% (2009)
Key Issues extracted from IMF Report - South Africa: 2011 Article IV
Consultation (August 2011)
Context:
The authorities face the dual challenge of sustaining the ongoing recovery while
rebuilding policy space, and raising potential growth and labor intensity of growth to help
reduce the extremely high levels of unemployment and inequality.
Growth prospects:
Growth should rise to 4 percent a year in 2011 and 2012, underpinned
by solid domestic demand.
Focus:
The discussions centered on the timing and strength of the required exit from
supportive policies in the context of large capital inflows. There was broad agreement that
barring a pronounced increase in core inflation or inflation expectations policy rate
increases could be put off given the still uneven nature of the recovery and the uncertain
global environment. Staff recommended stronger fiscal consolidation beyond the current
fiscal year than currently being considered, and rebalancing the composition of public
spending to help support higher potential growth.
Structural reforms:
Policies to moderate real wage growth and increase product market
competition will be critical to reverse the large job losses of recent years and make inroads
into reducing high structural unemployment.
Financial stability:
Banks have rebuilt their capital and liquidity cushions, but low credit
demand has lowered profitability. The main risks remain banks’ dependence on domestic
short-term wholesale deposits and high household indebtedness.
External vulnerability:
Relatively low public and external debts, mainly denominated in
domestic currency, and adequate international reserve coverage offset risks from currency
overvaluation and current account deficits funded by portfolio flows.
Click here to view full report
Banking
South Africa's well-developed banking system consists of three key elements:
- the South African Reserve
- Bank (the country's central bank),
- private sector banks (commercial banks, merchant banks, and general banks), and
- mutual banks.
South African banks hold the first six places among the top 100 banks on
the continent of Africa.
Four large banks dominate the South African banking landscape. Standard Bank of
South Africa, Nedcor, ABSA (Amalgamated Bank of South Africa, now owned by
Barclays PLC), and FirstRand Bank collectively account for around 85 percent of banking
services throughout South Africa. In total, there are approximately 70 foreign banks
operating in South Africa, either via representative offices, branches, subsidiaries or joint
ventures with local companies. International banks in the country have focused on
offshore lending where they have a competitive advantage as a result of their low
overheads and their ability to raise funds at comparatively favorable rates), as well as
treasury activities for corporate and clients and government.
All banks offer a comprehensive range of products and services through extensive branch
and electronic banking infrastructures, serve a wide customer base, and have the
characteristics of universal banks.
Based on population numbers, South Africa does not appear to be “over-banked,” as one
branch exists for approximately every 9,500 persons. However, a large portion of the
population does not have access to normal banking services and uses only a few
products. Many Black South Africans tend to save outside the formal banking sectors, and
choose to save in cooperative savings institutions called “stokvels.” Excluding the non-
banked segment of the population, it is estimated that there is one branch for every 3,200
persons. E-commerce financial services (i.e., banking and share dealing online) are doing
well in the local market, and it is projected that this segment will continue to rise.
Although the services sector has, in the past, focused on the mid- to high-income
population, government pressure, through the Financial Services Charter, as well as
demand from the lower-income population, has pushed the banks to join the smaller micro-
lenders. As a result, the banks are incorporating the lower end of the market into their
strategies, as well as developing BEE strategies into their business development plans.
Despite the global turmoil in the banking sector, the South African banking system
remained relatively stable and the South African Reserve Bank reported that banks were
adequately capitalized. South African banks are currently well capitalized, particularly
compared to their international counterparts. This is due, in part, to the Government’s
prudent measures and retention of exchange control. Overall, local banks are viewed to
be relatively stable and are unlikely to default any time soon. If any South African bank
was to default, it is likely that the government would intervene to help protect depositors.
Stock Exchange
South Africa boasts a sophisticated financial sector with well-developed financial
institutions and a stock exchange in Johannesburg, the Johannesburg Stock Exchange
(JSE) that ranks among the top exchanges in the world. Recently, South Africa has seen
rapid increases in both inbound and outbound Foreign Direct Investment (FDI).
South Africa is a middle-income, emerging market with an abundant supply of natural
resources; well-developed financial, legal, communications, energy, and transport sectors;
a stock exchange that is the 18th largest in the world; and modern infrastructure
supporting a relatively efficient distribution of goods to major urban centers throughout the
region. At the end of 2007, South Africa began to experience an electricity crisis. State
power supplier Eskom encountered problems with aged plants, necessitating "load-
shedding" cuts to residents and businesses in the major cities. Growth was robust from
2004 to 2007 as South Africa reaped the benefits of macroeconomic stability and a global
commodities boom, but began to slow in the second half of 2007 due to the electricity crisis
and the subsequent global financial crisis' impact on commodity prices and demand. GDP
fell nearly 2% in 2009. Unemployment remains high and outdated infrastructure has
constrained growth. Daunting economic problems remain from the apartheid era -
especially poverty, lack of economic empowerment among the disadvantaged groups, and
a shortage of public transportation. South Africa's former economic policy was fiscally
conservative, focusing on controlling inflation, and attaining a budget surplus. The current
government largely follows the same prudent policies, but must contend with the impact of
the global crisis and is facing growing pressure from special interest groups to use state-
owned enterprises to deliver basic services to low-income areas and to increase job
growth. More than a quarter of South Africa's population currently receives social grants.
GDP (purchasing power parity):
$524 billion (2010 est.)
country comparison to the world: 26
$509.8 billion (2009 est.)
$518.5 billion (2008 est.)
note: data are in 2010 US dollars
GDP (official exchange rate):
$357.3 billion (2010 est.)
GDP - real growth rate:
2.8% (2010 est.)
country comparison to the world: 128
-1.7% (2009 est.)
3.6% (2008 est.)
GDP - per capita (PPP):
$10,700 (2010 est.)
country comparison to the world: 104
$10,400 (2009 est.)
$10,600 (2008 est.)
note: data are in 2010 US dollars
GDP - composition by sector:
agriculture: 3%
industry: 31.2%
services: 65.8% (2010 est.)
Exports - commodities:
gold, diamonds, platinum, other metals and minerals, machinery and equipment
Exports - partners:
China 10.34%, US 9.19%, Japan 7.59%, Germany 7.01%, UK 5.54%, Switzerland 4.72%
(2009)
Imports - commodities:
machinery and equipment, chemicals, petroleum products, scientific instruments, foodstuffs
Imports - partners:
China 17.21%, Germany 11.24%, US 7.38%, Saudi Arabia 4.87%, Japan 4.67%, Iran
3.95% (2009)
Key Issues extracted from IMF Report - South Africa: 2011 Article IV
Consultation (August 2011)
Context:
The authorities face the dual challenge of sustaining the ongoing recovery while
rebuilding policy space, and raising potential growth and labor intensity of growth to help
reduce the extremely high levels of unemployment and inequality.
Growth prospects:
Growth should rise to 4 percent a year in 2011 and 2012, underpinned
by solid domestic demand.
Focus:
The discussions centered on the timing and strength of the required exit from
supportive policies in the context of large capital inflows. There was broad agreement that
barring a pronounced increase in core inflation or inflation expectations policy rate
increases could be put off given the still uneven nature of the recovery and the uncertain
global environment. Staff recommended stronger fiscal consolidation beyond the current
fiscal year than currently being considered, and rebalancing the composition of public
spending to help support higher potential growth.
Structural reforms:
Policies to moderate real wage growth and increase product market
competition will be critical to reverse the large job losses of recent years and make inroads
into reducing high structural unemployment.
Financial stability:
Banks have rebuilt their capital and liquidity cushions, but low credit
demand has lowered profitability. The main risks remain banks’ dependence on domestic
short-term wholesale deposits and high household indebtedness.
External vulnerability:
Relatively low public and external debts, mainly denominated in
domestic currency, and adequate international reserve coverage offset risks from currency
overvaluation and current account deficits funded by portfolio flows.
Click here to view full report
Banking
South Africa's well-developed banking system consists of three key elements:
- the South African Reserve
- Bank (the country's central bank),
- private sector banks (commercial banks, merchant banks, and general banks), and
- mutual banks.
South African banks hold the first six places among the top 100 banks on
the continent of Africa.
Four large banks dominate the South African banking landscape. Standard Bank of
South Africa, Nedcor, ABSA (Amalgamated Bank of South Africa, now owned by
Barclays PLC), and FirstRand Bank collectively account for around 85 percent of banking
services throughout South Africa. In total, there are approximately 70 foreign banks
operating in South Africa, either via representative offices, branches, subsidiaries or joint
ventures with local companies. International banks in the country have focused on
offshore lending where they have a competitive advantage as a result of their low
overheads and their ability to raise funds at comparatively favorable rates), as well as
treasury activities for corporate and clients and government.
All banks offer a comprehensive range of products and services through extensive branch
and electronic banking infrastructures, serve a wide customer base, and have the
characteristics of universal banks.
Based on population numbers, South Africa does not appear to be “over-banked,” as one
branch exists for approximately every 9,500 persons. However, a large portion of the
population does not have access to normal banking services and uses only a few
products. Many Black South Africans tend to save outside the formal banking sectors, and
choose to save in cooperative savings institutions called “stokvels.” Excluding the non-
banked segment of the population, it is estimated that there is one branch for every 3,200
persons. E-commerce financial services (i.e., banking and share dealing online) are doing
well in the local market, and it is projected that this segment will continue to rise.
Although the services sector has, in the past, focused on the mid- to high-income
population, government pressure, through the Financial Services Charter, as well as
demand from the lower-income population, has pushed the banks to join the smaller micro-
lenders. As a result, the banks are incorporating the lower end of the market into their
strategies, as well as developing BEE strategies into their business development plans.
Despite the global turmoil in the banking sector, the South African banking system
remained relatively stable and the South African Reserve Bank reported that banks were
adequately capitalized. South African banks are currently well capitalized, particularly
compared to their international counterparts. This is due, in part, to the Government’s
prudent measures and retention of exchange control. Overall, local banks are viewed to
be relatively stable and are unlikely to default any time soon. If any South African bank
was to default, it is likely that the government would intervene to help protect depositors.
Stock Exchange
South Africa boasts a sophisticated financial sector with well-developed financial
institutions and a stock exchange in Johannesburg, the Johannesburg Stock Exchange
(JSE) that ranks among the top exchanges in the world. Recently, South Africa has seen
rapid increases in both inbound and outbound Foreign Direct Investment (FDI).
Background:
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 (the Boers) trekked
north to found their own republics. The
discovery of diamonds (1867) and gold (1886)
spurred wealth and immigration and intensified
the subjugation of the native inhabitants. The
Boers resisted British encroachments but were
defeated in the Boer War (1899-1902);
however, the British and the Afrikaners, as the
Boers became known, 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 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 brought an end to
apartheid and ushered in majority rule under an
ANC-led government. South Africa since then
has struggled to address apartheid-era
imbalances in decent housing, education, and
health care. ANC infighting, which has grown in
recent years, came to a head in September
2008 when President Thabo MBEKI resigned,
and Kgalema MOTLANTHE, the party's
General-Secretary, succeeded him as interim
president. Jacob ZUMA became president after
the ANC won general elections in April 2009. In
January 2011, South Africa assumed a
nonpermanent seat on the UN Security Council
for the 2011-12 term.Government type:
republic
Capital:
name: Pretoria (administrative capital)
time difference: UTC+2
note: Cape Town (legislative capital);
Johannesburg(judicial capital)
Independence:
31 May 1910 (from UK); note - South Africa
became a republic in 1961 following an October
1960 referendum
National holiday:
Freedom Day, 27 April (1994)
Constitution:
10 December 1996; this new constitution was
certified by the Constitutional Court on 4
December 1996, was signed by then
President MANDELA on 10 December 1996,
and entered into effect on 3 February 1997; it is
being implemented in phases
Legal system:
based on Roman-Dutch law and English
common law
Suffrage:
18 years of age; universal
Government:
Chief of state: President Jacob ZUMA (since 9
May 2009); Executive Deputy President
Kgalema MOTLANTHE (since 11 May 2009);
note - the president is both the chief of state
and head of government
head of government: President Jacob ZUMA
(since 9 May 2009); Executive Deputy
President Kgalema MOTLANTHE (since 11 May
2009)
cabinet: Cabinet appointed by the president
elections: president elected by the National
Assembly for a five-year term (eligible for a
second term); election last held on 6 May 2009
(next to be held in 2014)
election results: Jacob ZUMA elected president;
National Assembly vote - Jacob ZUMA 277,
Mvume DANDALA 47, other 76
For names of current Ministers, click here.
Disputes - international:
South Africa has placed military along the
border to apprehend the thousands of
Zimbabweans fleeing economic dysfunction and
political persecution; as of January 2007, South
Africa also supports large numbers of refugees
and asylum seekers from the Democratic
Republic of the Congo (33,000), Somalia
(20,000), Burundi (6,500), and other states in
Africa (26,000); managed dispute with Namibia
over the location of the boundary in the Orange
River; in 2006, Swazi king advocates resort to
ICJ to claim parts of Mpumalanga and
KwaZulu-Natal from South Africa
All the information on this page sourced from
the CIA World Factbook, the US Commercial
Service and relevant FATF M.E.R.
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 (the Boers) trekked
north to found their own republics. The
discovery of diamonds (1867) and gold (1886)
spurred wealth and immigration and intensified
the subjugation of the native inhabitants. The
Boers resisted British encroachments but were
defeated in the Boer War (1899-1902);
however, the British and the Afrikaners, as the
Boers became known, 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 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 brought an end to
apartheid and ushered in majority rule under an
ANC-led government. South Africa since then
has struggled to address apartheid-era
imbalances in decent housing, education, and
health care. ANC infighting, which has grown in
recent years, came to a head in September
2008 when President Thabo MBEKI resigned,
and Kgalema MOTLANTHE, the party's
General-Secretary, succeeded him as interim
president. Jacob ZUMA became president after
the ANC won general elections in April 2009. In
January 2011, South Africa assumed a
nonpermanent seat on the UN Security Council
for the 2011-12 term.Government type:
republic
Capital:
name: Pretoria (administrative capital)
time difference: UTC+2
note: Cape Town (legislative capital);
Johannesburg(judicial capital)
Independence:
31 May 1910 (from UK); note - South Africa
became a republic in 1961 following an October
1960 referendum
National holiday:
Freedom Day, 27 April (1994)
Constitution:
10 December 1996; this new constitution was
certified by the Constitutional Court on 4
December 1996, was signed by then
President MANDELA on 10 December 1996,
and entered into effect on 3 February 1997; it is
being implemented in phases
Legal system:
based on Roman-Dutch law and English
common law
Suffrage:
18 years of age; universal
Government:
Chief of state: President Jacob ZUMA (since 9
May 2009); Executive Deputy President
Kgalema MOTLANTHE (since 11 May 2009);
note - the president is both the chief of state
and head of government
head of government: President Jacob ZUMA
(since 9 May 2009); Executive Deputy
President Kgalema MOTLANTHE (since 11 May
2009)
cabinet: Cabinet appointed by the president
elections: president elected by the National
Assembly for a five-year term (eligible for a
second term); election last held on 6 May 2009
(next to be held in 2014)
election results: Jacob ZUMA elected president;
National Assembly vote - Jacob ZUMA 277,
Mvume DANDALA 47, other 76
For names of current Ministers, click here.
Disputes - international:
South Africa has placed military along the
border to apprehend the thousands of
Zimbabweans fleeing economic dysfunction and
political persecution; as of January 2007, South
Africa also supports large numbers of refugees
and asylum seekers from the Democratic
Republic of the Congo (33,000), Somalia
(20,000), Burundi (6,500), and other states in
Africa (26,000); managed dispute with Namibia
over the location of the boundary in the Orange
River; in 2006, Swazi king advocates resort to
ICJ to claim parts of Mpumalanga and
KwaZulu-Natal from South Africa
All the information on this page sourced from
the CIA World Factbook, the US Commercial
Service and relevant FATF M.E.R.
| KnowYourCountry |
| Last Updated: 28 September 2011 |
|