Capital Pretoria
Currency South African Rand (ZAR)
Languages IsiZulu, IsiXhosa, Afrikaans, Sepedi, English, Setswana, Sesotho
Population 49004031 (July 2011 est.)
Total Area 1219090 sq. kms
GDP $524 billion (2010 est.)
GDP Growth Rate 2.8% (2010 est.)
GDP Per Capita $10,700 (2010 est.)

International Trade Useful Resources
Trade Blocks:
SADC
Major Exports:
gold, diamonds, platinum, other metals and minerals, machinery and equipment
Exports Value:
$85.83 billion (2010 est.)
Major Countries of Export:
China 10.3%, US 9.2%, Japan 7.6%, Germany 7%, UK 5.5%, Switzerland 4.7% (2009)
Major Imports:
machinery and equipment, chemicals, petroleum products, scientific instruments, foodstuffs
Imports Value:
$81.86 billion (2010 est.)
Major Countries of Import:
China 17.2%, Germany 11.2%, US 7.4%, Saudi Arabia 4.9%, Japan 4.7% (2009)
Market Intelligence
EEPC keeps on receiving market information on different countries through its overseas offices, embassies and other sources. These are usually published in the weekly bulletin of the council. South Africa has featured in these reports recently and the PDF files could be viewed.
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Trade Policy | Fiscal Burden | Government Intervention | Monetary Policy |
Foreign Investment | Banking & Finance | Wages & Prices | Property Rights | Regulations

The transition from white minority rule to democratic, nonracial government culminated in 1994 in the election of Nelson Mandela as South Africa’s first post-apartheid president. Thabo Mbeki succeeded Mandela in 1999 and was re-elected in 2004. Jacob Zuma was elected president in May 2009 by the newly elected National Assembly, which continues to be dominated by Mandela’s African National Congress. South Africa is the economic hub of Sub-Saharan Africa and one of the world’s largest producers and exporters of gold and platinum. Mining, services, manufacturing, and agriculture rival similar sectors in the developed world. However, poverty is widespread, and much of the population is poorly educated and lacks access to infrastructure and services. The government aims to increase farmland ownership by black South Africans to 30 percent by 2014, and its affirmative-action mandates threaten private property rights. Crime, HIV/AIDS, and high unemployment are ongoing concerns.

Trade Policy
South Africa’s weighted average tariff rate was 3.9 percent in 2009. South Africa is a member of the Southern African Customs Union, the world’s oldest customs union. Import and export restrictions including tariff rate quotas on agricultural and textile imports, services market barriers, import and export permit requirements, burdensome technical standards, preferential government procurement procedures, burdensome regulations and inefficient bureaucracy, weak enforcement of intellectual property rights, inconsistent customs administration, and the use of anti-dumping laws to limit imports add to the cost of trade. Fifteen points were deducted from South Africa’s trade freedom score to account for non-tariff barriers.

Fiscal Burden
 South Africa has a relatively high income tax rate and a moderate corporate tax rate. The top income tax rate is 40 percent, and the top corporate tax rate is 28 percent. Other taxes include a value-added tax (VAT), a property tax, a securities transfer tax, an inheritance tax, and a capital gains tax. In the most recent year, overall tax revenue as a percentage of GDP was 25.7 percent.

Government Intervention
 In the most recent year, total government expenditures, including consumption and transfer payments, held steady at 27.4 percent of GDP. The Department of Public Enterprises oversees eight major state-owned enterprises in the government-controlled diamond mining, telecommunications, defense, transportation, and utilities sectors.

Monetary Policy
 Inflation was high, averaging 8.2 percent between 2007 and 2009, but subsided to around 6 percent in 2010. Prices are generally set by the market, but the government controls the prices of petroleum products, coal, paraffin, and utilities. Prices are also influenced through regulation, state-owned enterprises, and support programs. Ten points were deducted from South Africa’s monetary freedom score to account for measures that distort domestic prices.

Foreign Investment
 Foreign and domestic investments are treated equally under the law, and foreign investment is permitted in most sectors of the economy. Foreign equity levels in most industries are not restricted. Non-transparent regulations, rigid labor laws, and crime are disincentives for investors. Residents and non-residents may establish foreign exchange accounts through authorized dealers, subject to government approval and quantity limits. Most purchases of foreign exchange, payments, capital transactions, and transfers are subject to restrictions, controls, and prior approval.

Banking & Finance
 South Africa’s financial sector accounts for about 20 percent of GDP. Consolidation has reduced the number of domestic banks to less than 40. Five large banks account for over 80 percent of operations. Through development banks, the state dominates financing of medium-term and long-term lending. There are many microfinance institutions, and many credit operations of poorer South Africans are outside of formal banks. Capital markets are well developed and centered around the Johannesburg Securities Exchange, which is one of the world’s 20 largest in terms of market capitalization. Due to its limited exposure to the high-risk securities or the complex instruments that triggered the global financial turmoil, the overall banking system has not been severely affected by the crisis.

Wages & Prices
 South Africa’s labor market is not conducive to dynamic employment growth. Existing labor regulations are not applied effectively, and the rigid labor market has contributed to persistently high unemployment rates.

Property Rights
 The threat of expropriation is low. The judiciary is independent, and contracts are generally secure, but the courts are slow, understaffed, underfunded, and overburdened. Optical disc piracy is substantial, and end-use piracy is not a crime. The courts impose undue burdens and costs on rights holders pursuing infringement cases. The Medicines Control Council is notoriously inefficient and tardy with approvals.

Regulation
Despite recent years’ reform measures, progress in diversification of South Africa’s economic base has been limited and uneven, indicating a need for regulatory changes that would encourage more dynamic private-sector development.