As the second largest economy in the African continent, South Africa
is an upper-middle income economy, as categorized by the World Bank.
The national economy contributes a hefty 35 percent
to the entire continent's gross domestic product.
After the termination of Apartheid, the South African economy has procured
numerous gains in terms of foreign exchange reserves, GDP, and more.
It majorly deals with the export of expensive metals such
as gold, diamond, and platinum along with other metals.
Economic operations began in the 17th – century with the colonial invasion
of the country; it marked the commencement of commercial agriculture.
With the advent of the British in the late 18th – century,
metals were discovered and industrialization began.
The South African economy has changed from a 20th – century primary and secondary
sector economic setup to a service-centred economy in the present context.
Diversified sectors like mining, food processing, manufacturing,
telecommunications, and more characterize the economy.
Three-fifth of the country's exports is its mining products due
to the heavy presence of minerals and metals in its lands.
Agricultural produce in terms of fruit, wool,
tobacco, sugar, and more also accounts for 2.6% GDP.
Strongholds of South African Economy
As a picturesque land and a popular tourist location, the
tourism industry is the source of 10.3% jobs in the economy.
The real estate and business service sectors contribute 22% of the GDP.
Automotive assembling and manufacturing account
for 12% of the exports with the presence
of production bases for major automakers like BMW, Daimler-Chrysler, Ford, Toyota.
With a well-established setup of industries, South Africa
is also the most industrialized economy in the continent.
In the 20-year period since 1996, the country's GDP has
multiplied thrice and stands at $400 billion today.
The beginning of the Economy
Dutch East India Company arrived in 1652 to create a formal economic
setup, followed by the arrival of the French and the Germans.
The British discovered diamonds and gold deposits in the 1870s leading to
the annexure of the land for the economic welfare of the colonialists.
Industrialization began and trade unions emerged in the country.
Apartheid came into existence with National Party's election victory in 1948.
The economy was closed and close to no
international trade took place in the country.
In 1994, African National Congress came into power and started the
work for economic restoration with the abolition of apartheid.
Period of 2000-Present
From 2000 onwards, President Thabo Mbeki introduced privatization and
relaxation in labor laws for increasing the flux foreign capital.
Growth rate enhanced by 2004 only to come down
due to the global recession of the late 2000s.
The recovery from the recession period is predominantly due
to the consumption growth in the public and private sectors.
Unemployment, inequality, and crime are some of the
principal problems for the South African economy today.
A dipping foreign exchange rate is also a major challenge for the country.
The rate of unemployment has recovered mildly from
26.7 percent in 2005 to 22.8 percent in 2015.