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Country overview
South Africa is located on the southern tip of the African continent bordering both the Indian and Atlantic Oceans. South Africa surrounds Lesotho and it shares borders with Botswana, Namibia, and Zimbabwe to the north, and Mozambique and Eswatini which was Formerly Swaziland to the east. South Africa attained majority rule on 27 April 1994 after minority rule that followed the amalgamation of four British colonies: Cape Colony, Natal, Transvaal, and Orange Free State, and formed the Union of South Africa on 31 May 1910. It is the Parliamentary Republic with the President sitting as the Head of State and government. Its administrative capital is Pretoria, the legislative Capital is Cape Town and the judicial capital is Bloemfontein. It has an administrative structure divided into 9 provinces. It runs a Unicameral legislative system of government. South Africa’s main ethnic groups consist of black Africans, people of European ancestry, colored multiracial ethnic groups, and Indian or Asian ethnic groups.
There are 11 official languages including English language which is the main language of business. Christianity is a major religion. It has a mixed legal system of civil law influenced by the Roman-Dutch model, English common law, and customary law. It has an area size of 1.22 million square kilometers. South Africa is often referred to as the rainbow nation to describe the country’s multicultural diversity. South Africa has a highly developed economy and advanced infrastructure. It is the second biggest economy in Africa after Nigeria.
South Africa has an estimated population of 56.43 million comprising mostly of middle age population, those in the age bracket of 25 to 64 years make up about 49.2 percent of the population, younger age group less than 25 years make up about 44.7 percent of the population, and those above 65 years age group makes up about 6.1 percent of the population. The average population density is estimated at 49 inhabitants per kilometer square. In terms of human development indicators, it has a life expectancy of 66.2 years for Women and 63.4 years for Men. It achieved universal primary education with a 98.54 percent Primary enrolment rate in 2018 and an overall literacy level of 87.0 percent as of 2017.
South Africa is rich in natural resources and is the world’s biggest producer of gold, platinum, chrome, and manganese. It is the second largest palladium producer and the fourth largest producer of diamonds in the world. It produces 80 percent of the world’s platinum and has 60 percent of the world’s coal reserves. South Africa has diverse manufacturing industries and is a world leader in several specialized sectors, including railway rolling stock, synthetic fuels, mining equipment, and machinery. Agriculture contributes about 1.9 percent of the country’s GDP and employs 5 percent of the workforce, unlike other African countries where agriculture dominates the economy. South Africa’s agricultural sector is highly diversified and market-oriented and it is the world’s sixth largest producer of wine.
It has an advanced services sector, and a particular financial and healthy banking system. The service sector employs about 72 percent of the workforce and contributes 61 percent of the country’s GDP. South Africa is a popular tourist destination, and a substantial amount of revenue comes from tourism. The economy has grown at a decelerated rate in recent years as weak public accounts, state-owned enterprises, persistent labor market rigidities, and politicization of economic decision-making continue to constrain growth. Real GDP grew at an estimated 0.2 percent in 2019, down from 1.4 percent in 2018. It managed to achieve a modest compound GDP growth of 1.1 percent in the past 5 years. Its currency is South African Rand which is a free-floating currency. Main export includes diamonds, gold, platinum, machinery, and equipment, other metals and minerals, etc. Major imports include petroleum products, foodstuff, machinery and equipment, chemical, etc.
South Africa has a vibrant financial sector that promotes economic diversification and a well-functioning capital market. South Africa offers a combination of developed first-world economic infrastructure and favorable market access to global markets and the rest of Africa's market.
With the commencement of the African Continental Free Trade Area, which creates a single continental market for goods and services in Africa, South Africa is set to be the main beneficiary given its advance industrial base as new export markets are created for its goods. Key priority sectors that are being promoted by the country for investment according to the recently launched South African Economic Reconstruction and Recovery Plan include aggressive infrastructure investment, energy sufficiency, tourism sector growth, and development of a Green economy. Other sectors with investment opportunities include the manufacturing sector, mining sector which includes Gold, Platinum, Manganese, and Chromite, Service sector with Business process outsourcing, film, TV and documentaries, Aquaculture, Agro-processing, Forestry, Green Industries which include: Clean Energy, Waste economy, and Green transport, Advanced manufacturing like Fuel Cells, Pharmaceutical, Aerospace and Defense, Medical devices, Chemicals and Electronics, etc.
South Africa’s Top 10 Exports
The African continent’s southernmost country, the Republic of South Africa shipped 86.1 billion dollars worth of goods around the globe in 2020. That dollar amount reflects a 12.4 percent gain since 2016 but a minus 4.8 percent decline from 2019 to 2020.
Based on the average exchange rate for 2020, the South African rand depreciated by minus 11.9 percent against the US dollar since 2016 and declined by minus 13.9 percent from 2019 to 2020. South Africa’s weaker local currency makes its exports paid for in stronger US dollars relatively less expensive for international buyers.
South Africa’s biggest export products by value in 2020 were platinum, gold, iron, cars, and coal. In aggregate, those major exports accounted for 37.5 percent of overall export sales from South Africa. That percentage suggests a relatively diversified range of exported goods.
South Africa places number one for exporting platinum, ranks among the world-leading export nations for iron, and is a major competitor selling coal on international markets.
The latest available country-specific data shows that 60.8 percent of products exported from South Africa were bought by importers in China with 11.4 percent of the global total, the United States with 8.3 percent, Germany with 8.2 percent, the United Kingdom with 4.9 percent, Japan with 4.4 percent, the Netherlands with 3.8 percent, Botswana with 3.8 percent, India with 3.8 percent, Mozambique with 3.6 percent, Namibia with 3.1 percent, Belgium with 2.8 percent and Zimbabwe with 2.6 percent.
From a continental perspective, about 33.8 percent of South African exports by value were delivered to importers in Asia while 28.6 percent were sold to European countries. South Africa shipped another 25.2 percent worth of its goods to fellow African nations. Smaller percentages arrived in North America with 9.7 percent, Oceania with 1.1 percent led by Australia, and Latin America with 0.9 percent excluding Mexico but including the Caribbean.
Given South Africa’s population of 59.7 million people, its total of 86.1 billion dollars in 2020 exports translates to roughly 1,450 dollars for every resident in the relatively wealthy African nation.
The following export product groups represent the highest dollar value in South African global shipments during 2020. Also shown is the percentage share each export category represents in terms of overall exports from South Africa.
Gems, precious metals: 20 billion dollars or 23.3 percent of total exports
Ores, slag, ash: 12.8 billion dollars or 14.9 percent
Vehicles: 8.5 billion dollars or 9.8 percent
Mineral fuels including oil: 6.9 billion or 8 percent
Machinery including computers: 5 billion dollars or 5.8 percent
Iron, steel: 4 billion dollars or 4.6 percent
Fruits, nuts: 3.8 billion dollars or 4.4 percent
Aluminum: 1.6 billion dollars or 1.9 percent
Electrical machinery, equipment: 1.5 billion dollars or 1.8 percent
Other chemical goods: 1.5 billion dollars or 1.8 percent
South Africa’s top 10 exports accounted for over three quarters or 76.2 percent of the overall value of its global shipments.
Gems and precious metals were the fastest growers among the top 10 export categories, up by 30.4 percent year over year since 2019 led by greater international sales of platinum and gold. In second place for improving export sales was miscellaneous chemical goods which were up by 29.3 percent. South Africa’s shipments of fruits and nuts posted the third fastest gain in value up by 9.8 percent year over year.
The leading decliner among South Africa’s top 10 export categories was its exported vehicles via a minus 26.2 percent drop.
These 100 exported goods were worth a subtotal of 70.8 billion dollars or 82.2 percent by value of all products exported from South Africa during 2020.
In macroeconomic terms, South Africa’s total exported goods represent 12.1 percent of its overall Gross Domestic Product for 2020 which stood at 710.8 billion dollars in Purchasing Power Parity. That 12.1 percent for exports to overall GDP per PPP in 2020 compares to 11.2 percent one year earlier, seeming to indicate an increasing reliance on products sold on international markets for South Africa’s total economic performance.
Another key indicator of a country’s economic performance is its unemployment rate. South Africa’s unemployment rate was 30.8 percent in September 2020, up from an average of 27.855 percent in 2020 according to the International Monetary Fund.
South Africa’s Top 10 Imports
The Republic of South Africa imported 69 billion dollars worth of goods from around the globe in 2020. That dollar value reflects a minus 8.2 percent decrease over the 5 years starting in 2016 and a 21.8 percent decline from 2019 to 2020.
Based on the average exchange rate for 2020, the South African rand depreciated by minus 11.9 percent against the US dollar since 2016 and declined by minus 13.9 percent from 2019 to 2020. South Africa’s weaker local currency makes its imports paid for in stronger US dollars relatively more expensive when converted starting from the South African rand.
From a continental perspective, 46.4 percent of South Africa’s total imports by value in 2020 were purchased from Asian countries. European trade partners supplied 31 percent of imports bought by South Africa while about 10.8 percent worth originated from fellow African nations.
North American exporters accounted for 7.5 percent of South Africa’s imports, with 2.5 percent coming from Latin America excluding Mexico plus the Caribbean, and 1.3 percent shipped from Oceania led by Australia.
Given South Africa’s population of 59.7 million people, its total of 69 billion dollars in 2020 imports translates to roughly 1,200 dollars in yearly product demand from every person in the resources-rich South African country.
The following product groups represent the highest dollar value in South Africa’s import purchases during 2020. Also shown is the percentage share each product category represents in terms of overall imports into South Africa.
Mineral fuels including oil: 9.6 billion dollars accounting for 14 percent of total imports
Machinery including computers: 9.1 billion dollars accounting for 13.1 percent
Electrical machinery, and equipment: 7.1 billion dollars accounting for 10.3 percent
Vehicles: 4.4 billion dollars which is 6.4 percent of total imports.
Pharmaceuticals: 2.4 billion dollars accounting for 3.5 percent
Plastics, plastic articles: 2 billion dollars accounting for 3 percent
Optical, technical, medical apparatus: 1.9 billion dollars which is 2.8 percent.
Other chemical goods: 1.7 billion dollars accounting for 2.4 percent of total national imports.
Organic chemicals: 1.3 billion dollars which are 1.8 percent
Inorganic chemicals: 1.2 billion dollars which are 1.7 percent of South Africa's total imports.
South Africa’s top 10 imports accounted for almost three-fifths or 58.9 percent of the overall value of its product purchases from other countries.
The sole gain from 2019 to 2020 belongs to miscellaneous chemicals thanks to its 4.5 percent increase.
Leading the decliners among South Africa’s top 10 product categories were imported vehicles via a minus 37.1 percent drop. Other major declines were 34.7 percent for mineral fuels including oil, minus 19.2 percent for machinery including computers, and minus 18.3 percent for plastic materials and items made from plastic.
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