Economy of South Africa

Since the landing of Jan van Riebeeck at the Cape of Good Hope in 1652, the economy in South Africa has progressed rapidly. The South Africa of today is a powerful engine for economic growth in southern Africa. The country’s sophisticated physical and financial infrastructure provides the ideal investment platform for entry into the markets of other African countries.

The industrialization of South Africa began with the discovery of gold in 1888 on the Witwatersrand and today the country has a modern well-diversified economy. The main contributing sectors are agriculture, manufacturing, mining, commerce, secondary industries and service industries. Although the mineral wealth contributes only 9 % to the gross domestic product (GDP), it is still the most important asset of the South African economy. Despite earlier political and labour problems, South Africa also has one of the most sophisticated manufacturing industries in Africa. Manufacturing and services together represent some 40% of the gross domestic product (GDP).

Agriculture
Over the years, South African farmers tamed the land and brought green life to the most unlikely areas. The complex climate of the country has led to a diverse agricultural sector.

Three quarters of the land is used for agriculture but only 12 % of the land is suitable for dry land crop production. Uneven rainfall is a potential problem and has caused farmers to become dependent on irrigation and today more than 1,2 million ha are under irrigation. The agricultural product that takes up the largest area of farmland is maize, followed by wheat, and on a smaller scale, oats, sugar cane and sunflowers. Over the last decade severe droughts have plagued the country and agricultural production went down.

As far as the production of most primary foods is concerned, the country is self-sufficient. South Africa is a well-known producer of deciduous fruit and there are very few fruits that are not grown here. Fruits are important export products. Another major crop are grapes from which world-renowned, award-winning wines are manufactured. The main breeds of sheep raised in South Africa are Merino, Dohne Merino, Dormer, Dorper and Karakul. Dairy and beef cattle breeding with breeds such as Afrikaner, Nguni, Drakensberger and Bonsmara is another successful South Africa industry.

Mineral Wealth
The unique and extensive geological formations in South Africa are the origins of its mineral wealth. The Witwatersrand Basin holds a considerable share of the world’s gold reserves, as well as some uranium, silver, pyrite and osmiridium. This basin yields some 98 per cent of South Africa’s gold. The Bushveld Complex in Mpumalanga and the Northern Province produces more than half of the world’s chrome ore. Ores of vanadium, iron, titanium, copper, nickel and fluorspar are also found here. South Africa also possesses some other important mineral reserves:

  • The Transvaal system contains more than 80 per cent of the world’s manganese reserves, as well as significant amounts of iron ore.
  • Mpumalanga and KwaZulu-Natal have significant coal and anthracite reserves.
  • The Phalaborwa Igneous Complex contains extensive deposits of copper, titanium, phosphate, iron, vermiculite and zirconium.
  • The Northern Cape has significant deposits of zinc ores, as well as copper and lead.
  • Diamonds (kimberlites, alluvial and marine), as well as titanium, iron and zircon are found all over the country. As a result of these mineral riches, South Africa is one of the world’s largest mineral producers. Most of these minerals are mined for the international market.