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<\/a><\/figure><\/div>\n\n\nAlthough economic policies shape a country’s economic course, impactful events cannot be ignored. For instance, South African growth averaged 4.7% in the 1950s following a post-war boom but only 0.2% in the first half of the 1990s due to political uncertainty.<\/p>\n\n\n\n
The second half of the 1990s saw growth recover to an average of 2.6% following an historic democratic transition, which marked an end to international sanctions and a return of business and investor confidence.<\/p>\n\n\n\n
“Sound macroeconomic policies (RDP and GEAR) contributed, focusing on raising fixed investment, keeping consumption at bay and lowering government debt.” <\/p>\n\n\n\n
“Internationally, the 1990s were marked by better prospects; inflation was under control, and the Cold War was over following the collapse of the Soviet Union in 1991. This opened a new era of international trade and cooperation.”<\/p>\n\n\n\n
“During the first decade of the new millennium, South Africa\u2019s GDP growth accelerated to an average of 3.6%. By the middle of the decade, growth reached a high of 5.6% (in 2006).” <\/p>\n\n\n\n
“However, part of this surge was fuelled by extremely low interest rates in the US, which resulted in a massive property bubble, followed by the Global Financial Crisis (GFC).” <\/p>\n\n\n\n
Following this, the decade ended with a contraction of 1.5% in 2009, with growth gradually slowing in the 2010s. <\/p>\n\n\n
<\/a>In addition, political chaos, mismanagement at SOEs, the increase in load shedding, and the rise of state capture all contributed to a deterioration in economic performance.<\/p>\n\n\n\n
“The government’s macroeconomic policies changed course towards more consumption and less fixed investment; average GDP growth in this decade fell to only 1.7% per year.” <\/p>\n\n\n\n
“The 2020s started on a difficult footing. The COVID-19 pandemic rapidly spread around the world, and governments all over closed borders and demanded that their citizens stay at home.” <\/p>\n\n\n\n
“As a result, South Africa’s GDP contracted by 6.2% in 2020. Though the economy partially recovered the following year, an acute shortage in electricity due to a faltering Eskom kept a lid
on growth.” <\/p>\n\n\n
<\/a><\/figure><\/div>\n\n\nSouth Africa vs the rest of the world <\/strong><\/p>\n\n\n\n Data on GDP per capita shows that South Africa is lagging behind the rest of the world in terms of income growth.<\/p>\n\n\n\n South Africa’s GDP per capita was R75,200, or US$13,200 (PPP, constant 2011 prices) in 2023.<\/p>\n\n\n\n This level is close to the world average of $11,600 and other emerging markets ($12,500). It is also far higher than the $4,000 seen in Sub-Saharan Africa.<\/p>\n\n\n\n “However, South Africa\u2019s growth performance over the past 30 years has lagged behind other regions and the global economy.” <\/p>\n\n\n\n “In 1993, South Africa\u2019s GDP per capita was $10,300, increasing by 29% over the following three “Globally, GDP per capita increased by 70% over the same period, while in Sub-Saharan Africa, it rose by 45%. Even in advanced economies (which have no catch-up potential), individual income levels improved by more, at 57%.” <\/p>\n\n\n
decades.”<\/p>\n\n\n\n