What Type of Economy Does South Africa Have?
South Africa has an emerging market economy built primarily around the tertiary, or service, sector. Since being freed from international sanctions in 1993, South Africa has developed the second largest economy in Africa, and it is responsible for nearly a quarter of the GDP of the continent. It is ranked as an upper-middle income economy by the World Bank.
In 2012, the nation enjoyed a gross domestic product of $390 billion, a figure that has more than tripled since the early 1990s. This growth has been supported by economically liberal policies that emphasize free trade in the global marketplace while discouraging domestic labor rights. Although the majority of its economic production comes from the service industry, particularly tourism and telecommunications, South Africa also benefits from manufacturing, agriculture and natural resource mining. South Africa’s main trade partners include the United States, Germany, China, Japan and India.
South Africa’s economic growth appears less impressive when weighed against the growth of its population. The nation’s per-capita GDP growth rate lagged well behind the global average during the first decade of the 2000s. As a result, while the South African economy is relatively productive, it experiences a high level of wealth inequality. The nation’s unemployment rate has stabilized well above 20 percent throughout the start of the 21st century. Also, disproportionately high levels of poverty persist among black Africans by a wide margin.