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Area and Population - 1,221,037 km2 in total and 1,214,470 km2 of land area (25th largest country in the world) Over 56 million people (24th most populous nation in the world) Multiethnic society with 11 official languages SOUTH AFRICA GDP GDP 420 416.6 397.39 400 380 366.06 360 349.9 USD Billion 340 312.8 320 300 2016 2010 2012 2014 SOURCE: WWW.TRADINGECONOMICS.COM WORLD BANK GROUP Population and GDP 2013 2014 2015 Population (million people) 53.2 54 54.9* GDP at current prices (US$ million) 366,236 350,082 323,809* GDP per capita (US$) 6,908 6,483 5,902* Real GDP growth (%) 2.2 1.5 2* Unemployment (%) 24.7 25.1 25.1* Inflation (%) +5.7 +6.1 +59 Exports of goods (US$ million) 95,957 91,130 49,2194 Export growth (%) -3.6 -5.03 -6.31 Imports of goods (US$ million) 103,496 99,900 51,433 Import growth (%) -0.6 -3.5 -10.6 Average exchange rate (ZAR:US$) 9.77 10.87 12.2 Source: IMF, World Bank, WTO, Statistics South Africa, South African Revenue Service (SARS), South African Reserve Bank "IMF estimates July 2015 Jan-July 2015 Background History G.D.P. The earliest written record of farming life in South Africa start slightly after 1500. In monetary terms, agriculture's share of the economy has long since been outstripped by those of the mining and secondary industries. Agriculture Industry Introduction To Agriculture Western Cape, South Africa Benefits Agriculture in South Africa contributes around 10% of formal employment. providing work for casual laborers. contributing around 2.6 percent of GDP for the nation. Moreover, it contribute overall GDP. Problems South Africa's food security is susceptible to drought EG. In 2015 South Africa experienced the worst drought in 30 years. losing 20% of its water in just one year Problems South Africa's food security is susceptible to drought EG. In 2015 South Africa experienced the worst drought in 30 years. losing 20% of its water in just one year im 2. Mining Industry South Africa's total reserves remain some of the world's most valuable, with an estimated worth of $2.5 trillion * With South Africa's economy built on gold and diamond mining The world's fifth-largest mining sector in terms of GDP value In 2009, the country's diamond industry was the fourth largest in the world * Diamond and gold discoveries played an important part in the growth of the economy A major producer of coal, manganese and chrome Background History "De Beers" : World's best diamond company, was first found in South Africa in the mid of 19th century. More than 250 million metric tons from 2010 to 2013 77% of South Africa's energy needs were provided by coal 250 South Africa is the fifth largest coal exporter in the world. 150 Therefore, it can provides energy by itself. Millions of Metric Tons Per Y Production -Exports 100 50 0 1980 1985 1990 1995 2000 2005 2010 2015 Benefit According to the South African Chamber of Mines in 2012: Mining industry 1. Creates one million jobs (500,000 direct and 500,000 indirect) 2. Accounts for about 18% of GDP 3. Accounts for 20% of investment 4. Attracts significant foreign savings (1.9 trillion Rand) Risks * Government of South Africa formed a small-scale mining policy * It is good in saving resources for future use The restricted mining raised up the price of raw material Manufacturing has been subjected to extremely high prices for raw material inputs * Manufacturers become uncompetitive internationally It will reduce the exports of manufacturing products ZAVAZAN 3. Service Industry Service Industry is an industry made up of companies that primarily earn revenue through providing intangible products and services. The Three major services in South Africa are banking and financial services, tourism and aviation services. Background History South Africa's key sectors: contribution to GDP growth in 2013 South Africa was known for its diamonds and other precious metals worldwide. 2.2% 10.8% 4.9% 5.4% 15.2% 1.8% 13.7% 3.0% Agriculture, forestry and fishing 2.2% Mining and quarrying 4.9% Manufacturing 15.2% Electricity, gas and water 1.8% Construction 3% Wholesale, retail and motor trade, catering and accommodation 12.5% Transport, storage, communication 9% Finance, real estate, business services 21.5% General government services 13.7% Personal services 5.4% Taxes less subsidies on products 10.8% Now, it transformed by agricultural and mining into service-based economies. 12.5% 9.0% 21.5% 1 11 In 2013, service sector accounted for about 40.6% of the GDP Benefits Accounted for about 62% of GDP I. * For Banking and Financial services, it has attracted a lot of banks and investments For Tourism, the number of tourists increased from 3 million to 6.4 million * For Aviation services, it is the world's third largest producer of light aircraft in 2006 Risks Economic instability Including exchange rate fluctuation. The unstable situation has increased concern about South Africa's economy, that means the main bank credit rating may be forced to cut, this will force them to reduce reserves and also the space of interest. Questions: 1. How to improve the GDP in South Africa? 1. What is the Competitive Advantage of South Africa"? 1. Suppose you have 10 million dollars, which industry would you like to invest