South Africa’s economy is far and away the largest on the African continent. It is also one of the most fluid, something which relaxation of exchange controls has assisted. The economy is based largely on mining and agriculture, with manufacturing playing a lesser role. There is also a world-class financial services sector.
South Africa’s main trading partners are China and the European Union.
The main resources mined in South Africa are coal, gold, platinum, and uranium. A large amount of coal is used domestically to generate electricity (there is estimated to be another 200 years’ worth of coal still in the ground), while gold and platinum are so important to the economy that they have their own indices on the stock exchange. Diamonds are also mined, but because their sale and distribution is controlled by a global corporate monopoly, they are not as influential in the country’s economy.
In the agricultural sector, there are various crops which are grown for export, including fruit and wine. Domestic consumption centres on maize (corn), which is, of course, traded as an international commodity at international prices. However, because maize is a staple component of the diet of many people in South Africa, its retail price is greatly reduced by a generous government subsidy.
South Africa relies on imports of crude oil, although petrol is also produced from coal locally using solid-to-liquid technology in a massive plant situated in the north of the country.
The key government approach to the economy is based on inflation targeting, which is achieved by adjusting the prime lending rate. Inflation was relatively high towards the end of apartheid, a situation exacerbated by a growing current account deficit and international sanctions. Since the end of apartheid (which made very little sense economically), the situation has improved to the extent that the deficit has been eliminated and the economy has started to grow. Inflation has also fallen into single figures.
Money Transfers to and from South Africa - here's how:
- Foreign exchange regulations in South Africa 03-01-2011
- Essential money transfer advice for all transactions 02-01-2011
- Exchange control relaxed in South Africa 28-10-2010