South Africa

Facing a slowdown in both international and domestic demand, combined with rising oil prices and airport fees and tariffs, carriers in South Africa are feeling the squeeze. With economies booming elsewhere in Africa, there is some optimism that new profitable routes could be established, but governments throughout the continent will need to further liberalise their skies to make this happen.

The government wants South Africa’s manufacturing industries to step up and play a greater role in the national economy by boosting employment and revenue while reducing dependence on the mining and service sectors. However, although some parts of the sector have shown a remarkable improvement in competitiveness, labour unrest and volatile export demand may limit a significant jump in growth over the short-term.

Many facets of South Africa’s domestic economy are considered two-tiered, with significant gaps between rich and poor in terms of spending power and access to essential services. One area where this divide is particularly illustrative is in the differing quality, capacity, and usage profile of the public and private health care systems.

South Africa’s economic performance is a mixed bag, depending on what sectors and what indicators are under scrutiny. The country, which accounts for roughly a quarter of Africa’s total GDP, has seen a rise in select industries, a drop in inflation, increased government spending and modest improvements in consumer sentiment, but is still grappling with labour unrest and underwhelming export demand.

Fears that the recent violence at mines in South Africa may push up borrowing costs and undercut investor confidence have been allayed, at least for the moment, with money flowing back into the country’s bond market. However, longer-term concerns over the local debt market remain.

In a bid to reduce the negative environmental externalities associated with heavy coal-fired electricity generation, South Africa is stepping up efforts to increase the role renewable energy plays in its increasingly overstretched electricity sector, pushing ahead with a series of programmes aimed at harnessing the nation’s vast alternative resources.