South Africa

The economy is expected to post modest but steady growth in 2012, though to what degree GDP will expand is partly dependent on three key issues: the country’s credit rating, how quickly the government can begin rolling out its high-profile infrastructure programme and how South Africa’s major export markets fare over the next 12 months.

The recent credit downgrade of five of South Africa’s largest domestic banks by one notch has prompted quizzical reactions from the government and local financial community, coming just as four of the banks announced improving earnings growth and a decline in bad debt.

South Africa’s government is stepping up efforts to revitalise the country’s manufacturing sector and create job opportunities deeper within the country’s interior, seeking to reverse a long-term decline in the sector and address regional disparities in employment and production.

With a slowdown in Europe and North America, which have provided the mainstay of South Africa’s inbound holidaymakers, the tourism sector is now looking to emerging African markets for new sources of leisure and business travellers.

South Africa is planning a major overhaul of its higher education system, with a greater emphasis given to vocational training as a means to bridge the skills gap in the national economy. The government aims to achieve a six-fold increase in the number of places available at colleges by 2030, although the financial and human resources needed for such an effort are sizeable.

Following the arrival of global giant Walmart, 2011 will no doubt prove to be a game changing year for the retail market in South Africa. While competition is set to intensify dramatically as a result, South African retailers are nonetheless benefitting from a robust domestic market, thanks in part to new revenue opportunities through private labelling, online commerce and loyalty schemes.