South Africa

Unsecured lending is on the rise in South Africa, sparking debate over whether the growth rate in this loan category should be reined in to avoid a potential credit bubble and protect vulnerable consumers from entering into a cycle of over-indebtedness.

The slow rollout of state infrastructure projects and subdued activity in the private sector is once again putting pressure on South Africa’s construction industry, prompting some firms to expand activity abroad by tapping into regional markets.

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.