The economic landscape of South Africa

Free BEE Certificate: The economic landscape of South Africa

At the southern tip of the African continent lies a beautiful country with a rich and diversified economic landscape. South Africa has the second-largest economy in the continent next to Nigeria. 

Even if South Africa is the most diverse economy in the region, deep-rooted issues related to race politics from decades past can still affect business owners in the country. This is why a Free BEE Certificate can help your black-owned business flourish. 

Know more about the country’s market and what you can do to expand your business as you peruse the website of Free BEE Certificate!

South African economics: An overview

In the 19th century, South Africa’s economy changed due to the discovery of diamonds and gold. The state invested in this industry to further grow the economy of the country. 

Foreign investments soon followed the industry. This led to the economy’s growth boom right after World War II. South Africa continued to flourish. This developed a good manufacturing base for the mineral resources. 

The country’s growth rate even became one of the fastest developing economies in the world. However, since the ‘70s, South Africa has experienced economic problems due to Apartheid policies ingrained in the 20th-century culture. 

Apartheid politics explained

In a nutshell, Apartheid policies further divided the white and black citizens in the country. This divide focused on businesses and the country’s economic growth. 

Not only was segregation prominent in the political landscape but it was also affecting the economy of the country. The Apartheid policies are discriminating towards non-white citizens and have affected the country for decades. 

Population Segregation Act of 1950

Racial discrimination was further implemented when the Population Segregation Act of 1950 was implemented by the ruling class. This created the classification of South Africans into four different groups mainly:

  • Bantu – purely black Africans
  • Coloured – South Africans of mixed parentage (caucasian and black)
  • Asian – Immigrants from Indian and Pakistani lineage
  • White – Caucasians

This practise was widely accepted in the country before 1948 and policies expanded when the National Party was elected to office. These policies were later classified into the name Apartheid.

Furthering race segregation

The policies further expanded with the Prohibition of Mixed Marriage Act of 1949 and the Immorality Act of 1950. These laws prevented mixed-racial relationships among South Africans that made it difficult for them to be properly represented in government. 

Land Acts were also adopted by the country to prevent the black population from penetrating the caucasian upper class. These laws gave more than 80% of land and properties to the white citizens. 

The black population was also required to carry documentation so they’d be prevented from accessing exclusively white areas. For a black citizen to enter the area, they’d need to provide proper licenses and justification for their business. 

Jobs were also restricted to specific races, making it harder for the black population to penetrate the economic landscape. They were even banned from participating in the state government. 

Criticism of the racial segregation

The widespread Apartheid policies forced many black citizens to hold demonstrations and strikes to air their grievances to the state. Many white politicians also took the side of the suppressed citizens. 

Both the United Kingdom (UK) and United States (US) took part in dismantling the racial policies in the country. They withdrew economic support and imposed sanctions on South Africa in response to the rising Apartheid leaning government. 

This forced the country to relax the laws that solidified the disparity between races and ethnicities. 

Policy shifts and the Free BEE Certificate

It’s becoming clear that Apartheid politics are not helping the country flourish and that change is inevitable. Fundamental shifts are needed to bring the country back on track and the following events and political figures helped to further develop the nation.

F.W. de Klerk and Nelson Mandela

In the ‘90s, the shift in policies was started by then-President F.W de Klerk. During his term, he repealed most of the social acts that encouraged Apartheid policies. However, the segregation policies have deeply entrenched the culture and norms of the nation that made it hard for people to accept the new changes. 

By 1994, an all-race national election of South Africa led to the rise of a black majority coalition. This was led by Nelson Mandela, a prominent political figure that upheld anti-apartheid rhetoric. He also became the first black president of the country. 

From then on, legislated racial policies are slowly being detached from the state. The law is becoming more accepting of black power and equality among all races. However, unlearning segregation traditions proves challenging for the growing nation.

Black Economic Empowerment (BEE)

To create a more inclusive society, the BEE program was implemented to help marginalised groups including black and Asian communities. This improved their chances of landing good jobs and enhancing their skills to further penetrate the economic activities in South Africa. 

The Broad-Based Black Economic Empowerment Act of 2003 (BBBEE) also answered plenty of inequality issues based on gender and social classes. Slowly, the entire nation is progressing into a more diverse and culturally welcoming society that encourages progress. 

Getting a Free BEE Certificate also improved the chances of minority groups to be successful in business and economic activities. The state offers plenty of help, resources and opportunities for those who seek help through the BEE program. 

South African economic industries

The nation is teeming with active industries that contribute to the development of the economy. Many of South Africa’s policies concerning the economy are aimed at industrial self-sufficiency and sustainable growth. 

Below are the sectors in which the country gains its economic potential:

Agriculture, forestry and fishing

South Africa heavily relies on agriculture to churn the economy. This sector allows the nation to export resources to different countries, most especially in the west. Although land and water resources can be scarce in the region, the country manages to reap the benefits from proper irrigation processes and land cultivation. 

The major crops produced by South Africa are as follows:

  • Corn
  • Wheat
  • Sugarcane
  • Sorghum
  • Ground peanuts 
  • Citrus
  • Tobacco

The agriculture sector is also rich with the following animals raised for producing various products:

  • Sheep
  • Goat
  • Cattle
  • Pig
  • Lamb
  • Mutton
  • Goat
  • Chicken

Forestry and fishing aren’t as strong as agriculture when it comes to economic development but these two industries pull their weight towards monetary growth. These industries give adequate supply to support resources that the country needs. Although, most of these products are not exported due to local demand. 

Power and mineral resources

South Africa is rich in natural resources including minerals such as:

  • Gold
  • Diamonds
  • Iron ore
  • Platinum
  • Manganese
  • Chromium
  • Copper
  • Uranium
  • Silver 
  • Beryllium
  • Titanium
  • Coal

These resources supply most of the country’s demands and some are even exported abroad. The industry is not as big and competitive as the agricultural sector but it’s still a vital part of the country’s economy and growth. 

Several mining companies have invested large sums of money into the industry to further expand and develop the economy. However, some gold mines have permanently closed during the ‘90s due to dwindling resources. 

The electricity that powers the nation is sourced locally, mostly focusing on thermal energy. Coal supplies also generate power that the country needs. These are synthetic fuels that act as South Africa’s energy reserve for shortages and crises. 

A nuclear power plant is also contributing to the energy needs of the nation. It isn’t the main source of energy but it does provide additional reserves when shortages occur. 

Manufacturing

Other industries including agriculture, fisheries and forestry work hand in hand with the country’s manufacturing activities. Through the resources collected from different sectors, several products are made and exported to other countries. 

The manufacturing sector is comprised of the following:

  • Food processing 
  • Textile production
  • Metal production
  • Chemical formulations

This industry, however, mainly relies on foreign profit. Since the items are exported to other countries, the economy depends on global demand. The industry rapidly expanded in the 60s. 

Finance

Managing the economy and the nation’s fiat currency is the South African Reserve Bank. It is the sole authority for issuing Rand, the money that circulates in the country. Moreover, it has a direct influence on the economy given that the institution formulates and implements policies for monetary transactions. 

Aside from that, the finance sector also manages foreign exchange transactions of the country to further grow the economy.

Trade

Due to the trading industry’s influence on South Africa, the economy is sensitive to global conditions. This led the state to invest in various trading partners which include several countries such as:

  • China
  • US
  • Germany 
  • Japan

South Africa also dabbles in regional trade within the African continent to further expand its economic influence. Base metals, agricultural products and chemicals are some of the major commodities that are traded. 

Now that the Apartheid policies are abolished, further developments are eyed by the country. Know more about this as you browse through Free BEE Certificate. Create an account and be part of the growing discourse around this important issue.