The economy was buoyed by the run up in global commodity prices but drought, a correction in commodity prices and the political uncertainty have stymied growth. The mining sector has suffered from resource nationalism, , a growing trend across Africa. Ongoing uncertainty, combined with volatile commodity prices, have deterred investment and seen over 55,000 mining jobs shed over the past three years.
The resignation of President Jacob Zuma in early 2018 and the handover of power to Cyril Ramaphosa, who is focused on stimulating the economy and improving policy certainty, is a positive development. But issues around land reform, labour laws and income inequality will likely continue to frustrate investment.
The future is buoyed by favourable demographics as South Africa’s youthful population and regional importance bode well for the long term outlook, even in the face of a declining birth rate. It also has better infrastructure than most other African countries. Still, large external imbalances, lack of critical infrastructure, heavy reliance on commodities and a history of
race-based policies pose downside risks.