Economic Analysis of South Africa

Economic Analysis of South Africa

GDP for the Years 2008-2011

GDP and growth rate The South African economy is primarily based on its well-spread infrastructural network. The post-apartheid economy has witnessed the emergence of information technology, agro-processing, and electronic industries. Among the other industries in South Africa, textiles, automobiles, and fertilizers are worth mentioning. Furthermore, the machinery and mining industries have also gained tremendous significance over the past few decades (Fingleton, 1998).

However, this economic growth has not been able to significantly reduce the country's endemic poverty. Economic growth in 2001 was hit by a global slowdown, with real GDP growth rate falling from 4.1% in 2000 to 2.7% in 2001. Although agriculture was particularly affected, the aftermath of economic recession was evident in all sectors. The outcome of slower economic growth and strained investor sentiments led the rand to depreciate by 26% with respect to the dollar in 2001. Subsequently, the currency appeared to be stable as a result of fresh capital inflows and the resilience of exporters which led to the restoration of investor confidence.

During 2002 and 2003, economic growth rebounded to 3.6% and 3.0% respectively as the rand appreciated significantly in response to favorable external conditions and improved investor confidence. Over the period 2004-08, real GDP grew at an annual average rate of 4.7%. This growth was broad-based, with the share of overall national income earned by the black population rising by more than 50% in 2005 from about 40% in 1996. South Africa's economy grew by 5.2% and 5.6% in 2006 and 2007, respectively, representing stable economic growth for the fourth consecutive year. The growth rate came down to 3.7% in 2008. The South African economy contracted with much lower prices and weaker external demand for the country's export of commodity, by 1.8% in 2009. However, a growth rate of 2.9% was recorded in 2010 and the economy is expected to expand further, reaching a growth rate of 4.4% by 2014 (Felipe, 1998).

Political Structure of the Government

South Africa's current government is headed by the president, National Assembly members elects the president. The president exercises substantial executive powers and serves as the commander-in-chief of the armed forces. Other constitutional responsibilities include assigning cabinet portfolios and signing bills into laws.

South Africa is a parliamentary democracy, multi-party where powers of constitution are shared between the parliament and the president . The bicameral parliament consists of two houses: the National Council of Provinces (NCOP), which is the lower house and the National Assembly, which is the upper house. The national Assembly has been given some particular tasks relating to monitory matters as they have control over the bill. Besides that both houses have responsibility of drafting constitution laws. is a 400-member house, members of which are elected from a list of proportional representation. The NCOP consists of 90 members, with 10 being selected from each province (Dixon, 1975).

The NCOP replaced the former senate as the second house of parliament and was created to give a ...