South Africa Economic Sectors

South Africa Economic Sectors

Mining

Cullinan Premier Mine

Cullinan Premier Mine

Agriculture

In addition to mining, export-oriented agriculture plays a role in foreign trade. In particular, wine, fruit and vegetables from the Western Cape are among the export goods. Agriculture is also important for supplying its own population and as an employer. Most regions, however, are unsuitable for agricultural production due to poor soil quality and water scarcity. These problems escalated during the 2015-2017 climate change and El Nino-induced drought, and changes in subsequent years, also induced by climate change. This increases the complex difficulties in rural development. The permitted cultivation of GM maize as a staple food. The sugar tax that has been levied since 2018 is also controversial. Forestry, which only uses 1% of the country’s area, is economically less important in comparison. Inshore fishing, which is concentrated in certain ports, generates only a minimal proportion of the gross domestic product, but employs a large number of workers.

Agriculture - cattle farming

Agriculture – cattle farming

Wine farm in the Western Cape

Wine farm in the Western Cape

Processing industry

Cars in Johannesburg

Cars in Johannesburg

Like the mining and agriculture sectors, the manufacturing industry has had to face international competition and price pressures on the world market since 1994. The raw materials, capital goods and heavy industries gained importance. Before the 2010 soccer World Cup, the construction industry posted temporary growth rates, but there were also allegations of corruption due to the award of contracts.

The second largest industrial area is the automotive industry. BMW and VW have relocated part of their production to South Africa, a major country in African continent according to ehealthfacts. German car companies and around six hundred German companies are represented in South Africa, some for several decades – that is, during apartheid. Other important industrial sectors are: mechanical engineering, chemistry, information and communication technology, textiles and clothing.

Energy sector

Power grids in South Africa

Power grids in South Africa

The South African energy industry is changing rapidly. The more frequent power outages, around March and November 2019 and early 2020, have been causing problems for the South African economy for years. Personnel changes at the most important electricity supplier ESKOM are intended to help carry out restructuring and resolve the problems, as became known at the end of July 2019. For years, energy policy was geared on the one hand to coal and nuclear power, specifically also their expansion, and on the other hand to investments in renewable energies. There are competing expert opinions on this. Studies on the labor market potential in the field of renewable energies also relate, among other things, to the problematic labor market development in coal mining, a hotly contested issue from the point of view of individual trade unions. Government plans to further coal production, which also forms an important pillar of the export and use in coal-fired plants also encourages the World Bank in its ESKOM support financially are of environmental organizations critical comments. Also about opening up large ones natural gas deposits off South Africa’s coasts were controversial in March 2019. At the beginning of March 2020, the media discussed how the lower oil price is affecting the South African economy – with a view to the important transport sector, among other things.

Infrastructure

South Africa’s infrastructure is characterized by a modern transport sector, an available energy supply and a highly developed telecommunications system. Freight traffic is to be increasingly shifted from road to rail. The expansion of the transport system, which is very important in South Africa, would also be necessary in the neighboring countries in order to open up sales markets in Africa.

Tourism sector

Tourist tent accommodation

Tourist tent accommodation

A good infrastructure is essential for economically important tourism. It is one of the fastest growing industries in the country and a leader on the continent. The sector has made a significant contribution to GDP for years, by no means only in the context of the 2010 World Cup. Then the number of tourists was just under 10 million. According to Statistics South Africa, 797,181 tourists came to the country in February 2019, of which 169,025 were from Europe, 30,016 from North America and 25,890 from Asia. The number of German tourists in the month was 36,692. Around 7 percent of the workforce in South Africa is directly or indirectly in the tourism sector employed, some estimates even put the proportion of employees at over 10 percent, whereby direct and indirect employees are then included.

In 2002, the government presented guidelines for responsible tourism development that aim to better take local people into account when investing in tourism. With the Tourism Act of 2014, the government wants to promote sustainable tourism. One of the organizations committed to sustainable tourism is Fair Trade in Tourism. There are overviews with many addresses. In addition, various nature parks and coordination offices promote ecotourism as a form of sustainable tourism.

The South African tourism industry in particular advertises homosexuals as their own target group. The trendy bars, including in Cape Town, the gay pride demonstrations and film festivals, contrast with the homophobic hateful violence in some townships.