Estimates from the Department of Trade and Industry indicate that South Africa's economy has suffered losses of up to 850 billion rand ($46 billion) due to six consecutive shocks over the past three years.
- South Africa's economy has suffered losses of up to 850 billion rand ($46 billion) due to six consecutive shocks over the past three years.
- The shocks included the global pandemic, the worst civil unrest since apartheid in July 2021, the war in Ukraine.
- Despite this, the International Monetary Fund has projected that South Africa will become Africa’s biggest economy with a GDP of $373 billion.
Trade, Industry, and Competition Minister Ebrahim Patel revealed that between early 2020 and the third quarter of the following year, the economy was rocked by two global and four local crises in rapid succession.
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At the release of his department’s Industrial Policy & Strategy Review report, he estimated the cumulative output lost to the South African economy due to these crises to be between 650 billion rand and 850 billion rand, Bloomberg reported.
Challenges on all fronts
The shocks included the global pandemic, the worst civil unrest since apartheid in July 2021, the war in Ukraine, severe flooding in the eastern coastal province of KwaZulu-Natal in 2022, rolling blackouts (referred to locally as load-shedding), and logistics constraints.
The shocks arrived at a time when the economy was recuperating from a period of widespread corruption known as state capture during President Jacob Zuma’s tenure, which primarily affected state-owned companies like Eskom Holdings SOC Ltd. and Transnet SOC Ltd., as outlined in the report.
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The crises disrupted and redirected the trajectory of industrial policy, as outlined in the report. Had these crises not occurred and assuming that South Africa had maintained growth trends similar to those of the decade preceding the pandemic, the country's gross domestic product would have been between 3% and 5% larger in constant rand terms than its current level, according to the report.
Despite this, the economic growth rate has averaged 0.5% since 2020. The International Monetary Fund has also projected that South Africa, Africa’s most industrialised country, will become Africa’s biggest economy with a GDP of $373 billion—a position the IMF expects it to retain until 2027.
