Historically, South Africa’s wealth came from agriculture and mining, but in more recent years, the axis has tilted slightly and wholesale and retail trade, communications, technology, and tourism are growing sectors. Tourism has not yet recovered from the damage it suffered from the COVID-19 pandemic, but it is making tentative steps in the right direction.
Mining
You cannot talk about burgeoning industries in South Africa and not talk about mining. The mining sector contributed over ten billion US dollars to the country’s GDP in 2023, but it was actually down on 2022 – but by less than one per cent. However, the continued strength in this sector will come from the transition to green energy. With increasing pressures for industry to divest from coal, the mining sector could be in trouble, but fortunately, South Africa has another trump card up its sleeve. It has the largest manganese reserves in the world, and this mineral is essential in the wind and solar energy sector.
Agriculture
Around ten per cent of South Africa’s total export earnings come from the agricultural sector. In 2021, it contributed around twelve billion US dollars. The climate allows for the production of all major grains, sugar, citrus, oilseeds and subtropical fruits. There is a well-developed livestock industry that includes dairy, cattle, pigs, sheep, poultry, and ostriches. South African ostrich farming has really taken off; the country is the world’s largest supplier of ostrich products. Ostrich meat is considered healthier than beef, has more protein per serving and is lower in calories and fat, making it an increasingly popular alternative. Processed meat products such as biltong and sausages are also produced and consumed.
Technology
Ostrich farming might be emerging as an important part of the South African economy, but tech is one of the fastest-growing sectors. ICT beats agriculture as one of the fastest-growing industries in South Africa. The cell phone market is growing at 50% annually, making it the fourth fastest-growing in the world. There are opportunities in security systems, software development for the financial, banking, gambling and gaming sectors, silicon processing and manufacturing of fibre optics, integrated circuits and solar power cells. This is not something that has happened by accident. By 2030, the government has a target of having one million people trained to work in areas including artificial intelligence, coding, cloud computing and robotics.
The South African government’s target is part of a commitment to a digital transformation that is essential if the country is going to be able to grow and thrive. In a country with between seven and eleven million ‘unemployed’ (depending on how the figures are reported), tech training for young people is essential. The South African economy has faltered badly, and GDP per capita is lower than it was in 2008, so investing in people who can benefit from predicted ICT market growth and drive technology forward makes sense. The hope is that those one million people will create a ripple effect in the labour market, create more jobs and support job growth across the population. If it works, steps like this and basic income grants could help to lift millions of South Africans out of poverty.
Gambling
Gambling has become an essential strand in South Africa’s economy, and the industry revenue is projected to reach over eight hundred million US dollars in 2024. With a growth rate of almost six per cent, it is expected that gambling will be worth more than one billion US dollars by 2024. The online sector has bolstered this industry, and the technology mentioned before is critical to the success of online gambling. Compared to other countries, penetration is still relatively low at 6% of the population, so there are massive growth opportunities for operators in this industry. Players can find comparisons by casino.org and other sites as a way to decide where they want to play and choose the sites that are best suited to them. As user numbers become even higher within South Africa, keeping the population abreast of where deserve their custom will be more important than ever, especially as it’s predicted that there will be 4.2 million players in the country by 2029.
Tourism
The Government considers tourism vitally crucial to the economy and it has been talked of as a sector that should be ‘nurtured and sustained’. As one of the world’s largest industries, It is regarded as a modern-day engine of growth for any economy going anywhere. Unfortunately for South Africa, despite having breathtaking scenery, fabulous beaches and some of the best safari opportunities, the country is beset with problems that deter some visitors. These include high crime rates, corruption and deteriorating infrastructure and roads.
However, while tourism has not returned to its pre-pandemic figures, the country attracted over eight and a half million visitors last year. Travel and tourism contributed over thirteen billion US dollars to South Africa’s gross domestic in 2021. This may sound impressive, but it is less than half of the value it added in 2019. Government statistics show that internal tourism has now recovered, but there is still a long way to go for international visitors. The figures in 2022 were up on 2021, and the country saw a three-fold increase in visitor numbers to just over seven million tourists. However, that is still less than half of non-resident visitors in 2019.
A turning point
Like many other countries, South Africa has struggled to return to growth after the pandemic, and many experts believe this is exacerbated by corruption and infrastructure failures. The IMF thinks that far-reaching reforms are required in the country to achieve inclusive, job-rich growth. The country’s energy supplies must be stabilized to encourage private sector investment, and structural problems in the labour market must be addressed.
