South Africa’s economy was looking up as the new president, Cyril Ramaphosa, came into office. However, week performances in the countries mining and industrial sectors have caused people to think that 2018’s first quarter wont be as strong as previously thought. Despite this, there has been economic upturn since the beginning of Ramaphosa’s reign with people hoping that he will bring business friendly policies and crackdown on corruption. South Africa's last president left the country in poor economic standing, but the new president has lead the country to the lowest inflation rate in years and is foreseen to make the growth rate improve to 2.0% in 2019.
The South African economy is in trouble. In 2017 there was an unexpected decrease in GDP which lead to a growth plan being put in place. Unfortunately, the growth plan is not expected to do much good for the troubled economy because it focuses greatly on having business equality between blacks and whites instead of the actual problem, a lack of education and businesses and high unemployment rates. In order to fix the economic problems the government will need to invest in better education and promote the creation of businesses. Although there is still foreign investment in South Africa, the next 10 years are looking bleak with expected drops in investment. The political instability has caused there to be worry about the safety of investing in South Africa.
Unemployment is a large problem in africa which leads to economic disparity. In South Africa 40% of unemployed people say that they have been unemployed for more than 3 years and 59% say they have never had a job. Coupled with the low education rates — an average of 13.9 percent of people have finished grade 12 — the low unemployment rate has a detrimental effect on the output of the country. The effects of low education are also large in an economy, it doesn't allow for people to get higher paying jobs and for the country to advance and urbanize quickly.
Tourism is a large part of many economies, especially for developing, emerging, and growing zones. Unfortunately for south africa, tourism has been decreasing since 2002. Domestic and foreign investment on tourism has decreased largely since 2002 which has had a large effect on the South African economy because in 2002 foreign visitor spending was around 40% of South Africa’s total consumer spending. Visitor exports have also gone down, but are projected to rise slowly, most likely in correlation with the election of the new president.
South Africa is a new and emerging economy. However, in recent years the economic growth has slowed to a meger 0.7%. This is due largely to a large unemployment rate, government corruption, and lack of stable power accessibility. Unemployment rate is large with young black kids who are often poorly educated. The government has focused on an inflation controlling policy, but still has accumulated a large amount of debt. A lack of cheap education, infrastructure, and other social programs has caused the economy to struggle, which causes less foreign investment.
The election of new president, Cyril Ramaphosa, gave hope to the people of South Africa. South Africa was in hard economic times during last president’s time in office with unemployment rates hovering around 27 percent during his reign. As soon as the last president stepped in the economy went down. Things are looking up with the new president. His first economic change as president was the budget, which was crucial for stabilizing the economy.