South Africa GDP per Capita: Overview and Outlook

South Africa's GDP per capita is currently around USD 6,345, a figure that reflects its status as an upper-middle-income country.

South Africa's economic story since the end of apartheid has been one of initial promise followed by a long period of stagnation. In the early 2000s, the country benefited from prudent macroeconomic policies and the global commodity boom, which boosted its exports of platinum, gold, and coal, leading to a period of solid growth. From 2000 to 2011, GDP per capita nearly tripled.

However, since the 2008 Global Financial Crisis, the economy has struggled badly. Real GDP growth has been anaemic for over a decade, with GDP per capita stagnating or even declining in real terms. Coupled with a weaker currency and lower commodity prices following the end of the commodity boom, this meant that nominal GDP per capita (measured in USD terms) has tumbled over the last decade.

The country has been plagued by a series of deep-seated structural issues that have choked off investment and growth; the most severe of these is a crippling electricity crisis, with the failing state utility, Eskom, imposing years of rolling blackouts (load shedding) that have devastated economic activity. Beyond the energy crisis, the economy is hobbled by inefficient logistics at its state-run ports and railways, which hinder exports. The country also suffers from one of the world's highest rates of unemployment, inequality, and crime, all of which deter investment and constrain growth. Years of state capture and corruption during the Zuma presidency also severely damaged state institutions and investor confidence.

Per capita income is projected to rise incrementally year-on-year through the end of the decade. This outlook does not indicate a transformative breakout from the low-growth trap that has characterized the economy for more than a decade; such a breakout would require deep-seated structural reforms that don't appear forthcoming. In addition to weak underlying economic conditions, the expected depreciation of the rand in the coming years will be a further drag on nominal GDP per capita.

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South Africa's success (or lack of it) in tackling its many challenges will be key to the rate of real GDP growth. The most urgent priority is ending the electricity crisis. Beyond energy, there are also logistical bottlenecks, high crime and corruption to deal with. Moreover, as a major commodity exporter, fluctuations in prices of key commodity exports like platinum, gold, iron and coal will cause swings in nominal GDP.

South Africa GDP Per Capita Data