The index sasol gas measures the amount of human capital that a child born today can expect to attain by age 18, given the risks of poor health and poor education that prevail in the country where she lives. More than 10 million people have received COVID-19 Social Relief of Distress (SRD) grants to mitigate the socio-economic impact of the pandemic on unemployed and informal sector workers who were not otherwise eligible for social grants or unemployment insurance benefits. The operation was the first budget support South Africa has received from the World Bank during the country’s post-apartheid, democratic era. The coupon payments that are foregone are used to improve the management of the Addo Elephant National Park and Great Fish River Nature Reserve, both of which contain populations of black rhino, and to raise the benefits of their presence to local communities. Financing also supports local communities through the creation of conservation-related employment, such as park maintenance, rangers, monitors, gate guards, joint operations center staff, and project managers. This program has contributed to strengthening economic incentives, increasing the speed of starting a business, reforming infrastructure finance and fiscal management, and promoting inclusive urban development—with a focus on informal settlements.
Coronavirus (COVID- impact on businesses and government finances
As a result, IBRD lending to South Africa reached $1.9 billion in FY24.The nature of development financing utilized in https://personal.nedbank.co.za/ South Africa has also been changing. While initially focused on Knowledge Work (Analytics and Technical Assistance) and Development Policy Loans, it is slowly broadening with new investment projects and program-for-results recently approved or under development. In 2003, the government started taking climate change seriously with the release of the White Paper on Renewable Energy. The government started intentionally trying to increase the use of renewable energy while decreasing the use of dirty energy, such as coal. Protectionist trade policies, geopolitical tensions, and supply chain disruptions remain potential risks.
- In October 2023, the World Bank approved a $1 billion Development Policy Loan which endorses a significant and strategic response to South Africa’s ongoing energy crisis and supports the country’s goal of transitioning to a just and low-carbon economy.
- Our research further suggests that renewable energy policies, subsidies and programmes made some positive short-term impacts on economic growth, measured as gross domestic product.
- While the government’s infrastructure plans are extensive, structural challenges may pose obstacles to reaching this ambitious growth rate.
- FocusEconomics collects South African GDP projections for the next ten years from a panel of 27 analysts at the leading national, regional and global forecast institutions.
- This severe electricity shortfall disrupted economic activity and increased operating costs for businesses, many of which rely on costly diesel generators.
South Africa GDP: $1.275 trillion
Supported also by Switzerland’s State Secretariat for Economic Affairs, it is in line with South Africa’s National Development Plan and Integrated Urban Development Framework. Other structural challenges have also increased, including transport and logistics, which have deteriorated due to weak management of the state-owned enterprise Transnet, theft, and sabotage, constraining South Africa’s export capacity. With GDP growth struggling to surpass 1.5% in recent years, achieving the 3% target will require more than infrastructure spending. Structural challenges — from inefficiencies in SOEs to regulatory red tape — continue sasol fuel to hamper investor confidence. President Cyril Ramaphosa delivered his 2025 State of the Nation Address (SONA) against the backdrop of South Africa’s evolving political and economic realities. Addressing Parliament in Cape Town City Hall today, he outlined an ambitious framework for national renewal, emphasizing economic revitalization, infrastructure investment, and the country’s place in the shifting global order.
Key figures
However, experts believe that South Africa is better equipped to navigate these challenges due to its focus on structural reforms and proactive https://www.coronation.com/ fiscal measures. For example, the government has not taken renewables seriously enough to include them in the power grid. This has largely limited the use of renewable energy to private homes and businesses. Coal-fired electricity from the country’s power utility, Eskom, is still cheaper for households than leaving the grid and purchasing their own renewable energy infrastructure (solar energy systems). The government has not funded the infrastructure needed to unlock South Africa’s vast renewable energy potential.
Non-renewables, renewables and economic growth: what’s there to know?
Prior to this, electricity supply shortages had constrained South Africa’s growth for several years. Rolling scheduled power cuts (load shedding) started in 2007 and intensified from 2022. The cumulated duration of the outages due to rotational load shedding, each of which lasted 2 to 4 hours, was equivalent to 289 days in 2023, up from 157 in 2022 and 48 in 2021.
Why the South African Economy Looks Promising for 2025
South Africa’s economic prospects for 2025 are generating cautious optimism, as structural reforms, energy stability, and policy adjustments pave the way for potential recovery. Experts, business leaders, and economists have pointed to a combination of factors driving this momentum, with projections of stronger GDP growth and improved investor confidence. Our model shows that an increased supply and higher consumption of non-renewable energy causes long-term economic growth over year cycles. Following the May 2024 national elections, a Government of National Unity (GNU) was formed in June 2024, led by President Cyril Ramaphosa. It focuses on constitutionalism, economic recovery, workers’ rights, social protection, and equity.