By Jeremy Stevens
Last month we pointed out South Africa’s less than enviable position on the so-called iPod Index, a rival economic indicator to the famed Big Mac Index, which assesses whether a currency is over or undervalued in the global context.
But if SA performed poorly there it is excelling elsewhere in the economic realm. This report from SouthAfrica.info provides an uplifting message about our standing as Africa’s economic powerhouse and one of the world’s most promising emerging markets. After the World Cup delirium, this kind of news enables us to keep celebrating.
The State of Things
South Africa is the economic powerhouse of Africa, with a gross domestic product (GDP) four times that of its southern African neighbours and comprising around 25% of the entire continent's GDP.
The country leads the continent in industrial output (40% of total output) and mineral production (45%) and generates most of Africa's electricity (over 50%).
Its major strengths include its physical and economic infrastructure, natural mineral and metal resources, a growing manufacturing sector, and strong growth potential in the tourism, higher value-added manufacturing and service industries.
South African banking regulations rank with the best in the world. The sector has long been rated among the top 10 globally. There are 55 locally controlled banks, 12 foreign-controlled banks and five mutual banks. Some of the world's leading institutions have announced their intention to enter the local banking sector through mergers and acquisitions.
The JSE Limited is the 18th largest exchange in the world by market capitalisation (some R3,3 trillion as of September 2005). The JSE's rules and their enforcement are based on global best practice, while the JSE's automated trading, settlement, transfer and registration systems are the equal of any in the world.
Four main metropolitan areas dominate economic activity within the country: Johannesburg and its surrounds (Gauteng province), the coastal Durban/Pinetown areas (KwaZulu-Natal), the Cape Peninsula (which includes Cape Town), and the Eastern Cape's Port Elizabeth/Uitenhage area.
The financial and industrial sectors are concentrated in Gauteng province, which on its own accounts for over 30% of the country's GDP.