South Africa is Africa's largest economy. Cyril Ramaphosa is its president. On average, individual South Africans are poorer today than they were in 2015. The jobless rate stands at 32%, one of the highest in the world.
South Africa's liberalisation of state-owned enterprises is attracting investment in its power and other industries. In 2025 several African stockmarkets, including South Africa's, the continent's largest, recorded record highs. South Africa made changes to pension regulation (similar to those Ghana later adopted) to channel more domestic savings into private equity and venture capital on the continent. Prudent policies helped bring inflation down to 3.2% in 2025, lower than at any point in the past 21 years, and earned the country its first sovereign-debt upgrade in nearly 20 years from S&P, a credit-rating agency, in November 2025. In 2025 the country recorded consecutive fiscal surpluses for the first time in 15 years.
Operation Vulindlela, a reform task force set up by Ramaphosa in 2020 with the support of organised business, has opened state-owned firms to market forces. Economists from Harvard University ascribed around 40% of South Africa's underperformance since 2008 to the failure of utilities. Under better managers Eskom, the electricity utility, cut the number of days with blackouts from 284 in 2023 to just eight in 2025. Since 2023 generating plants of any size can be built without a licence. A new independent transmission company means electricity will soon be traded on an open market. Developers are considering around 220GW of potential renewables and battery-storage projects, about four times Eskom's installed capacity.
Transnet, a state-run firm whose mismanagement of ports and freight rail has crimped exports, is on a similar track. In December 2025 it struck its first deal to privatise a port, awarding a 25-year concession to a Philippine firm for the port of Durban, the largest in sub-Saharan Africa. Some 11 private rail operators will soon have access to Transnet's hitherto monopolised freight routes. Spectrum auctions have improved mobile coverage and reduced data costs. A backlog of work visas has been mostly cleared. The Public Service Amendment Bill, once passed, should professionalise a civil service stuffed with ANC cadres.
The IMF does not expect growth to exceed 2% in the next five years. The most frequent complaint among chief executives is the extent of organised crime and its links to political elites. Laws that weaken property rights or require firms to meet racial targets continue to deter investment.
In February 2025 Trump issued an executive order suspending American aid to South Africa, including funding for HIV medications that keep millions alive. The order accused South Africa's government of fuelling violence against its white minority, condemned a new expropriation law that on paper allows land to be taken without compensation, and invited white South Africans—known as Afrikaners, of mostly Dutch, French and German descent—to apply for asylum in America; 59 have so far been granted refugee status. The order also called South Africa's foreign policies "aggressive" towards America and its allies, notably Israel, which South Africa has accused of genocide before the International Court of Justice. Trump has falsely called the situation facing white farmers a "genocide".
In May 2025 Ramaphosa visited the Oval Office to salvage economic ties. He had hoped to lobby for South Africa to remain in AGOA, America's duty-free trade deal with Africa. Trump ambushed him by dimming the lights to show footage of a radical opposition leader chanting anti-white slogans and baselessly claimed that officials in South Africa were saying "kill the farmer and take their land". South Africa sent just 13% of its exports to America in 2023, of which about a quarter were covered by AGOA. Business groups estimate that between 200,000 and 300,000 jobs depend on AGOA, mostly in carmaking and farming. The port city of Cape Town faces concentrated AGOA risks as a centre for exporting citrus fruit, wine and car engines. South Africa is also discussing chrome exports with American officials as part of a broader African scramble to placate Washington. It is a hub for minerals exports to China; together with oil-rich Angola and mineral-rich Congo, it accounts for most African exports to China.
In 2024 the ANC and the Democratic Alliance (DA) formed a Government of National Unity (GNU). The DA has gained in the polls since the formation of the coalition, while the ANC looks weaker than ever. Cyril Ramaphosa will step down as president before the next general election in 2029. It is no longer out of the question that the DA could win more votes than the ANC at that election.
Johannesburg, the country's commercial capital, suffers from chronic underinvestment. Power and water supplies are sporadic; potholes can be the size of craters. Property values have fallen in real terms since 2010. The ANC, which holds the mayoralty, is in third place behind the DA and UmKhonto we Sizwe, the party of former president Jacob Zuma. Helen Zille, the DA's chair, plans to run for mayor in 2026.
Black Economic Empowerment (BEE) is the most far-reaching state-sponsored attempt at racial redress in the world. Its origins lie in the transition from apartheid: some months after Nelson Mandela was released from prison in February 1990, he told businesses that South Africa must "deracialise the exercise of economic power". The ANC then favoured nationalising industries. To convince it of the merits of capitalism before the first all-race election in 1994, conglomerates that had prospered under apartheid proposed "empowerment deals" instead, selling discounted assets to members of the new elite—including Cyril Ramaphosa, today one of South Africa's richest men.
In the early 1990s six conglomerates accounted for 86% of the value of the Johannesburg Stock Exchange. What began as ad hoc inducements became law with the Broad Based Black Economic Empowerment Act of 2003. BEE requires firms, in effect, to have a minimum share of black investors, to hire and train black staff and to buy from black-owned suppliers. Firms are given points based on meeting criteria; those with a low score struggle to get state contracts and licences. Only firms with at least 50 employees have to adhere to racial quotas, so some companies forgo growth or split into smaller units to stay below the threshold. Post-apartheid laws oblige many foreign firms operating in South Africa to set up licensed local subsidiaries, then sell 30% stakes in them to black business interests. Several sectors have already reformed, allowing firms to invest in community projects and employ local suppliers rather than hand over ownership stakes. The government is asking regulators to allow Starlink, the satellite-internet arm of SpaceX owned by Elon Musk, to give free broadband to 5,000 rural schools instead of sharing ownership rights—responding to pressure from Musk, who says BEE laws are racist.
The main beneficiaries of BEE have been a tiny group of new Randlords. By one conservative estimate around 1trn rand (more than $50bn) has been transferred to fewer than 100 people, many of them returning again and again to strike BEE deals. Under the ANC, inequality between black South Africans has exploded: the top 10% of black earners have seen incomes more than triple, while those of the bottom 50% have fallen slightly, mostly because of high joblessness. Today 75% of senior managers in state employment are black (roughly in line with the 82% of the population that is black) versus 15% in the private sector. Meeting ownership requirements and paying extortionate transaction costs is an inefficient use of capital. De facto quotas reduce productivity. Forcing firms to buy from black suppliers, even if they are more expensive, squeezes profits; the state can spend 25% above cost if a good or service is from a black supplier. BEE is plagued by "inputitis", where points are given for spending, not results: firms can get points by paying for courses that are never completed, leading to a mini-industry of people enrolling in but never completing multiple vocational schemes known as "learnerships". Some firms try to get around BEE by "fronting"—duping a black South African to be their "BEE partner" on paper. The BEE regulator has received more than 1,300 complaints about fronting since 2017. Foreign firms can win exemptions from ownership rules through "equity equivalence" schemes—Microsoft, for example, funded local startups. Compliance costs are estimated at 145-290bn rand per year, or 2-4% of GDP. South Africa is last for "ease of doing business" on a list of 49 countries compiled by the World Bank. The rate at which firms enter and exit the market is a third of that of other middle-income states. BEE also discourages genuine black entrepreneurship and begets graft. The government has proposed a 100bn-rand state-run "transformation fund" paid for by a tax on firms.
In a large poll in 2025, 44% of South Africans wanted BEE to continue, 36% said it should end and 20% were unsure. Pluralities, including black South Africans, said that BEE reduces economic growth and is "outdated and divisive". About 80% believe governments should hire the best people and buy the cheapest goods, regardless of race. Trump cites BEE to justify 30% tariffs on South Africa.
South Africa passed a law allowing land to be taken without compensation. The law is a compromise that mirrors language in the constitution; radicals had wanted something harsher.
Having inconvenient people bumped off is disturbingly common in South Africa. What began as a way to settle drug disputes or turf wars between gangs has become a service industry with a varied customer base, targeting teachers, civil servants and politicians. An average of 72 people were killed every day in the country in 2024. Contract killings, though a small share of total murders, have risen sharply: at least ten a month by 2025, up from around four a month in the early 2010s. Hitmen are known as izinkabi in Zulu.
Around two-thirds of contract killings are linked to disputes over lucrative minibus routes, controlled by mafia-like networks, and other organised crime. About a quarter are politically motivated, often linked to rivalries within the African National Congress as candidates seek to eliminate rivals on election lists or gain control of municipal budgets. An assassination task force arrested 337 people since 2016, of whom 47 were members of the police; the task force was disbanded in 2025.
Gold was discovered in 1886 on the Witwatersrand, a ridge of rocky hills above what is now Johannesburg. The mining industry's demand for labour was initially met by forcing black Africans off their farms and underground, through punitive taxes and land seizures under the 1913 Natives Land Act, which would later become a cornerstone of apartheid. Mining companies recruited workers from neighbouring countries, especially Lesotho, housing them in prison-like compounds near the shafts. By some estimates, South Africa has contributed 40% of the gold ever mined.
In 1985 South Africa's gold mines employed more than 500,000 people. By 2022 that figure had fallen below 90,000 as deposits became harder to reach and mines closed. Many closed mines were never properly sealed. Mines are supposed to be "rehabilitated" after closure—headframes demolished, shafts plugged with concrete to a depth of ten metres or more—but this work was left incomplete across the country. Roads in Johannesburg have been sinking into the ground as illegal miners dig in tunnels below.
Illegal miners, known as "zama-zamas" ("the ones who try their luck"), moved into abandoned shafts as soon as mining companies moved out. In 2019 the Global Initiative against Transnational Organised Crime estimated there were 30,000 illegal miners in South Africa extracting about $1bn worth of gold annually. Government minister Gwede Mantashe said illicit trade in precious metals was worth 60bn rand ($3.3bn) in 2024. Many zama-zamas are unlawful migrants, often working under violent gangs from Lesotho—known as "famo gangs" after a genre of music combining poetic lyrics with concertinas and accordions—who control access to the shafts, force miners to pay exorbitant prices for food and equipment, and sometimes refuse to hoist a miner to the surface until he has found enough gold to pay off his debts.
In December 2023 the government launched a nationwide crackdown called Operation Vala Umgodi ("Close the Hole"), aiming to force miners to the surface by cutting off their supplies. At Buffelsfontein, a mine near Klerksdorp that opened in 1953, produced 2,200 tonnes of gold during its six decades of operation and closed in 2013 with 54 tonnes of reserves still underground, police blockaded hundreds of miners in the shaft. The miners were unable to reach an alternative exit. After months of starvation, 246 survivors were eventually rescued by a professional mining team in January 2025; 78 decomposing bodies were also retrieved, and at least 90 are known to have died. Most of the miners were migrants from Mozambique, Lesotho or Zimbabwe. Ramaphosa said nothing about the deaths. By late February 2025 the operation had arrested more than 18,000 suspects nationwide. The South African Human Rights Commission has launched an inquiry.
China long ago overtook America as South Africa's largest trading partner, with two-way trade growing 25-fold this century. South Africa exports mainly raw materials and minerals to China while importing manufactured and capital goods, running a trade deficit of $9.7bn in 2023. Because electricity is so expensive and unreliable, it is profitable to mine chromium ore in South Africa and ship it to China for smelting. Some 75% of foreign investment in South Africa comes from America, Britain and the EU. Diplomatically, South Africa has moved away from a tradition of non-aligned pragmatism and now often backs Chinese positions in BRICS, the G20, the UN and other forums, though a narrow majority of South Africans oppose anti-Western foreign policies aligned with China, Iran and Russia. Chinese diplomats have said they would like to do more with South Africa but find it over-regulated. Chinese firms operating there have been criticised for reluctance to transfer technologies and high-value skills, or to promote Africans to senior positions.
South Africa is the only one of 43 countries analysed by the Institute for Family Studies, an American think-tank, in which less than half of children live with both parents. Just 36% of children—and 31% of black children—live with their biological fathers, a ten-percentage-point decline since the end of white rule in the mid-1990s.
Under apartheid, black men were recruited from rural areas to work in mines and housed in all-male hostels, separated from their families. Desmond Tutu called apartheid "this cancer, eating away at the vitals of black family life" when accepting the Nobel Peace Prize in 1984. The overall unemployment rate has risen from 20% in 1994 to 33%, making it harder for men to fulfil the provider role that South African culture expects. Women's share in the labour force has risen from 40% to 55% since the end of apartheid, making it financially easier for women to live apart from their children's fathers.
Among black South Africans, who make up 82% of the population, extended families account for 66% of households, while just 21% are nuclear. Among whites the shares are reversed: 71% nuclear, 19% extended. Since 2010, more children have lived with an adult male other than their father—known as "social fathers"—than with their biological fathers.
The practice of lobola , or bride price, requires the man to pay a sum to the woman's family before marriage. Men who have a child out of wedlock must pay inhlawulo ("damages") before they gain parental rights.
South Africa offers cash grants for each new job created by BPO firms, part of a broader African push to attract outsourcing work. Solar electricity in the country costs about a quarter as much as coal, which makes up most of the energy mix.
Blessed is he who expects no gratitude, for he shall not be disappointed.