Slow growth makes South Africans poorer than global peers

South Africa’s sluggish economic growth since 2010 has left its citizens markedly poorer than the global average, according to Investec Wealth & Investment International.

In 2023, South Africa’s GDP per capita, adjusted for purchasing power parity, stood at $15,194, well below the global average of $22,850, Bloomberg reported.

Growth in Africa’s largest economy has been weighed down by persistent power outages, corruption, high crime rates, crumbling infrastructure, and foreign policy blunders.

These challenges have left South Africa’s economy about 37% smaller than it could have been if it had kept pace with its emerging market peers.

To catch up with the global average over the next decade, South Africa’s GDP per capita would need to grow at an annual rate of about 8%, according to Osagyefo Mazwai of Investec.

That figure is significantly higher than the 5.9% average growth rate seen in middle-income countries since 1991 and nearly double the global average of 4.4%, Investec noted.

The International Monetary Fund has revised its growth outlook for South Africa, projecting the economy will expand by just 1% in 2025, down from an earlier forecast of 1.5%. Investec expects a slightly lower 0.9% growth next year, with a gradual pickup to 3% by 2030.

To achieve faster growth, analysts say the country must accelerate policy implementation to restore business confidence.

According to data from the Bureau for Economic Research, business confidence has consistently remained below the 50-point threshold that signals economic expansion since the global financial crisis.