South Africa's economy grew by just 0.3 percent last year, official data showed Tuesday, as the country struggles with political infighting, high unemployment and weak mining and agriculture data. More than 20 years after the end of apartheid, about 35 percent of the labour force is unemployed or has given up looking for work, and South Africa remains beset by inequality.
The 0.3 growth in 2016 was a slowdown on 1.3 percent recorded in 2015. "The main contributors to increased economic activity in 2016 were finance, real estate and business services," Stats SA said its report. It added that the contribution to overall GDP made by mining, quarrying, agriculture, forestry and fishing all decreased in 2016. The fourth-quarter figures released on Tuesday showed that GDP contracted an annualised 0.3 percent in the quarter, with mining production dropping 11.5 percent.
Finance Minister Pravin Gordhan is widely seen as being at loggerheads with President Jacob Zuma. The ruling African National Congress (ANC) has been engulfed by friction between Zuma's plans for funding "radical economic transformation" and Gordhan's stand against graft and uncontrolled expenditure.
In last month's budget, Gordhan introduced a new higher rate of tax and said that the mining and manufacturing sectors lost 80,000 jobs in 2016. "Economic growth is slow, unemployment is far too high and many businesses and families are under stress," he said. He added that the GDP growth forecast for 2017 was 1.3 percent, while inflation stands above six percent. In December, South Africa - Africa's most industrialised country - escaped a ratings downgrade by Standard & Poor's, which kept the country's foreign currency debt one notch above junk status but with a negative outlook.
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