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The South African
11-07-2025
- Business
- The South African
How poor are South Africans compared to the rest of the world?
South Africans are significantly poorer than the global average, and the gap continues to grow. According to BusinessTech and Investec Wealth & Investment International, the country's economic stagnation since 2010 has left its people trailing far behind the rest of the world. In 2023, South Africa's Gross Domestic Product (GDP) per capita, adjusted for purchasing power parity (PPP), was $15 194. The global average was $22 850. That's a vast difference of over $7 656 per person. This means that, on average, South Africans are producing and earning far less than the average person globally, about $7 656 (+/-R136 000) less in 2023. The turning point came in 2010, when South Africa's GDP per capita started falling behind global trends. 'You can see a decoupling of South Africa's gross domestic product per capita from the rest of the world in 2010,' Osagyefo Mazwai, an investment strategist at Investec Wealth & Investment International, said as per BusinessTech . Since then, the economy has been bogged down by a toxic mix of rolling power blackouts, corruption, high crime rates, collapsing infrastructure, and questionable foreign policy choices. These factors have combined to drag growth down to a crawl. According to Investec's analysis, the economy is 37% smaller than it could have been if it had kept pace with its emerging-market peers. To close the gap with the global average in the next decade, South Africa would need to grow its GDP per capita by 8% per year, not something easily attained, Mazwai said. That's well above the 5.9% average growth rate for middle-income countries since 1991, and nearly double the global average growth rate of 4.4%. 'You need to be exceptional in your GDP growth outcomes, and even in that environment, you only get back to the global average,' Mazwai added. Let us know by leaving a comment below, or send a WhatsApp to 060 011 021 1 Subscribe to The South African website's newsletters and follow us on WhatsApp, Facebook, X and Bluesky for the latest news.
IOL News
04-07-2025
- Business
- IOL News
How low business confidence affects South Africa's investment and job market
Investec says a stronger fiscal position would have had a positive impact on the broader population. Investec's data shows that, had growth averaged 4.5% since 2010, the unemployment rate would be significantly lower. Stronger business confidence could lead to more investment, better employment figures, and improved outcomes for both households and financial markets. Recent analysis from Investec Wealth & Investment shows that if South Africa's economy had grown in line with its emerging market peers, at 4.5% a year since 2010, nominal gross domestic product (GDP) would now be around R11.5 trillion. Currently, it is at R7.4 trillion, said Osagyefo Mazwai, investment strategist at Investec Wealth & Investment International, in a blog post. Under the higher growth scenario, the National Treasury could have collected a cumulative R5 trillion more in taxes. That would have gone some way toward funding services and reducing the debt-to-GDP ratio, said Mazwai. Investec says a stronger fiscal position would have had a positive impact on the broader population. Investec's data shows that growth has averaged 4.5% since 2010, and the unemployment rate would be significantly lower. GDP per capita, on a purchasing power parity-adjusted basis, would also be much higher. The analysis highlights several underlying drivers of growth, including business confidence, policy consistency, and structural reform. Mazwai points to a statement made by Reserve Bank Governor Lesetja Kganyago in 2019, stating: 'Restoring confidence is the cheapest form of stimulus.' Data from 1994 to 2024 shows a clear relationship between business confidence and economic performance. For example, real GDP growth averaged above 4% during former president Thabo Mbeki's second term, when business confidence was high. During the same period, the unemployment rate dropped from 28% in 2004 to 21% in 2008.
