From the Council on Foreign Relations.
South Africa risks losing its stature as the economic leader in Africa to Nigeria if it doesn’t address issues of inequality and low competitiveness, according to a report by the Council on Foreign Relations.
Experts say in the report that nearly 20 years after the collapse of apartheid, South Africa is a pluralistic democracy with a robust free press, an independent judiciary and a commitment to the rule of law. Its mixed economy is the largest, and arguably least risky for investors in Africa with deep capital markets and highly developed financial services. Yet despite the great advances of the past 20 years, the economic circumstances of most South Africans are largely unchanged. Income inequality, a legacy of apartheid-era education policies, remains the greatest challenge facing South Africa today, according to the report.
South Africa risks getting left behind as growth in other African countries accelerates, some experts say. South Africa made up 50 percent of sub-Saharan Africa’s gross domestic product in 1994, the year of the first free election post apartheid, while today it makes up 35 percent. Nigeria poses the biggest threat to South Africa’s dominant economic position in Africa and its political weight in Africa and around the globe, says Gavin Keeton of Rhodes University in the report.
Nigeria’s economy grew by 7.3 percent in 2011, 6.3 percent in 2012, and is projected to grow more than 7 percent in 2013, the International Monetary Fund predicts. South Africa’s annual GDP growth was 2.5 percent in 2012, down from 3.1 percent in 2011, according to the World Bank.
Nigeria was included in Goldman Sachs’s 2005 “Next Eleven” prediction of the largest economies that could significantly impact global economy.
Read more at Council on Foreign Relations.
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