One of the major issue is the dubious distinction of having one of the world’s most volatile currencies. This should be of serious concern to the country’s policymakers. The country had depended on foreign investors to service the current-account deficit nice 1994, attracting only a handful of long-term capital inflows and 90% of a short- term nature. The risk had been that, if these investors caught fright because of the situation in Zanzibar, for example, the money being attracted from offshore could flow out overnight as was being seen now.
Rand weakness would might hit the country’s public service infrastructure projects such as those of Eskimo and Transient with roughly 40% of their budgets to be spent on imports. South African markets would remain volatile while the international markets were volatile, but in South Africans case the ups and downs can be even more renounced. Exports Imports The current account deficit narrows (13. 9 in 2009) this year but should widen thereafter as imports outpace exports. The downturn and the attendant large deficits have also made it more urgent to increase the efficiency of public expenditure.
STRENGTHS * South Africa is today one of the 30 most industrialized countries in the world and the Africans largest economy * South Africans economy has been growing at almost 5 % a year for the past several years – 32 consecutive quarters of positive growth. Following the global economic recession, this figure was expected to drop in 2008/09, Bessie) * The South African stock exchange is the 17th biggest exchange in the world. * Its financial system and capital markets are among the most advanced in the world. South Africans infrastructures are known as really effective and enable the distribution of commodities to the urban centers of the country. I. E. Tomato International Airport, major ports make a central and crucial position * Strong governmental policy framework * Sound and efficient financial services and CIT sector * A good tertiary and technical educational system * Well established international trading regime: AGO, E Free Trade Agreement, WTFO membership, SAD membership, Motor Industry Development Programmer(Meld).
Weaknesses * deficiencies in government’s capacity * the volatility of the currency * low levels of investment infrastructure and infrastructure services * shortages of suitably skilled graduates, technicians and artisans * insufficient competitive industrial and service sectors and weak sector strategies * inequality and normalization, resulting in many economically marginal’s people being unable to contribute to and/or share in the benefits of growth and development (the Second * Some of the infrastructure, such as the electricity system, don’t meet Economy). The demand and slow growth phase.
Electricity infrastructures have failed to adequately maintain existing power stations (2007) (343 billion have been invested to create new generation of stations) * bidirectional links between economic and social problems, as evidenced by the recent violence against immigrants, accused to be the reasons for the increasing unemployment and lower wages. * Low skill levels * High cost of labor Lack of entrepreneurial spirit Low productivity Unstable currency Government’s lack of expertise and experience in governing and international relations, trade negotiations in particular, ethnic divisions.
OPPORTUNITIES * South Africa is regarded as one of the easiest places to do business in Africa as well as having one of the lowest costs of dealing with construction permits. In recent years, South Africa has attracted an increasing number of FED projects, with figures * The fact that South Africa has been chosen to host the 2010 World Cup FIFE is one sign among others that this country is now considered a stable prestige.