The Economic Conditions Pre and Post-Independence in South Africa
According to the World Factbook (1), South Africa is a middle-income economy. As at 2013, the country`s GDP stood at US$350.6 billion and a population of 52.98 million people. This paper examines South Africa`s economic conditions before and after 1994. In particular, the analysis will cover 5 years before independence (1989-1983) and five years after independence (1995-1999). Various macro- economic variables will be examined including GDP, GDP growth, GDP per capita, GDP per capita growth, and unemployment.
GDP
Before 1994, South Africa`s GDP recorded a consistent increase, except for 1990 when it registered a decline. After independence, in 1995, the country`s GDP reached a record high.However, after 1995, the GDP started declining consistently, except for 1997 when there was a marginal increase.
GDP Growth
Source: Graphed based on the World Bank data
The GDP growth in the pre-independence period was worse compared to the post-independence period. In particular, in1990, 1991, and 1992 South Africa recorded negative GDP growth. In 1996, the country registered the highest GDP growth rate, thereafter; the GDP growth declined but remained positive. The negative GDP growth rate over the period 1990-1992 was primarily due to the financial and trade sanctions imposed on the apartheid regime coupled with spirited political opposition in the country (Precious 8).
GDP Per Capita
Source: Graphed based on the World Bank data
GDP per capita in the pre-independence and post-independence period is significantly different. In both periods, there are major fluctuations in the country`s GDP per capita. In the pre-independence period, the GDP per capita was at its highest in 1989 ($3621.52). However, in 1990, the GDP per capita declined significantly to $3,182. The figure increased substantially to $3,345.81 in 1991 before recording a further increase to $3,557.11 in 1992. In the post-independence period, the highest GDP per capita was recorded in 1995 with the figure standing at $3862.81. However, after 1995, the country`s GDP per capita declined consistently to 1999 except for 1997, whenthe figure increased by $42.89 to reach $3,636.17.
Growth in GDP per Capita
When we compared the growth in GDP per Capita in the pre-independence period to that of the post-independence period, it is evident that the growth in the pre-independence period was much less compared to that of the post-independence period. In particular, other than 1989, in the period 1990-1993 South Africa`s GDP per capita growth rate was decreasing at an increasing rate. In the post-independence period, the performance has not been very impressive; however, from 1994 to 1997, the country registered a positive growth rate in its GDP per capita, with a record growth of 2.01% in 1996 as indicated in the figure below.
Source: Graphed based on the World Bank data
As indicated in the figure above, even though the growth in the post-independence period was largely positive, the growth was still characterized by wide fluctuations (Fedderke and Charles 5).
Unemployment Rate
Source: Graphed based on the World Bank data
The World Bank data does not provide unemployment data in the pre-independence period. This explains why the period 1989-1993 in the graph is blank. However, in the post-independence period, the data indicates that unemployment rate reached 20% in 1994 before declining to 16.9% in 1995. Over the period 1996 to 1999, the unemployment rate in South Africa increased consistently reaching an all-time high of 25.4% in 1999.
Conclusion
Based on the analysis, it is evident that although the country`s economic performance in the post-independence period is still low, it is much better compared to the pre-independence period. The post-independence period has been characterized by sound macro-economic management that has created a good environment for economic growth and prosperity.
Works Cited
Fedderke, Johannes, and Charles Simkins. ‘Economic Growth In South Africa’. Economic History of Developing Regions 27.1 (2012): 176-208. Web.
Precious, Chipote. ‘Impact of Monetary Policy On Economic Growth: A Case Study Of South Africa’. Mediterranean Journal of Social Sciences (2014). Print
The World Bank. ‘South Africa’. Data.worldbank.org, 2015.Web. 4 Apr. 2015.
The World Factbook.’South Africa’. Cia.gov, 2015.Web. 4 Apr. 2015.