Johannesburg, South Africa, Image accreditation: Steven dosRemedios on Flickr

The World Bank forecasts that South Africa’s economy will grow by 1.3% in 2024 after an estimated growth of 0.7% in 2023. Both local and international factors impact the country’s economic outlook. 

We interviewed Baneng Naape, Associate Economist at The Competition Tribunal of South Africa, regarding the economic outlook for South Africa in 2024.

What is the economic outlook for South Africa in 2024?

The straight answer is, yes, there are prospects for growth, but the question is by how much. This year, it is expected to grow by about 1%.

But when you look at the average negative growth average, say, for the last ten years, it’s relatively low compared to other emerging market economies, like Brazil, India, and China. So, we could be performing better in terms of economic performance.


What factors are causing the slow rate of economic growth in South Africa? 

Various factors can be cited. As I understand, the bulk of them can be blamed on the COVID-19 pandemic. But even before the COVID-19 pandemic, the South African economy was already in a dire state.

Due to the poor performance of various state-owned enterprises – you will recall that state-owned enterprises used to be considered drivers of growth and job creation in South Africa until recently when they started performing poorly due to poor governance, leadership, bad financial management and things like that. And we have found ourselves in a situation where we are spending the bulk of national income or government revenue on state bailouts. The money could be invested in other development projects, like infrastructure. So, that’s one thing.

What about global factors?

As South Africans, we don’t have control over some factors, and one of those factors would be the geopolitical tensions that have been taking place in the last three years. One of them is the Russia-Ukraine war, which has led to disruptions in the supply chain and has had a knock-on effect on energy and food prices because most companies rely on energy to produce goods and services. So the moment the price of energy sources increases, then it means that even the cost of those products they produce will increase automatically. One of them being food too, you’ve also seen through increases in public transport fares. 

How does our current inflation affect economic growth?

The other thing that also has a knock-on effect is inflation. As the South African Reserve Bank tries to keep inflation lower by hiking their repo rate, that also has an impact on household disposable incomes because if you have a car loan, home loan or a personal loan with the bank and they increase their repo rate, then that automatically means that your monthly repayments are going to increase provided you have a variable interest rate, which is the interest rate that many South Africans choose, you hardly find South Africans who opt for the fixed interest rate.

While there are prospects for growth, there remains significant uncertainty about what will happen this year.

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