Horizon South Africa

South Africa, France's largest customer and second largest supplier in sub-Saharan Africa, has a modern and diversified economy. With its infrastructure
advanced and its developed industry, it attracts nearly 500 French companies employing more than 65,000 people. Thanks to its transport infrastructure, the country
facilitates access to regional markets, strengthening value chains in key sectors such as finance, telecoms, and agri-food. Despite recent challenges, reforms undertaken, particularly in energy and logistics, are opening up new growth prospects. French companies can rely on a favorable legal and tax framework to develop strong local partnerships.
Yves Battesti – Regional Manager for East and Southern Africa, Indian Ocean – Bpifrance

KEY FIGURES

• Population : 64,1 million inhabitants
• GPD : 403 billion (in USD)
• 41ème world economic power
• Currency : Mexican Rand (R)
• Exchange rate regime : floating

COUNTRY RISKS

• More favorable growth prospects: South African growth, which was hampered in 2024 by high inflation and interest rates, could accelerate in 2025 thanks to improved electricity production, slower inflation and the easing of monetary policy.
• Banking sector: The banking sector's performance (capitalization, profitability, liquidity) is satisfactory. Some institutions have been weakened by the consequences of the crisis, but the sector nevertheless remains resilient.
• Digital transformation: The South African government has announced various projects aimed at encouraging investment in access to equipment, innovation and digital inclusion.
• Energy sector: South Africa is undergoing a major transformation of its electricity market, marked by the opening up of competition. The government has launched a major plan to diversify its energy mix, currently dominated by coal, in favor of natural gas and renewable energies.

AREA OPPORTUNITIES

• Vulnerability of public accounts: Despite the government's commitments to improve public finances, the public deficit is expected to improve little due to spending dynamics. Public debt continues to rise, but its composition (mostly in local currency) limits the risk of over-indebtedness.
• External vulnerability: The current account deficit is expected to remain moderate but could widen with rising imports, while export revenues are expected to be constrained by weak external demand.
• Climate vulnerability: South Africa is the least vulnerable country in sub-Saharan Africa according to the ND Gain indicator, but is nevertheless exposed to climate change (drought, floods).
• Business climate: South Africa has fallen in the World Bank's governance indicators, ranking 114th in 2023. The decline is particularly notable in the areas of regulatory quality and political stability.

To discover the full content, check out our edition Horizon South Africa.