Which Economics System Does South Africa Use?
Overview
South Africa (SA) is a country located at the southern tip of the African continent. The government system is a republic; the chief of state and head of government is the president.
Neighboring countries include Botswana, Lesotho, Mozambique, Namibia, Swaziland, and Zimbabwe. It also includes a small, sub-Atlantic archipelago of the Prince Edward Islands. The geography of SA is vast scrubland in the interior, the Namib Desert in the northwest, and tropics in the southeast.
The economy of SA is the second largest in Africa, after Nigeria. It’s one of most industrialised countries in Africa. South Africa is an upper-middle-income economy by the World Bank, one of only four such countries in Africa alongside Botswana, Gabon and Mauritius.
SA has created a diversified economy with a growing and sizable middle class. It’s a mixed economy. In which there’s a variety of private freedom, combined with centralised economic planning and government regulation.
It’s said that a mixed economy is actually optimal. As it exploits the dynamicity and develop mentalism of the market while exploiting the ability of the state to provide public goods, welfare, market regulation, and other critical functions.
However according to MoneyWeb article titled calling SA a ‘mixed economy’ is deceiving. MoneyWeb reports that. In 1994 SA’s per capita GDP was a little higher than the world average. Now, it’s a little below. We’re starting to slip back. Today, SA is a social-market economy at best with a nominally free-market system with limited government intervention in price formation.
The top five challenges to doing business in the country have been inefficient government bureaucracy, restrictive labour regulations, a shortage of skilled workers, political instability, and corruption, whilst the country’s strong banking sector was rated as a strongly positive feature of the economy.
