Rob Glenn Economics Reports 3/13/14
South Africa is the most powerful and successful economy on the African Continent. But this economic powerhouse is struggling and showing signs of distress. (World book) Their economy has been on the decline in the past four years. This is shown through the study of their macroeconomics and their exchange rate, as well as inflation.
First the Country of South Africa has a floating exchange rate. This means the value of their money is determined by the laws of supply and demand. The South African Rand isn’t very successful on the open market. For example, the exchange rate between other world economic superpowers like New Zealand, Australia, the British pound, the Euro and the United States dollar ranges between 9.2-17.9 South African Rand to the other countries currency. (exchangerates.org) This proves that the value of the Rand is not worth much on the World Market compared to other countries’ currencies, and has hit its lowest value within the last five years.
As of January 2014 the inflation rate of South Africa was around 5.9 percent. (tradingeconomies.com) The average inflation rate for South Africa was around 9.47 percent between the years of 1968-2014. (Tradingeconomies.com) The average inflation rate for the previous year was around 5.40, and the highest inflation rate ever suffered by the South African market was 20.90, but on the other hand they experienced an extremely low inflation rate of around .20 during a time of economic growth in South Africa. (tradingeconomies.com) The forecasted inflation rate for the remainder of the year is expected to be around 5.54 percent. (Tradingeconomies.com) The South African economy averages a .7 percent rise in prices on a monthly basi...
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South Africa’s once booming economy is on the decline as their markets struggles to gain its place in the world while their economy continues to emerge. (World book) The main macroeconomic problem that South Africa suffers from most is there difficulty in supplying jobs for many of its citizens in its country. They also suffer from a bad exchange rate on the open market, and continue to struggle to reduce their inflation rate.
Works Cited
Work Sited Page
“9 major problems facing South Africa-and how to fix them,” (2011 July, 18). www.leader.co.za/printarticle.aspx?s=1+f=1+a=2893. Retrieved from www.leader.co.ca
Reuters. (2014, March 12). “South Africa Economy Slowing,” Business Report. Retrieved form www.iol.co.za.
www.exchangerates.org
www.tradingeconomies.com/southafrica
www.Heratige.org/index/country/southafrica
www.economist.com
Every country has its own form of currency which is used as a medium of exchange within that particular country although there are countries which share a form of currency such as those in the European union which share the euro. Currency in one country can be exchanged for that of another country based on the exchange rate. An example of this is between the euro and the US dollar where the exchange rate is that 1 euro can buy approximately 1.2396 US dollars.
South Africa was positively affected in the way that before the Dutch and British, South Africa had been split up into many different tribes, who though they were free were not united. Through the centuries of hardship South Africa came out of apartheid very strong and the ANC has maintained a popularity of 60% popularity for all the elections since 1994. Economically South Africa has blossomed and is the 2nd largest economy in all of Africa and has managed to triple its GDP even though it has been less than 30 years since it has left apartheid, established democracy and freed itself from many international sanctions. South Africa’s economy still has many issues though for it is still an underdeveloped country which suffers from lack of education, employment, and crime. Socially South Africa remains strong as it is united under one goal of making its nation once again great, and it has maintained its heritage and culture. In fact, a quick look at a South African site will show many articles and memorials, of days in the past remembering the struggle for freedom. Politically, South Africa has remained strong and united with the ANC still carrying the vast majority of the votes and uses a governmental system quite similar to ours with a separation of powers and a thriving democratic system. Luckily, political diversity has also started to appear with many other groups appearing making the most out of South Africa’s democracy and all of which pledge freedom and are led by native
Priscilla. “The World Economy and Africa.” JSpivey – Home – Wikispaces. 2010. 29 January 2010. .
"News." Africa Continues to Grow Strongly but Poverty and Inequality Remain Persistently High. N.p., n.d. Web. 26 Nov. 2013.
The country is economically suffering from sanctions from many other countries in protest of Apartheid
WWF. (2014). Environmental problems in south africa. [online] Retrieved from: http://wwf.panda.org/who_we_are/wwf_offices/south_africa/environmental_problems__in_south_africa/ [Accessed: 4 Jan 2014].
To put it simply, the exchange rate is a price. As with any other market, price is determined by supply and demand. Whenever they are not equivalent, the exchange rate would change. However, the reality comes to be far more complicated.
...ellent policies, 5) the Constitution had come into existence through the working together of various groups that had composed South Africa, 6) South Africa's political and economic institutions are well established, 7) and that South Africa is by far the most developed country in Africa. However, there are still avenues that can impede further progress, more so economically then politically. Primarily the lack of foreign investment, especially when South Africa's gold and diamond reserves are emptied as other parts of economy are not as developed. Secondly, the economic gap between whites and blacks that was stretched during the time of apartheid needs to be tightened or else it could become dangerous to the stability of the political system. However, due to the leadership of Nelson Mandela, South Africa’s current government structure exists to solve these issues.
Artadi, Elsa V., and Xavier Sala-i-Martin. The Economic Tragedy of the XXth Century: Growth in Africa. Cambridge, MA: National Bureau of Economic Research, 2003. Print.
Economic development is highly dependent on the natural resources for food and energy production, which inputs to manufacturing, and to absorbing wastes and pollutants. Thus, there is a high dependency on farming. However, South Africa is not rich in agriculture resources; ...
The majority of the continent of Africa has not been as economically progressive as the other continents in today’s world. However, over the past few years, it has been rapidly growing. Although there have been multiple countries in Africa that have reflected a strong growing economy, such as South Africa and Botswana, there are many other countries that are still corrupt and are still struggling to grow as a nation. There are many challenges that are facing Africa currently. Some of these major challenges being, corrupt governments, vicious cycles of aid, and poverty traps. However, among these challenges, there still lies to be great opportunities for Africa within their technology and business sectors.
According to Collier & Dollar, (2001) economic growth is normally dependent on the nature and quality of economic policies that a country implements. In South Africa, soon after apartheid the government have tried to wrestle with the multiple objectives which are namely to reduce poverty, increase employment, increase international trade as well as increasing the rate of economic growth. According to Mohr et al, (2015) the macroeconomic objectives are used to assess the performance of the economy. The five macroeconomic objectives that will be discussed in this assignment are firstly the economic growth, full employment, price stability, balance of payments and equitable distribution of income. The assignment will then evaluate each of the objectives of macroeconomic growth and asses where South Africa as a country is performing on each of these respective points.
Also, the current irregular financial growth tendency has widened the breach between the rich and poor such as, South Africa and other further developed nations. According to financial forecasts if the existing blueprint of uneven monetary growth persists, one of the poorest nation of the world such as, South Africa will raises to be even poorer will a power plant or not. The second question has made social scientists, policy creators, and worldwide institutions to reorganize ideas about the impact of globalization on nations such as, the above.
“I believe that the biggest factor which changed South Africa’s government was the international pressure it got, mostly from the UN. I would love to believe that South Africa’s government eventually understood their mistakes but the UN played a huge role. Without the tension from the United Nations, I probably wouldn’t have been able to get out of prison as soon as I did.”