As one of the strongest performing economies on the continent, South Africa has been able to weather the economic storm that 2020 unleashed better than most. But with Q1 of 2021 coming to a close, economic analysts and experts are eying the prospects for the recovery of the South African economy in 2021.
Despite experiencing a negative growth rate of 8.0%, according to the IMF’s October 2020 forecast, there is a large degree of optimism present among experts. In fact, in an update to the 2021 forecast, it has recently been estimated that South Africa can expect to see 3% GDP growth in 2021 so far, with a return to a more stable 1.5% due in 2022 – if everything goes according to plan.
The ANC’s economic recovery plan to handle and respond to the harshest consequences of the pandemic are based on aggressive implementation of an Economic Reconstruction and Recovery Plan. This aims to stimulate growth in a manner that is both equitable and inclusive, uplifting all sectors of South African society. With this in mind, at the heart of this plan is a move to mobilise investment funds, create new jobs, protect existing jobs, accelerate industrialisation and pursue public and private investment in key sectors.
But what are the key sectors that have been identified in the ANC’s economic recovery plan, and what are the employment prospects looking like for those in these industries?
With a total population now nearing the 60 million mark, the manufacturing demand within South Africa has truly never been greater. In response to the meteoric population growth the country has experienced over the last number of years, South Africa has developed a diversified manufacturing base to meet both local and international demand.
This covers a range of sectors and industries, such as agro-processing, automotive, ICT, electronics, metals and textiles, as well as chemical production. This diverse manufacturing capacity has allowed South Africa to experience a huge amount of growth over the last two decades.
Experts are predicting that the South African manufacturing industry will nearly double its output by the year 2025. Consequently, in terms of employment opportunities and job creation, the manufacturing sector will play an incredibly important role in the lives of many South Africans.
Communications and information technology
As is the case with many other countries on the African continent, the communications and information technology sector is one of the sectors that looks set to experience solid growth prospects in the coming year.
Although encompassing a number of discrete sectors and industries, there is no denying that pursuing digital development will be key to securing a prosperous future for the South African economy. Large-scale infrastructure plans, such as the rolling out of fibre broadband and 5G networks, will both amplify and accelerate this growth, which will enable more and more individuals and businesses to get online. With the South African cell phone market one of the fastest growing in the world, the investment and employment opportunities in this sector are immense.
We can expect to see several related spin-off industries undergo similar levels of growth as a result of this broad trend. For example, with the expansion of the availability of mobile internet and mobile devices, we have also seen parallel growth in markets such as online casinos. With more and more individuals connected to the internet and each other, it seems natural that people will spend more of their spare time online, and the growth of internet casinos in the past year is a strong indicator of this.
With this in mind, the employment prospects in the communications and IT sector, and its various related industries and sectors, are looking incredibly strong for South African job-seekers in 2021.
As has historically been the case, agriculture remains a hugely important aspect of the South African economy. According to current estimates, around 8.5 million South Africans are employed either directly or indirectly in the agriculture sector. It is one of the fastest growing sectors in South Africa, both in terms of its overall importance to the economy and to the lives of individual South Africans.
In recognition of this, government support programmes have been developed by the South African government to support commercially oriented, small-scale farming enterprises, as well as support for local smallholders. Additionally, significant resources have been funnelled into the agro-processing industry.
With all that said, agriculture will not only continue to be a hugely important source of employment for millions of South Africans but will also continue to be an important source of job creation in the coming year.