Deciphering South Africa’s current realities on economic activity


By Ebrahim Deen & Lehlohonolo Modise


Statistics SA reported a 1.6% gain in the South African economy over the 3rd quarter 2022[i], with agriculture, fisheries and forestry performing much better than expected, growing by 19.2%. Finance and real-estate also increased by 1.9%, providing a 0.5% boost to the GDP growth, indicating the continued importance of the sector to the country, with manufacturing increasing by 1.5%, largely driven by increases in the automotive parts, accessories, and other transport equipment sector. South Africa’s economy is now valued at 1.16 trillion rand, higher than its previous peak of 1.15 trillion in the last quarter of 2018, prior to the Covid-19 crisis[ii].


This sees the country avoid a technical recession, since the economy shrunk by 0.7%in the 2nd quarter but rebounded in Q3; significantly this was 4 times the 0.4% growth projected by a Bloomberg survey of economists. It is also noteworthy that the 2nd quarter drop was largely influenced by the KwaZulu Natal floods, which devastated the province.


The economy is now 2% larger in ‘real’ terms than the end of 2021, higher than the projected 1.9% annual growth projection; it will likely grow by 2.5 % in 2022, according to economist projections[iii]. This is significant as this growth is in a context of global economic decline, which is a result of the increase in oil and gas prices and the Russia/Ukraine crisis. Further, it illustrates that many businesses have already factored in the current bout of load shedding and are taking mitigatory measures, which have been successful to date.


It is also noteworthy that exports increased by 4.2%, largely influenced by trade in minerals and base metals, indicating the continued attractiveness of South African products globally. In addition, the increase of imports by only 0.6% is indicative of a better trade balance, when compared to the last quarter and will hopefully dampen the impact of a weakening rand.


Other notable highlights


  • The transport, storage and communication industry increased by 3,7%, contributing 0,3 of a percentage point. Increased economic activities were reported for land transport, transport support services and communication services.
  • The unadjusted real GDP at market prices for the first nine months of 2022 increased by 2,3% compared with the first nine months of 2021.
  • Statistics South Africa’s Quarterly Labour Force Survey (QLFS) for Q3 2022 [iv]concluded: 204 000 jobs were gained between the second quarter of 2022 and the third quarter of 2022. The total number of persons employed was 15,8 million in the third quarter of 2022.
  • The number of unemployed persons decreased by 269 000 to 7,7 million and discouraged work-seekers also decreased by 54 000 to 3,5 million in the third quarter of 2022 compared to the previous quarter. The number of people who were not economically active for reasons other than discouragement increased by 264 000 between the two quarters resulting in a net increase of 210 000 in the not economically active population.
  • The above changes in employment and unemployment resulted in the official unemployment rate decreasing by 1,0 percentage point from 33,9% in the second quarter of 2022 to 32,9% in the third quarter of 2022. The unemployment rate according to the expanded definition of unemployment also decreased by 1,0 percentage point to 43,1% in Q3:2022 compared to Q2:2022.
  • The following industries Manufacturing (123 000), Trade (82 000), Construction (46 000) and Transport (33 000) recorded the largest job gains, while job losses were recorded in Finance (80 000), Private households (36 000) and Mining and Agriculture (1 000) each. Sectors that recorded job increases were the formal and informal with 235 000 and 6000, respectively.
  • Manufacturing, trade, and construction are industries that are largely dependent on consistent electricity supply. Despite South Africa experiencing power cuts for most days between July and September, these are the industries that account for the bulk of the job gains in the third quarter this year.



This illustrates a clear resilience of both South African’s and the South African economy. The country’s economy thus continues to be positively represented in global data relating to the South African nation and brand.



South Africa ranked 3rd on the 2021 Rand Merchant Bank’s top ten economies in Africa list[v]. The list is compiled annually and measures the investment attractiveness and performance of economies on the African continent. South Africa was noted as offering “a strong manufacturing and retail base that will continue to support southern African regional economies with goods and services”. An analysis of this ranking is reflective of the country’s operating environment that is easing and attractive for international investors.



Furthermore, South African companies comprised over 60% of the companies listed and 70% of the value of Brand Finance’s 2022 Africa 150 index, which ranked the top 100 company brands on the African continent[vi]. MTN retained its position as the top African company, with its brand growing by 49% to be valued at around $4 billion, with Capitec Bank retaining its position as the continent’s strongest brand, scoring 92 on the Brand Strength Index, an increase of 3 points since 2021. Significantly banking and telecommunications were seen as the brands which grew the most by the index between 2021 and 2022, placing South Africa in an optimal position in light of the country’s strong banking and telecommunications sector, with companies which have expanded continentally.



It is noteworthy that South African companies ranked were jointly valued by Brand Finance at around $36 billion, more than ten times greater than Nigerian brands, ranked 2nd, which were valued at around $3 Billion. In addition, Brand Finance argues that continental brands grew in value by around 30% from 2021 as a result of the overcoming of the Corona virus crisis through innovation and agility.



In addition, the inaugural Financial Times’s Fastest Growing Companies in Africa, compiled with statistics firm Statista, saw South African companies comprise around a third of the 75 countries ranked (24)[vii]. This was larger than Nigeria, which had 20 countries in the rankings and Kenya with 9 countries. The index assessed the 5-year growth of these companies between 2017 and 2021, ensuring that the growth was not just cyclical. Significantly the index used financial statements in its assessments and rankings and was not a result of surveyed information; it was thus more fact based rather than rankings rooted in perception.



The result of this was an enhancement of South Africa’s position according to the Brand Finance’s Nation Brands report 2022, which saw the brand increase by 23.3 % to $216 billion, the 4th largest increase when compared to the countries measured[viii]. Significantly the index focuses on performance, investment and perception and is a gage of how nations are viewed globally. South Africa’s position has increased by 6 places to now be ranked 44th, with the report enumerating the country’s continued potential.



(Ebrahim Deen & Lehlohonolo Modise – Research Team : Brand South Africa)