South Africans are far poorer than world average income

Updated July 9, 2025, 12:59 p.m. | By Stacey & J Sbu

South Africa's economic growth has been sluggish since 2010, leaving millions struggling to make ends meet.

South Africa's economic growth has been sluggish since 2010, leaving its population significantly poorer than the global average. The country's GDP per capita adjusted for purchasing power parity was $15,194 (around R270,937) in 2023, compared to the global average of $22,850 (R407,458).

According to BusinessTech, this disparity is attributed to sustained power outages, graft, crime, disintegrating infrastructure and foreign-policy missteps.

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Key Challenges

Low Economic Growth: South Africa's economy is 37% smaller than it would have been if it had tracked its emerging-market peers. The country may have lost out on R5 trillion in taxes since 2010.
Business Confidence: Low business confidence coincides with periods of lower economic growth and gross fixed capital formation. The Bureau for Economic Research data shows that business confidence has been below the 50-mark that separates growth from contraction on average.
Gross Fixed Capital Formation: It was just 15% of GDP in 2024, compared to 40% for China, 30% for India, and 22% for Russia.
Increased Debt: The country's debt-to-GDP ratio remains high, and the loss of potential tax revenue has limited its ability to fund services.
Financial Strain: Many South Africans are struggling to make ends meet, with some relying on credit to survive. A potential VAT increase could push more households into financial distress.
South Africa needs to speed up policy execution to boost business confidence and unlock faster growth. The country needs to increase its gross fixed capital formation to create efficiencies and stimulate economic growth.

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