SWOT Analysis of South Africa Reveals How to Boost the Economy

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South Africa is home to valuable minerals including chromite, diamonds, and vanadium. The economy is built on mining, but it’s not a practical method to survive, especially when unemployment is at an all-time high. Despite the negative associations linked to the region, South Africa has many strengths to offer and opportunities to take advantage of.

In this SWOT analysis, you’ll learn about South Africa’s greatest strengths, weaknesses, opportunities, and threats affecting the area.

South Africa Strengths: A diverse region, a booming industry, and peaceful transition into democracy

Eclectic languages, customs, and cultures.

One of South Africa’s major strengths is its diversity. The cultures are rich, distinct, and filled with many colorful people. It’s common to find people speaking a multitude of languages who follow different customs based on various religions.

European interest in South Africa’s mining industry.

South Africa is a rich location for several raw minerals, including copper, cobalt, and gold. Businesses in the mining industry may wish to invest in South Africa as a resource. Big-name corporations (like BMW) from Greece, the United Kingdom, and Europe have already invested in the South African market, which is creating global interest in the country.

Potential tourist attraction.

Africa, including the southern region, can make for an interesting tourist spot because of the many exotic animals and tropical rainforests.

Cheap labor means more outsourcing.

It’s cheaper for Europen and North American corporations to outsource labor to South African workers. Although this country is one of the pricier places to live in Africa, the cost of living is still one of the lowest in the world, and workers accept a lower salary.

Peaceful democracy.

In the 20th century, South Africa transitioned into a democratic position with such peacefulness, it’s considered one of the biggest accomplishments for the whole continent.

South Africa Weaknesses: Skyrocketing unemployment rates, natural diseases, and regional wars plaguing the area

Expensive cost of living despite an all-time high unemployment rate.

Although Africa is known to have a low cost of living, South Africa suffers from a weakness: being one of the most expensive areas in the continent. It’s still more than 40% less expensive than living in the United States. But since South Africa has a 29% unemployment rate — the highest since 2008 — many of the citizens are struggling to make ends meet.

Prone to natural disasters.

Unfortunately, since South Africa is close to the coastal line, it’s more vulnerable to water-related natural disasters. Five of the region’s major cities sit by the coastal area and are more likely to be affected by hurricanes and typhoons. If they are, it could be a detriment to the micro economy.

Rising crime rates, wars, and riots.

Despite the peaceful transition to democracy, the African country is plagued by regional wars, petty crimes, riots, and even killings. In many of the areas, children are encouraged to play inside because of the possibility of abductions. The more expensive homes and apartments reside within fences to deter burglars, but the people who can’t afford these prices are vulnerable to the violence.

Deadly diseases affecting the continent.

Africa is subjected to many deadly diseases, famine, and drought. South Africa may be the more pricey area, but the civilians still suffer from these issues, as well as malnutrition. Most of the diseases affect women and children more so than men.

South Africa Opportunities: Develop new industries, expand on current industries, and open tourist attractions.

Expand the mining industry.

More businesses can take advantage of the raw minerals South Africa offers. If enough corporations are interested, South Africa’s mining industry could quickly flourish. It’d also create more jobs, which South Africa desperately needs right now.

Branch into service-based industries.

With that said, relying on one industry for economic growth could backfire. Instead, South Africa should focus on developing service-based industries like hospitality and banking. This way, the country’s economy can have diverse roots, and new even more jobs will be created. Considering the majority of the population is aged between 15-65, there’s an abundance of young people who can provide physical labor to develop the new industry.

Light the entrepreneurial spirit.

Now that the internet is attainable for more people in the country, entrepreneurs can offer online products. Ecommerce businesses will allow residents to sell products inside and outside of the region.


Tourism is another opportunity. South Africa is home to some of the most beautiful destinations and adventure sites in all of Africa. With the ocean close by and gorgeous river landscapes, the area can easily become a fantastic tourist attraction. Visitors can also see marine life, take part in desert safaris, and even scuba dive.

South Africa Threats: Even more violence and negative connotations

Racial discrimination leading to even more violence.

Along with the violence cited in the “weaknesses” section, there’s also the threat of radical groups, including terrorists. Racial groups promote violence, putting many South Africans on edge. The discrimination between black and white people is still high. The inequality is causing anger to simmer, which has led to the escalation of violence in the area. Unfortunately, race issues are difficult to handle effectively.

Negative connotations from outside perspectives.

The intense bouts of violence and crime have led other countries to view South Africa negatively. The region is often associated with corruption, wars, and danger. Because of this, not only are people afraid to move to South Africa, but corporations are wary to invest. Will their investments be safe? Will they see profits? If the answer isn’t a definitive “Yes” the businesses will find other places to invest.

Bottom line:

South Africa is a lively country surrounded by many races, cultures, and languages. Unfortunately, the unemployment rate is continuing to rise, as is the cost of living.

If South Africa can expand the mining industry, build new service-based industries, and encourage entrepreneurs to create new products, the country could boost the economy and create much-needed jobs. Before this though, they must manage the violence plaguing the area. Many live in fear of petty crimes, regional wars, and abductions. Until this is managed, South Africa will struggle to grow and flourish as it must. 

Want to know how six major macro-environmental factors affect South Africa? Check out the PESTLE Analysis of South Africa here.

Image by Sharon Ang