![]() It is informed by the Systematic Country Diagnostic (SCD) of 2019, developed by the World Bank Group (WBG) in broad consultation with South Africans. The South Africa Country Partnership Framework (CPF) for 2022-2026 presented to the World Bank Board on July 22, 2021, continues the theme of the past three Country Partnership Strategies to support South Africa in its quest to complete a post-apartheid socio-economic transition. Inequality in wealth is even higher, and intergenerational mobility is low, meaning inequalities are passed down from generation to generation with little change over time. High inequality is perpetuated by a legacy of exclusion and the nature of economic growth, which is not pro-poor and does not generate sufficient jobs. South Africa remains a dual economy with one of the highest and most persistent inequality rates in the world, with a consumption expenditure Gini coefficient of 0.67 in 2018. The achievement of progress in household welfare is severely constrained by rising unemployment, which reached an unprecedented 35.3% in the fourth quarter of 2021. The unemployment rate is highest among youths aged between 15 and 24, at around 66.5%. Structural challenges and weak growth have undermined progress in reducing poverty, heightened by the COVID-19 pandemic. The percentage of the population living below the upper-middle-income-country poverty line fell from 68% to 56% between 20 but has since trended slightly upwards, to 57% in 2015, and is projected to have reached 60% in 2020. South Africa has taken considerable strides to improve the wellbeing of its citizens since its transition to democracy in the mid-1990s, but progress has stagnated in the last decade. Strengthening investment, including foreign direct investment, will be critical to propelling growth and create jobs. ![]() Commodity prices remain important for South Africa, a major net exporter of minerals and net importer of oil. Important steps were taken in 2021 towards addressing structural hurdles to growth over the medium term, including an increase in the licensing threshold for embedded electricity generation. Longstanding structural constraints, such as electricity shortages, continue to be binding. The South African economy was already in a weak position when it entered the pandemic after a decade of low growth, expanding only by an average 1% percent between 20, leading to a contraction of income per capita of 5.6% during this period. The outlook is clouded with risks, and sustained reforms and investments are required to support better growth outcomes and poverty reduction. Poverty has reached levels not seen for more than a decade, while inflation has increased to a 13-year high. Employment growth picked up in the first half of 2022, but the labor market situation remains challenging. ![]() The South African economy continues to recover from the effects of the COVID-19 pandemic, albeit more slowly than expected, with growth estimated at 1.9% in 2022.
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