BUSINESS REFLECTION: Loaded for Bear: SA’s GDP and fiscal numbers get a lift from zama zamas
GDP is the sum of all the goods and services produced in a country over a specific timeframe, and the bottom line is that those linked to zama zamas and other ‘informal’ economic actors have now been subjected to heightened scrutiny to derive a more accurate estimate.
South Africa's gross domestic product (GDP) has undergone a significant rebasing, bringing the informal sector, including zama zamas, into the economic fold. This twice-a-decade update, aligned with international practices, has re-calculated the country's economic output using the year 2022 as the base year, rather than the previous 2015. The result is a larger GDP of R6.99 trillion, marking a 4.9% increase from the previously reported R6.667 trillion.
The mining industry, a key contributor, saw a 12.5% boost due to the inclusion of illegal mining activities, a phenomenon known as the "non-observed economy" or NOE. The NOE, which accounts for 8.7% of the economy, has expanded significantly following the pandemic, with the zama zama sector playing a notable role in boosting this figure.
Illegal mining activities, encompassing activities such as cannabis, abalone, diamonds, and precious metals production, have been subject to heightened scrutiny. This has led to a larger contribution from these illicit operations, a surprising and welcome development for the country's fiscal position.
While the mining sector's contribution remains dwarfed by other industries, such as finance, every increment to GDP is significant. This rebasing has had a substantial impact on South Africa's fiscal ratios, which are now more favorable. The debt-to-GDP ratio has decreased from 78.4% to an estimated 74.6% for 2025/26, a reduction of nearly four percentage points. This improvement could potentially trigger another credit upgrade, leading to lower borrowing costs and enhanced investor confidence.
Written by urgent.news from Daily Maverick's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
