The purpose of this paper is to assess South Africa’s international price and cost competitiveness, particularly with regard to labor costs, and to examine the quantitative relationships between South African cost competitiveness and trade
South African export and investment performance improved markedly during the 1990s, particularly the post-1994 period, coinciding with the demise of Apartheid, the ending of sanctions, and the adoption of more liberal economic policies. However, some questions remain. Although much improved, South African overall export growth still lags behind that of the most dynamic emerging economies. Moreover, the improved performance could be due to a one-time postsanctions boom rather than a manifestation of sustained long-term competitiveness.