The Structural Change Emergency in South Africa

Calumn Hamilton () and Emmanuel Mensah ()
Additional contact information
Calumn Hamilton: Faculty of Economics and Business, University of Groningen and Development Economics Group, Wageningen University & Research
Emmanuel Mensah: South African Research Chair in Industrial Development, University of Johannesburg, South Africa and School of Economics, Utrecht University

No 300, ERSA Working Paper Series from Economic Research Southern Africa

Abstract: In the decade up to 2019, South Africa underwent what may reasonably be described as a structural change emergency. Aggregate annual labour productivity growth was negative on average across the decade; this was accounted for by negative or negligible efficiency gains within all major sectors, and by growth-reducing structural change overall. Growth-reducing structural change implies that labour moved on average from more-to-less productive sectors. The underwhelming structural change and sectoral productivity growth performance of South Africa in this period stand out when compared with earlier periods in post-apartheid South Africa and in international comparison with Africa and the BRICS. Since 2020, there are green shoots of recovery, implying that the structural change emergency may be over. Nevertheless, this recovery is both non-transformative and highly unbalanced sectorally, although it is quite balanced geographically across the provinces of South Africa. The recovery is driven entirely by productivity growth or labour reallocation within, and reallocation of labour towards, the services sector. Recent evidence in the academic literature suggests that services can drive rapid growth through structural transformation, but the current situation in South Africa where non-services sectors are still acting as a drag on growth remains clearly sub-optimal. Hamilton, C., & Mensah, E. (2026). The structural change emergency in South Africa (ERSA Policy Paper No. 46). Economic Research Southern Africa. https://doi.org/10.71587/7tgeja02

Keywords: South Africa; servicification; industrialization; structural change; productivity (search for similar items in EconPapers)
JEL-codes: E22 E62 O16 O40 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2026-04
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published in ERSA Working Paper Series, April 2026, pages 44

Downloads: (external link)
https://ersawps.org/index.php/working-paper-series/article/view/300/193 First version, 2026 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:rza:ersawp:300

Access Statistics for this paper

More papers in ERSA Working Paper Series from Economic Research Southern Africa
Bibliographic data for series maintained by Maggi Sigg ().