World Economy

What Mandela meant to South Africa's economy

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Nelson Mandela leaves behind a country in better economic shape than it was under white minority rule, but there are storm clouds on the horizon.

The five years between 1994-99 that Mandela, known as Madiba, led South Africa were characterized by strong growth from a very low base. The South African economy under apartheid had struggled under international trade sanctions.

(Read more: Nelson Mandela: A man and a country)

"Coming into 1994, there was a huge fear about how we were going to transition an economy that had disregarded 84 percent of its population. Madiba was very good at strengthening trade post-sanctions," Gina Schoeman, an economist for Citi based in Johannesburg, told CNBC.

"This allowed us to repair trade relations, particularly with the US and Europe. The softer quality that he brought through his ability to reconcile and communicate really helped."

One of the key reasons South Africa joined the BRICS group of the world's most important emerging market economies was the institutions put in place post-apartheid by Mandela's government, and its resistance to nationalization policies like those of neighboring Zimbabwe.

(Read more: World mourns Nelson Mandela)

The legacy of Nelson Mandela

"Mandela was a pragmatist on the economy. He rejected nationalization even though it was official ANC policy," Peter Attard Montalto, emerging markets economist at Nomura, told CNBC.

"One of the reasons that it is still an investment grade country is the institutions he set up."

However, there are cracks in South Africa's relatively strong economy, with slowing growth this year partly blamed on the drop in the price of gold.

Economists are concerned at the moment about the country's high current account deficit, which stood at 6.8 percent of gross domestic product in the third quarter. Its currency, the rand, is widely viewed as one of the "Fragile Five" emerging markets currencies, and is down 18 percent against the dollar this year. There has not been a corresponding rebound in exports, partly because infrastructure is still a huge problem, particularly the difficulties in the electricity supply, and discourages investment from global companies, according to Schoeman.

"The government is still playing catch-up from the underinvestment by the apartheid regime," she said.

(Read more: Photos with Mandela)

Its political stability may also be under threat. There has also been increased labour unrest in the past couple of years, particularly in the mining industry. With a huge public sector wage bill to fund, the government's chances of reducing the deficit are slim, according to Schoeman.

The ANC is facing its first real electoral challenge since the introduction of full democratic government swept them to power, in 2014. This will be the first year the so-called "Born Free" generation, who don't remember life pre-apartheid, votes. And with more than half of them unemployed, they may punish the dominant political power.

"Since he left, inequality has widened and there has been too much focus on making a cadre of people rich," Attard Montalto said.

"The biggest challenge is there are other things on the agenda for them than helping inequality."

- By CNBC's Catherine Boyle. Twitter: @cboylecnbc.