A man stands on the street sign for Eighth Avenue as he waits for a taxi in Alexandra Township, Johannesburg, South Africa, 01 October 2013.
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, with high youth unemployment rates, slowed growth, and continued economic inequality.
The five years between 1994-99 that Mandela led South Africa were characterized by strong growth from an economy that had stagnated under international trade sanctions imposed against the pro-apartheid government. Experts say that Mandela played a key role in fostering reconciliation and restoring trade relations with countries that had turned from the oppressive regime.
"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 [Mandela] 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 U.S. and Europe. The softer quality that he brought through his ability to reconcile and communicate really helped."
One of the key reasons South Africa, the continent's largest economy, joined the BRICS group of the world's most important emerging market economies -- a cluster that also includes Brazil, Russia, India and China -- was the institutions put in place after apartheid by Mandela's government, and his administration's resistance to nationalization policies like those of neighboring Zimbabwe. At the same time, the rising black middle class helped increase consumer spending.
The country is rich in resources like platinum and gold, has the strongest financial services industry on the continent and large swathes of farmland which have made it a major producer of crops like maize and cereals.
The African National Congress, in its earlier socialist incarnation, had planned to nationalize assets like mines, which has proved economically disastrous elsewhere in Africa. Mandela succeeded, in part, because he turned away from those earlier stances when he assumed the presidency.
"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."
The institutions set by Mandela and others under South Africa's constitution included its first democratic government and its Human Rights Commission. His government also gave new powers to its National Treasury, all of which helped to promote a more stable economy.
However, failure to tackle inequality and external factors like the recent drop in the price of gold, have meant slower growth rates for South Africa's relatively strong economy, with economic growth this year predicted to slow to around 2 percent, according to Investec. Economists have expressed concerns 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 in South Africa, with particular difficulties with power supplies. These factors tend to discourage investment from global companies, according to Schoeman.
"The government is still playing catch-up from the underinvestment by the apartheid regime," she said.
Its political stability may also be under threat. There has also been increased labor 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.
And political changes might be afoot, as well. In 2014, the ANC faces its first real electoral challenge since the introduction of a full democratic government swept them to power. This will be the first year the so-called "Born Free" generation, who don't remember life under apartheid or when Mandela was imprisoned, 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."
First published December 6 2013, 9:48 AM