Within days of first detection, Omicron SARS-CoV-2 variant case numbers grew exponentially and spread globally. To better understand variant epidemiological characteristics, we utilize a model-inference system to reconstruct SARS-CoV-2 transmission dynamics in South Africa and decompose novel variant transmissibility and immune erosion. Accounting for under-detection of infection, infection seasonality, nonpharmaceutical interventions, and vaccination, we estimate that the majority of South Africans had been infected by SARS-CoV-2 before the Omicron wave. Based on findings for Gauteng province, Omicron is estimated 100.3% (95% CI: 74.8 - 140.4%) more transmissible than the ancestral SARS-CoV-2 and 36.5% (95% CI: 20.9 - 60.1%) more transmissible than Delta; in addition, Omicron erodes 63.7% (95% CI: 52.9 - 73.9%) of the population immunity, accumulated from prior infections and vaccination, in Gauteng.