NOSACON

A+ R A-

About South Africa

E-mail Print PDF

South Africa

With its modern infrastructure and "first" world communications system, the Republic of South Africa has the most sophisticated free-market economy in Africa. Accounting for 40 percent of Africa's industrial output and Africa's busiest port (Durban), South Africa is a gateway through which more than 500 U.S. corporations venture. One of the most favorable indicators of South Africa's progress since the historic 1994 elections the government willingness to work with private-sector and international investor to create economic and social opportunities.

In September 1999, in Washington D.C., the U.S. government hosted top level South African political and business leaders, including State President Thabo Mbeki for a week of discussions designed to increase trade relations. As further indication of a commitment to increasing mutual trade, the U.S. Small Business Administration and the Corporate Council on Africa will present a Trade and Outreach Mission to the Republic of South Africa October 25 -November 3, 1999.

Developing the Relationship

South Africa's nine provinces are splendid representation of geological features, African traditions, and safari and big game parks, all linked by efficient modern transportation. The medium sized city of East London in the Eastern Cape Province provides the perfect venue for New Orleans' and Louisiana's entry into the global markets of South Africa. Nestled against the Indian Ocean and surrounded by rolling hills, East London boast of South Africa's natural beauty, a wide spectrum of hotel accomodations, municipal facilities capable of hosting conferences and a 40,000 people of ocean view entertainment venue. Most importantly, enthusiastic and motivated city-leadership rooted in the business community, embraces the concept and is commited to its successful implementation.

Why Invest in SA

South Africa today is one of the most sophisticated and promising emerging markets globally. The unique combination of a highly developed first-world economic infrastructure and a huge emergent market economy has given rise to a strong entrepreneurial and dynamic investment environment.

Macro Economic Stability

The success of the first democratic election in 1994 put the economy on a growth path and created a conducive environment for both domestic and foreign investment. During the latter half of 1997 the world economy and especially emerging markets were negatively affected by the East Asian financial crisis. South Africa's economy was no exception and the economy grew by only 0.8 per cent in 1998 compared to 2.6 per cent in the previous year.

The economy recovered quite robustly after 1998 before world economic conditions began to deteriorate towards the end of 2000. The weakening of the international economy resulted in a slowdown in growth in South Africa during the first quarter of 2001 but the domestic economy picked up again in the second quarter of 2001. Exactly how the effects of the events of 11 September will impact on growth in the near future, remain to be determined. Much will depend on events in the US economy. However, South African trade is diversified across a range of products and markets, and has weathered adverse international conditions fairly well so far. Read more

Market Opportunity

One of the greatest reasons why South Africa has become one of the most popular trade and investment destinations in the world is because we make sure that we can meet your specific trade and investment requirements. There are many lucrative possibilities arising from South Africa's wealth of natural resources and almost unlimited export and import opportunities.

Sectors / Industry Information

The potential of the South African economy is evident in the diverse sectors and industries that exist in South Africa.

Costs of doing Business

The costs of doing business in South Africa compares favourably to other emerging world markets. The costs for labour, land, rental, human resources, transportation and general living expenses do vary from province to province. Gauteng as the economic hub of South Africa is only marginally higher than the other provinces, yet it offers business amenities that have a world class standard. For more information, go to www.tisaglobal.com.

Skills

South Africa possesses a large resource base of skilled, semi-skilled and unskilled labour. The South African government has introduced wide-ranging legislation to promote training and skills development and to fast-track the building of world-class skill and competence.

A strong network of universities and other tertiary education institutions is home to a host of leading international academics and researchers, with the majority of research and development in South Africa undertaken at the country's universities.

Financial Infrastructure

South Africa is one of the world's favourite emerging markets, offering investors sophisticated financial infrastructures and exceptional investment opportunities. The SA Reserve Bank (SARB) oversees the banking services industry in SA. The non-banking financial services industry is governed by the Financial Service Board (FSB). Sa has three principle financial service markets:

  1. The JSE Securities Exchange SA (JSE)
  2. The SA Futures Exchange (Safex)
  3. The Bond Exchange of SA (BESA)

The JSE is governed and licensed externally by the Stock Exchange Control Act of 1985. The Safex and BESA markets are governed by the Financial Marketers Control Act of 1989. The markets are self regulated internally. Read more

Transport and Logistics Infrastructure

South Africa boasts one of the most modern and extensive transport infrastructures in Africa. This infrastructure plays a crucial role in the country's economy and is depended on by many neighbouring states. Public company Transnet (a parastatal) is SA's main transport operator and is the holding company for SAA (airways), Spoornet (rail transport), Autonet (road transport), Pertronet (liquid petroleum), Portnet (port authority) and Fast Forwards (container shipments).

For more information, go to www.tisaglobal.com

Natural Resources

South Africa has huge mineral resources as follows:

a.. 80% of the world's reserves of manganese ore
b.. 56% of the world's reserves of platinum group minerals
c.. 35% of the world's reserves of gold and
d.. 68% of the world's reserves of chromium.

South Africa ranked in top position in the majority of the world mineral reserves and production, in 1999:

Reserves Production

  • Gold 1 1
  • Platinum Group Metals 1 1
  • Chrome Ore 1 1
  • Vanadium 1 1
  • Alumino-silicates 1 1
  • Manganese ore 1 2
  • Vermiculite 2 1
  • Uranium 4 8
  • Coal 5 4
  • Diamonds 5 5
  • Nickel 5 8
  • Iron ore 9 8
  • Aluminium n/a 8

Source: Department of Mines and Energy, Minerals Bureau.