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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. Government stated that intention is to encourage business activity, investment and job creation by providing a stable economic environment with low interest rates a model budget deficit, moderate inflation and a competitive currency. Investment incentives and industrial financing assistance are offered as a means of actively seeking foreign direct investment.

The New Growth Plan (NGP) launched in 2010 aims at restructuring the economy to provide greater and more inclusive growth. The NGP’s ambitious goal is to create 5 million new jobs by 2020 and lower the unemployment rate from 25% to 15%.

The key areas targeted for job creation, include infrastructure development, agriculture, minerals, manufacturing and tourism. A longer-range National Development Plan (NDP), the product of discussion between government, business and labour, launched in 2012, hopes to create 11 million new jobs and reduce poverty substantially by 2030.

Why invest in South Africa
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, remains 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 at the Department of Trade and Industry website.

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. Read more at the Department of Trade and Industry website.

TradeInvestSA is a free monthly electronic journal distributed on behalf of the South African Department of Trade and Industry, profiling trade and investment opportunities in South Africa. Click here to subscribe.
Sectors / Industry Information

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

Doing Business - Cost
The cost of doing business in South Africa compares favorably to other emerging world markets. The costs of labour, land, rental, human resources, transportation and general living do vary from province to province. Gauteng, as the economic hub of South Africa, is only marginally costlier than the other provinces, yet it offers business amenities that have a world class standard.
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. Read more at the Department of Trade and Industry website.
Infrastructure:
 

a. Financial

South Africa is one of the world's favorite 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:

  • The JSE Securities Exchange SA (JSE)
  • The SA Futures Exchange (Safex)
  • 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 at the Department of Trade and Industry website.

 

b. Transport and Logistics

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), Petronet (liquid petroleum), Portnet (port authority) and Fast Forwards (container shipments).

Natural Resources

South Africa has huge mineral resources as follows:

  • 80% of the world's reserves of manganese ore
  • 56% of the world's reserves of platinum group minerals
  • 35% of the world's reserves of gold and
  • 68% of the world's reserves of chromium.
Read more at the Department of Trade and Industry website.

 
H.E. Amb MP Bona
Head of Mission
 
 
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