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.

The UNCTAD World Investment Report for 2004 rated South Africa as the most attractive country in Africa for trans-national corporations in 2003. Foreign direct investment in telecommunications and information technology overtook mining and extraction.

Macro Economic Stability
South Africa has achieved a level of macro-economic stability not seen in the country for 40 years. These advances create opportunities for real increases in expenditure on social services, and reduce the costs and risks for all investors, laying the foundation for increased investment and growth. The budget deficit decreased from 9,5% of Gross Domestic Product (GDP) (including the deficits of the former Bantustans) in 1993, to 1,5% in 2005. Total public-sector debt fell from over 60% of GDP in 1994 to barely 35% of GDP in 2005. The net open forward position of the Reserve Bank improved from -US$25 billion in 1994 to a positive $US17.2 billion by 2005. (the highest level ever) Foreign reserves rose from two month's import cover in 2004 to three months import in 2005.

The world economy continued to enjoy robust economic growth in the first three quarters of 2005 and is likely to register real growth of almost 4 per cent in 2005 as a whole, well above the trend growth rate.

Against this background, the economic upswing in South Africa continued and completed twenty-four quarters of uninterrupted expansion in the third quarter of 2005. Revisions to the national accounts data, based on comprehensive information which mostly becomes available with a fairly long time lag, resulted in the growth rate of real gross domestic product for 2004 now being estimated at 4,5 per cent, instead of the previously calculated 3,7 per cent.

 

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

 

Sectors / Industry Information:


The potential of the South African economy is evident in the diverse sectors and industries that exist in South Africa. Click here to view Sector brochures.

 

 

Costs of doing Business:


The costs of doing business in South Africa compares favourably to other emerging world markets. The Economist Intelligence Unit has rated South Africa as highly cost effective. The country boasts the lowest electricity prices in the world, with labour costs significantly lower than those of other key emerging markets and a favourable corporate tax rate. 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.

Cost of doing Business in South Africa Guide
This guide is for investors who wish to have ready-made information, that can be used in investment making decisions. It should be borne in mind that the cost figures contained in this document are indicative and these could vary within a relatively short space of time. It is therefore advised that researchers and analysts obtain current figures from the sources quoted in this document. Although every effort has been made to verify the accuracy of the information contained in this publication, the dti Trade and Investment South Africa division will not be held responsible for any damage or loss suffered by any person or entity arising from the use of this information.

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

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:

  • The JSE Securities Exchange SA (JSE)

  • The SA Futures Exchange (Safex)

  • The Bond Exchange of SA (BESA)

  • Alternative Exchange (Altx)

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. The Government recently announced large scale upgrading of the country's infrastructure as well as investment into new infrastructure. Public company Transnet (a state owned enterprise) is SA's main transport operator and is the holding company for SAA (air transport), 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

  • 88% of the world's reserves of platinum group minerals

  • 45% of the world's reserves of gold and

  • 73% of the world's reserves of chromium.

South Africa ranked in top position in the majority of the world mineral reserves and production, in 2004:

 

Reserves

Production

Gold

1

1

Platinum Group Metals

1

1

Chrome Ore

1

1

Vanadium

2

1

Alumino-silicates

1

2

Manganese ore

1

1

Vermiculite

2

1

Uranium

4

10

Coal

6

5

Nickel

5

8

Iron ore

9

7

Aluminium

n/a

8

Source: Department of Mines and Energy, Minerals Bureau.

 

   
 

 

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