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Doing Business in South Africa

A presentation on the opportunities and the challenges in doing business in South Africa
by

Kevin Gorey

on 30 January 2015

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Transcript of Doing Business in South Africa

Doing Business in South Africa
The Hopeful Continent
Southern African Development Community (SADC)
A
free trade area
of
14 member states
A regional population of over
250 million
Plans underway to create a
free trade area throughout Africa
with a consumer population of
over 700 million people!

South Africa!
Key Industries:

Access to over
1.1 billion people
Production of
$2.2 trillion GDP

Annual growth of
5.16% GDP

Over
60% world's arable land

President: Jacob Zuma
Official Languages: 11
Number of Provinces: 9
Currency: Rand
Economy:
25% of Africa's GDP
40% of Africa's Industrial Output
50% of Africa's Spending Power
Ease of Doing Business 39 out of 185 countries!

Tourism is growing with
over 10% year-on-year growth
in 2013 to over
10 million visitors
! The answer to its success is in its diverse
cultures
, gorgeous
wine country
and renowned
wildlife reserves
. South Africa

has received numerous distinctions for its tourism industry:
The Lonely Planet
recently ranked Cape Town as the
# 3 destination
to visit in 2014!
Travel + Leisure
recently ranked three South African hotels in the top 10 in Africa!
OR Tambo
airport rated
the best in Africa
SA ranked
#1 destination for business conferences
in Africa, and #34 globally!
Over the past decade,
research and development
expenditure
has grown five-fold
from R4 billion to R21 billion. The technology sector is continually
robust and growing
:
The South Africa has been selected to host the
Square Kilometre Array,
which will be the
largest radio telesope
in the world!
South Africa has pioneered its first electric car,
The Joule
, capable of 200 km

between charges
Vodacom has launched a
low-cost solar-powered
mobile phone to charge on the go!
Other areas of innovation include:
medicine, mineral extraction
and
synthetic fuels
Although the mining sector used to play a larger role, it still contributes
10% of GDP
and a total of
1 million jobs!
The reason for the success?
South Africa remains
a cornucopia
of vital natural resources with over
$2.5 trillion dollars
in mineral reserves.
Ranked:
1st in platinum
output,
2nd in

palladium
output,
3rd in

gold
output and
6th in coal
output globally!
South Africa ranks about 20th among the
crude steel
producing countries in the world!
South Africa, traditionally rooted in the primary sectors, has been transformed into
a vibrant knowledge-based economy
:
SA is the
financial capital of Africa
with more than 70 foreign banks
Johannesburg Stock Exchange
is the
16th largest
stock exchange in the world!
Ranked
1st in regulation of securities exchanges
,
1st in auditing and reporting
,
2nd in soundness of banking system
and
2nd in currency performance
against the dollar!
South Africa has developed an established,
diversified manufacturing base
. It was recently
ranked 24th
globally by the World Economic Forum. Some successes include:
The chemicals sector
: the
largest of its kind
in Africa and a
world leader
in coal-based synthesis & gas-to-liquids technology
The textiles sector:
which has evolved into a
capital-intensive industry
, producing synthetic fibres in ever-increasing proportions
Many
major multinational firms
use South Africa in their supply chain. These include:
BMW
,
Ford
,
General Motors
,
Volkswagen, Renault, Toyota, Nissan

and Mercedes
, among others.
The TRUE Size of Africa
With over 30,000 square kilometers of land, Africa is larger than: the US, China, India and Europe combined!
A world-class
infrastructure
,
counter-seasonality
to the U.S., vast
biodiversity
and marine
resources
, and
competitive input costs
, make the country a major player in world markets.
South Africa's agricultural sector is
well developed
and secondary manufacturing in the agro-processing industries is spreading widely
South Africa is
self-sufficient
and a
net food exporter
and the second largest exporter of fruit in the world
Africa Rising
The Value Proposition
South Africa's automotive industry is
a

global engine
for the manufacture and export of
vehicles and component parts:

Automotives account for about
10% of total manufacturing exports

The sector comprises
7.5% of GDP

Production of
over 500,000 vehicles
annually
"After decades of slow growth, Africa has a real opportunity to follow in the footsteps of Asia" - The Economist (Dec. 3, 2011)
Africa has abundant opportunities
including:

Tourism
Technology
Financial Services
Automotive
Mining & Minerals
Manufacturing
Agro-processing
BE
ONE
SOUTH AFRICA
What are
YOU
waiting for?
"No economy can grow by excluding any part of its people, and an economy that is not growing cannot integrate all of its citizens in a meaningful way."
~ From South Africa's Black Economic Empowerment Strategy Document
Demographic Dividends
With a large young population coming into being, South Africa has a huge potential for harnessing the power of a youthful working population.
Real GDP Growth (%) and GDP Per Capita*
*Source: Euromonitor
*Source: Euromonitor
These Companies Are Already Doing Business in South Africa:
Doing Business in South Africa
Questions?
Challenges in South Africa
Black Economic Empowerment (BEE)

South Africa's policy of
BEE
is a pragmatic growth strategy that aims to realize the country's full economic potential while helping to bring the black majority and other disadvantaged groups into the economic mainstream.

BEE
includes the following measures:
Employment preference
Skills development
Ownership
Management
Socioeconomic development
Preferential procurement

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