South Africa’s seven commercial ports form by far the largest, best equipped and most efficient network on the African continent, handling 500 million tons of cargo annually. They function as strategic transshipment hubs for traffic between Europe, Asia, the Americas and Africa. The phenomenal growth in airline traffic since 1994, through the major international airports in Johannesburg, Durban and Cape Town, is due to the rapid growth of both tourism and business travel.
South Africa is ideally positioned for access to the 14 countries in the Southern Africa Development Community (SADC) with a total population of over 180 million people. Most imports into SADC are manufactured in or transported via South Africa. Well-developed roads and rail links provide the platform and infrastructure for good transportation deep into sub-Saharan Africa.
Rapid Liberalization of Trade and Investment Environment
South Africa trade and industrial policy is continuing its change towards an internationally competitive economy capitalizing on its competitive and comparative advantages. Already tariff barriers have been reduced, exchange controls relaxed and a greater labor market flexibility has been introduced.
The most pleasant surprise which many first-time visitors receive on arrival in South Africa is the excellent physical infrastructure including modern rail, road, air and other transportation services. The harbor and road systems are well maintained and hold immense potential for public-private partnership. A well-developed electricity network, through the power parastatal Eskom, supplies roughly half of Africa’s electricity with a generating capacity of 157 million GWh. The Spatial Development Initiatives (SDI) programme is unlocking the potential of under-developed areas by identifying public-private partnership in bulk and municipal infrastructure projects and over 400 projects in the Provinces.
Sophisticated Financial Markets
South Africa’s well-developed financial system is unrivalled in any emerging market. Corporations operating in South Africa are well served by merchant banks, brokerage firms, corporate finance houses, and a wide variety of financial services specialists, both in terms of application of modern technology and skill in international finance. The Johannesburg stock exchange, formed in 1887, is the 11th largest stock exchange in the world by market capitalization and has already replaced the ‘open-outcry’ system with automated screen based trading.
Cutting Edge Technology
South Africa’s history has led to the development of unique and sophisticated technologies. Today these technologies are sustaining the industrial and mineral beneficiation mega-projects that form the cornerstone of the new global industrial strategy. The abundance of high quality coal and scarce water provided the incentive to develop highly efficient coal-fired power stations with minimal water requirements, including the largest dry-cooled coal-fired power station in the world today at Matimba. The real price of electricity has reduced steadily. Sasol, a South African energy giant, is the world’s most successful producer of liquid fuel from coal. It possesses unique technology to produce both fuel and chemical components from coal in a single process. The major steel producer, Iscor, introduced a major technological breakthrough with the development of the Corex process, which uses coal instead of coke to produce molten iron.
World Class Telecommunications and Information Technology Industry
Telecommunications is one of the fastest growing industries in South Africa, with a growth rate of 45 % driven largely by the introduction of cellular telephones and the recent partial privatization of Telkom. Telkom’s 5 year Vision 2000 programme aims to add 3 million telephone lines, a 75 % increase. The company insists on obtaining the latest global technology at the best life-cycle costs. Telkom installed at SAT-2 digital fiber-optic cable in 1993, which effectively provides southern Africa with access to the global telecommunications highways. Overall South Africa has one of the most advanced telecommunications systems of all emerging markets
Diverse, cost efficient Mineral and Agro-Industry Inputs
South Africa has the competitive advantage in beneficiation of mineral and agricultural inputs due to the immense concentration of reserves of important minerals, its low-cost coal-based electricity supply, a world class infrastructure with considerable capacity, a developed and skilled technology base and proven entrepreneurial abilities. South Africa has the world’s largest reserves of chrome ore (68 %), vanadium (45 %), andalusite (90 %), manganese ore (3.9 billion tons). It also holds substantial reserves of antimony, asbestos, diamonds, coal, fluorspar, iron, lead, zinc, phosphates, uranium, vermiculite, zirconium and platinum group metals. The agriculture, forestry and fishing industries provide the growing agro-processing industry with abundant resources and are well-positioned to export to the northern hemisphere ‘out of season’. South Africa has developed one of the largest planted forestry resources in the world.
Unsurpassed Quality of Life
With an abundance of natural attractions, a yearlong temperate climate and an inclusive and sociable outlook on life, South Africa and its citizens offer long term visitors or residents a quality of life unsurpassed anywhere in the world. First world health care, education, property, sporting and recreation facilities, ensures that South African lifestyles are world class. As with any major political and economic transition, problems of adjustment are evident in the incidence of crime and violence in the major metropolitan centers, and are not particular to South Africa.
Government Commitment to Investment Facilitation
The South African government welcomes foreign investors. All exchange controls on non-residents have been lifted so that investors are free to take their money out of the country at any time. Against the background of rapidly transforming the national economy, striving to expand and increase its competitive edge in world markets, the South African government has implemented a plethora of incentive programs. These are aimed at accelerating and facilitating the transition to competitive and sustainable manufacturing industries. The key features are: –
- Tax holiday incentive scheme
- Small, medium manufacturing development programme
- Accelerated depreciation allowance
The national and provincial governments have developed investment promotion and facilitation strategies, which are focused on the needs of international competitive companies and their search for new and profitable markets. A national network of investment promotion agencies is focused on the new global industrial strategy of the Department of Trade and Industry. This is a component of the government’s Growth, Employment and Redistribution (Gear) strategy and impacts on the investment decisions facing world class companies.
The national investment promotion agency, Investment South Africa (ISA) will provide access to: –
- A sector specific marketing strategy linked to your field of operations.
- An online database focusing on the regulatory, commercial and operating environment effecting your company.
- Links to local joint venture partners.
- Tailor made itineraries for inward investment missions.
South Africa – Inspiring New Ways