South Africa has been a stable, constitutional and multi-party democracy since 1994.  Its peaceful political transition after decades of instability, economic decline and apartheid has been a remarkable success.

Overview

Population:    46.9 million

Currency:       South African Rand

Capitals:   Cape Town (legislative), Pretoria (administrative)                      Bloemfontein (judicial)

Total GDP:     R.1,560 billion

GDP
per Capita:    R.33,253

Exports:        Gold, minerals, diamonds, metals, foods, pulp and                          paper

The South African Government, dominated by the African National Congress (ANC) enjoys a high level of legitimacy. President Thabo Mbeki took succeeded Nelson Mandela as President of the Republic of South Africa in 1999 and was re-elected for a second 5-year term in April 2004, when the ANC achieved two-thirds majorities in the parliamentary and provincial elections.

Economics

South Africa has the continent’s largest economy.  Within the parameters of responsible and conservative macroeconomic policies, development is being increasingly driven by the demand for economic transformation, most notably via the country’s broad-based black economic empowerment (B-BBEE) programme.  South Africa is one of the largest external investors in many African countries and has expanded its trade links within the continent significantly since 1994.

The South African economy has undergone a remarkable transformation.  A largely natural resources based economy has given way to a more dynamic and resilient financial system in which higher value-added manufacturing and services are thriving.  The services sector currently contributes close to 70% to GDP.  In the decade prior to 1994, economic growth averaged less than 1% a year.  Since then it has averaged almost 3% a year.  Economically, 2005 was a very good year for South Africa.  Although inflation increased slightly, there was a slight reduction in unemployment figures while 5% GDP growth and record tax collections reduced the budget deficit to 0.5% of GDP.

Opportunities in South Africa

Opportunities in South Africa include:

• Automotive Industry
• Call Centres
• FIFA Soccer World Cup 2010
• Mining Sector
• Wine Industry
• Infrastructure
• Tourism

AsgiSA

The South African Government has embarked on a new macroeconomic policy designed to step up growth to the next level, conceding that infrastructure constraints and other impediments to foreign investment need to be addressed urgently. AsgiSA is a practical strategy to remove obstacles to sustainable higher rates of growth, employment creation and poverty reduction, with the aim of halving poverty by 2014.

The aim is average growth of 4.5% or higher for the next three years and at least 6% on average from 2010 to 2014. In addition to faster growth, AsgiSA will improve conditions for more job creation. Key to achieving this accelerated and shared growth is the need to increase the levels of foreign and domestic investment in the economy. This will entail a number of interventions including stabilising the currency, delivering a R370 billion infrastructure programme, prioritising key sectors of the economy including ICT, business process outsourcing, tourism and biofuels, accelerating the acquisition of key skills, and building capacity and easing regulatory constraints.

Broad-Based Black Economic Empowerment

Black Economic Empowerment (BEE) is a market system that sets out to ensure a sense of collective ownership and sustainability. It is about normalizing South African society and bringing South Africa’s long excluded majority into the mainstream of the economy.

Broad-based black economic empowerment (B-BBEE) is a progression from the narrow-based black economic empowerment in that it looks more broadly than just at ownership and management. According to the BEE Act, B-BBEE can be defined as “an integrated and coherent socio-economic process that directly contributes to the economic transformation of South Africa and brings about significant increases in the number of black people that manage, own and control the country’s economy, as well as significant decreases in income inequalities”. Black people are defined as South African citizens who are African, Coloured or Indian.

B-BBEE seeks to undo the economic damage of apartheid through a growth strategy that targets inequality within the South African economy. B-BBEE highlights 7 areas or elements of focus: ownership, management, employment equity, skills development, preferential procurement, enterprise development and residual (corporate social investment). Residual or social investment, is about a companies’ investment in people, organisations or communities that is external to the work of that company.

The Codes require a certain percentage to be spent in a number of development areas, such as education, HIV, Skills training, the Environment, Sport and Arts and Culture. At least 75% of the benefits must accrue to natural persons who are black and preferably those in rural communities or part of the government’s rural development and urban renewal programmes.

Alive with Possibility

Our country, as a united nation, has never in its entire history enjoyed such a confluence of encouraging possibilities. Our success will flow from our creativity, our diversity and our sense of community."

President Thabo Mbeki, 2005 State of the Nation Address.

For more information about South Africa:
www.imc.org.za, www.southafrica.info