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Sa Investment Presentation Sa Investment Presentation Presentation Transcript

  • SOUTH AFRICA’S INVESTMENT ENVIRONMENT TRADE AND INVESTMENT SOUTH AFRICA A division of the Department of Trade and Industry November 2005 SOUTH AFRICA’S INVESTMENT ENVIRONMENT TRADE AND INVESTMENT SOUTH AFRICA A division of the Department of Trade and Industry 2006
  • Overview
    • South Africa at a glance
    • Africa, SADC and South Africa
    • Macro-Economic Overview
    • Investment Performance
    • SA Business Environment
    • Export Performance
    • Specific Investment Opportunities
    • Incentives
    • Services for Investors
    • How to contact us
  • South Africa at a glance
    • Area 1,219, 090 kms
    • Population 44,8m
    • Currency R1 = 100 cents
    • Time GMT + 2 hrs
    • Head of the State President Thabo M Mbeki
    • 11 Official languages with English the business language
    • Total GDP 2004 R1 374 bn (US$ 213 bn)
    • GDP 2004 per capita R29 422 (US$ 4 568)
    • Real GDP Growth 3.7% (2004)
    • Inflation (CPIX) 4.3% (annual 2004 average)
    • Exports Gold, minerals, diamonds, metals and metal products, food, automotive components
    • Main trading partners Germany, USA, China, Japan, France
    View slide
  • Africa, SADC and South Africa View slide
  • Macro-Economic Stability Fiscal Policy Source: SARB
  • Macro-Economic Stability Monetary policy Source: SARB
  • Macro-Economic Performance Source: SARB Key Macro -E c onomic Indicators -5 0 5 10 15 20 25 Fiscal deficit (% of GDP) Real merchandise exports (% of GDP) CPIX(% change) Bond Yield (10 yrs and over) Nominal prime rate Real GDP growth 1990 2004
  • Macro-Economic Performance Source: Moodly’s; S&P
  • Macro-Economic Outlook Source: BER
  • Business Environment Legal and Financial Markets
    • World Class Legal Framework
      • Substantive legal framework particularly in commercial, labour and maritime law regimes
      • Advanced legislation relating to competition policy, copyrights , patents , trademarks , and disputes
      • Independence of judiciary is guaranteed by the Constitution
    • Financial System / Markets
      • Financial system is robust and well regulated
      • Four of South Africa’s banks are in the world top 500
      • The Johannesburg Stock Exchange (JSE) is the 17 th largest in the world
      • South African commercial banks have wide presentation in Africa
  • Business Environment Labour Market
    • New Labour Legislation since 1994
      • Labour Relations Act
      • Skills Development Act
      • Skills Development Levies Act
      • Employment Equity Act
    • Labour Bargaining Council
      • The Council played a major role in the reduction of worker days lost due to strikes.
      • The Labour Relations Act provides for collective bargaining Institutes, which leads to increased flexibility in the labour market.
  • Business Environment Infrastructure
    • Roads & Rail
      • Extensive road and rail network across South Africa which connects with Sub-Saharan African region
    • Ports
      • Strategic ports are located in Durban, Cape Town, Port Elizabeth, East London, Richards Bay, and Saldanha Bay.
      • Together these handle over 13,000 vessels and 188 million tons cargo a year.
    • Telecommunications
      • SA ranks 23 rd in telecommunications development, and 17 th in internet use in the world
      • SA has the largest and most developed telecommunications network in Africa
      • There are 4.8 million installed fixed lines in 2003
      • Growth in SA’s mobile phone market is among the highest in the world
  • Investment Performance A large part of the inflow in 2001 was as a result of the buy-out of De Beers minority shareholders Source: SARB
  • Investment Performance Percentage Share of FDI by Sector as at 31 Dec 2003 Source: SARB
  • Investment Opportunities Source: DTI/TISA Hotels and self-catering holiday resorts, Adventure-, Eco-, Sport- Conference- and Cultural tourism, Gaming, Infrastructure development, Leisure Complexes and World class golf courses Tourism Automotive Electronic Manufacturing, Upgrade of Micro Chip Plant, Contract Manufacturing Electro Technical Call Centres, Back Office Processing and Shared Corporate Services Business Process Outsourcing & IT Enabled Services Fine and Specialty Chemicals, Inorganic and organic Chemicals and Pharmaceuticals, Consumer formulated chemicals and bulk formulated chemicals Chemicals and Allied Industries Interiors, Engine Parts/Components, Electronic, Drive Train Components, Body Parts and Aluminium Components Automotives Fisheries and Aquaculture, Floriculture, Fruit and Vegetable Processing Plants, Juices, Meat Processing, Wine Production, Confectionery, Indigenous Teas and Natural Fibres Agro-processing Sub-sector Sector
  • Investment Opportunities Source: DTI/TISA Aerospace: Rotor and fixed wing aviation equipment and services, Helicopters and aircraft components, Aviation training services for African airlines, IDZ at Johannesburg International Airport, Warehousing for aircraft parts Rail: Rolling stock and services for the domestic market, Estimated R7 billion Gautrain which includes infrastructure development and rolling stock, Rail infrastructure of the African continent through NEPAD and Rehabilitation of low density rail line Marine: Development of boat yards and wet docks/floating docks, Joint ventures with local shipyards, Manufacture of boats, yachts and catamarans, fleet racing boats, Custom-made vessels (tugs) and Training schools Aerospace, Rail and Marine Aluminum smelter capacity, Capital equipment: machine tool manufacturing and petrochemical equipment, Downstream processing and value-adding of iron, carbon steel, aluminum, platinum group metals and gold, Ferro-alloys, gold and stainless steel Mining and metal based industries Cotton Spinning, Weaving and Knitting, Industrial Textiles, Middle- to high-end apparel wear, Production of other natural fibre textiles Clothing, Textiles, Leather and Footwear Sub-sector Sector
  • Potential Investments in National Infrastructure over the next 5 years
    • Electricity: R95 billion/ €12 billion
      • Rehabilitation of three power stations; plus the construction of two peaking plants (R15 billion/ € 1,8billion)
    • Transport: R40, 8 billion/ €5 billion
      • In Durban Harbour, the expansion and redesign of Pier 1 and the widening of the entrance will cost R2, 9 billion/ € 360 million
      • The container terminal at Ngqura and the expansion of the Cape Town Container Terminal will cost R2, 6(€325 million) and R1, 4(€175 million) billion respectively.
      • The new Multipurpose Pipeline from Durban to Gauteng will be a R3 billion(€375 million) investment.
  • Potential Investments in National Infrastructure over the next 5 years
    • In product terms Eskom’s demand for steel and cement per annum in the next few years is 60 000 and 1 million tons respectively.
    • The construction of the pipeline will require anywhere between 75 000 and 90 000 tons of steel.
    • Spoornet will spend some R8 billion/ € 1 billion on locomotives, wagons and equipment.
  • Incentives Prospective IDZ operator companies must apply for permits to develop and operate an IDZ Exemption from VAT when sourcing goods and services from South African customs territory and duty-free imports of raw materials and inputs for export Industrial Development Zone   Development must be a significant technological advance and have commercial advantage over existing product 50% of the direct cost incurred in development Support Programme for Industrial Innovation   Investments of less than R100m; benefit decreases with size of investment   Cash grant of up to 10% of qualifying assets Small and Medium Enterprise Development Programme Main Conditions Benefit Incentive
  • Incentives The minimum qualifying infrastructure development cost is R15m   Infrastructure projects intended to service IDZ, shall qualify for a grant of 30% of the qualifying infrastructure development cost Critical Infrastructure Fund   Only new machinery, equipment acquired from abroad and required to establish a manufacturing project in SA will be considered Foreign entities may qualify up to a maximum of R3m   Foreign Investment Grant Main Conditions Benefit Incentive
  • the dti’s Investment Services
    • Information on Investing in SA and Business Environment
    • Detailed Sector Information
    • Finance to Explore Investment Opportunities in SA
    • Facilitating Direct Government Support in the form of Investment Incentives
    • Investment Facilitation
    • After care – ongoing contact
    • the dti Call Centre: 0861 843 384
    • the dti Switchboard: 012 394 0000
    • Website: www.thedti.gov.za
    • Postal Address: Private Bag X 84
    • Pretoria
    • 0001
    the dti’s Contact Details
  • Thank You