A Country Presentation on Republic of South Africa


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This is an exhaustive presentation on the Republic of South Africa, including PESTEL analysis as well as 12 pillars of global competitive index.

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  • its society remains divided, while inequality and inequity persist.
  • One debate is between economicpolicy centrists in the ANC and its alliance partnersin government, the Congress of South African TradeUnions (Cosatu) and the Communist Party, which favourinterventionist left policies. Meanwhile, a strong nationalistcomponent of the ANC – which includes the ANCYouth League – and calls to nationalize the mines andturn to more interventionist land policies have seensome support on the ground but have failed to penetrateformal ANC policy.
  • Nonetheless, thestrong sense of commitment and ambition in SouthAfrica’s institutions and its democratic traditions as wellas its widely respected Constitution limits the risk of significant
  • Growth point for africaLargest economy in subsaharanafrica
  • SOUTH AFRICA UNEMPLOYMENT RATEUnemployment Rate in South Africa decreased to 24.70 percent in the third quarter of 2013 from 25.60 percent in the second quarter of 2013. Unemployment Rate in South Africa is reported by the Statistics South Africa. From 2000 until 2013, South Africa Unemployment Rate averaged 25.5 Percent reaching an all time high of 31.2 Percent in March of 2003 and a record low of 21.9 Percent in December of 2008. In South Africa, the unemployment rate measures the number of people actively looking for a job as a percentage of the labour force. This page contains - South Africa Unemployment Rate - actual values, historical data, forecast, chart, statistics, economic calendar and news. 2013-12-10
  • Doing business report first singapore
  • Two of these languages are of European origin: English and Afrikaans, the latter originating from Dutch and serving as the main language of most white and coloured South Africans. Though English is commonly used in public and commercial life, it is only the fourth most-spoken home language.[9]Since the end of apartheid, South Africa's unique multicultural character has become integral to its national identity, as signified by the Rainbow Nation concept.
  • Comfortably within the top 20 of the Global Gender Gap Index, South Africa maintains the top spot in theregion on political empowerment, holding the seventh position on this subindex and the fourth on the womenThe index, released by the World Economic Forum, ranks 135 countries according to how much they havereduced gender disparities based on economic participation, education, health and political empowerment,while attempting to strip out the effects of a country's overall wealth. in parliament indicator. The Global Gender Gap Reports aim to quantify the size of gender-based disparities, tracking their progressover time.
  • The government has identified massive infrastructure projects as key to boosting the country's economic growth rate and creating employment, and is spending billions of rands on getting the investment ball rolling.
  • The country's economy is reasonably diversified with key economic sectors including mining, agriculture and fisheries, vehicle manufacturing and assembly, food processing, clothing and textiles, telecommunication, energy, financial and business services, real estate, tourism, transportation, and wholesale and retail trade.
  • Labour costs low, but not nearly as low as in most other emerging markets, and the cost of the transport, communications and general living is much higher.though this rebound was limited to the automotive, basic chemicals, iron and steel and food and beverages industries. The performance of this sector remains curtailed by the low demand in South Africa's main export markets in the developed world.
  • South Africa's strong institutional framework is further supported by the high accountability of its privateinstitutions, for which it ranks second in the world, and its financial market development, for which it ranksthird.The report also credits the country with an efficient market for goods and services (28th), and for doing"reasonably well" in more complex areas such as business sophistication (35th) and innovation (39th).
  • A Country Presentation on Republic of South Africa

    1. 1. 1
    2. 2. Introduction Officially the Republic of South Africa, is a country located at the southern tip of Africa.  2,798 kilometres (1,739 mi) of coastline that stretches along the South Atlantic and Indian oceans.  To the north lie the neighbouring countries of Namibia, Botswana and Zimbabwe; to the east are Mozambique and Swaziland; and within it lies Lesotho, an enclave surrounded by South African territory. 25th-largest country in the world by land area Close to 53 million people, 24th-most populous nation 2
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    6. 6. South Africa’s smooth and peaceful political transition to a constitutional democracy remains an icon of remarkable political achievement. This political transition brought political freedom and civic rights and extended social services to millions of South Africans. 6
    7. 7. The ruling party: The African National Congress (ANC) Celebrated its centenary in 2012. Looks set to remain the strongest political force during the second country strategy period (2013-2016). The elected ANC President is expected to stand for national presidency the 2014 election. 7
    8. 8. South Africa has achieved the 1st Millennium Development Goal (MDG) − halving the proportion of the population living on less than USD 1 a day The government is keen on tackling issues such as providing adequate public health services, improving the quality of education, tackling income inequality, reducing unemployment and especially among the youth. 8
    9. 9. Government announced GROWTH, EMPLOYMENT REDISTRIBUTION STRATEGY (GEAR) policy AND President - Jacob Zuma 9
    10. 10. Unique system for the election of its president. Unlike other former British colonies and dominions who have adopted a parliamentary republican form of government and those that follow the Westminster system, South Africa's President is both head of state and head of government and Commander-in-Chief of the South African National Defence Force (SANDF). Contrary to presidential systems around the world, the President of South Africa is elected by the Parliament of South Africa rather than by the people directly or an Electoral College 10
    11. 11. ECONOMY South Africa is ranked as an uppermiddle income economy by the World Bank Newly industrialized country. Its economy is the largest and most developed in Africa In terms of purchasing power parity, South Africa has the seventh-highest per capita income in Africa. South Africa has been identified as a middle power in international affairs, and maintains significant regional influence. 28th-largest in the world 11
    12. 12. 12
    13. 13. 13
    14. 14. GDP LAST GDP GROWTH RATE 0.70 GDP ANNUAL GROWTH RATE GDP CONSTANT PRICES GROSS FIXED CAPITAL FORMATION GROSS NATIONAL PRODUCT GDP GDP PER CAPITA GDP PER CAPITA PPP PREVIOUS HIGHEST LOWEST FORECAST UNIT 2013-09-30 3.20 7.60 -6.30 1.64 2013-12-31 PERCENT 1.80 2013-09-30 2.30 7.10 -2.70 2.17 2013-12-31 PERCENT 1994585.00 2013-08-15 1990901.00 1994585.00 5495.00 2032473.07 2013-11-30 ZAR MILLION 401802.00 2013-08-15 398743.00 406805.00 46980.00 412663.81 2013-11-30 ZAR MILLION 2050458.00 2013-08-15 2056326.00 2056326.00 355030.00 2076876.38 2013-11-30 ZAR MILLION 384.31 2012-12-31 401.80 401.80 7.34 393.96 2013-12-31 USD BILLION 6003.46 2012-12-31 5923.99 6003.46 3394.93 6095.43 2013-12-31 USD 10959.74 2011-12-31 10520.03 10959.74 4183.73 10995.25 2012-12-31 USD 14
    15. 15. 15
    16. 16. ACTUAL PREVIOUS HIGHEST LOWEST FORECAST DATES UNIT FREQUENCY 24.70 25.60 31.20 21.90 23.53 | 2013/12 2000 - 2013 PERCENT QUARTERLY 19
    17. 17. In the third quarter of 2013, South African jobless rate decreased to 24.7 percent, the lowest value in almost two years. The number of people without work went down to 4.66 million, down from 4.72 million in the previous three months. 21
    18. 18. Emerging Markets Opportunity Index Source: Grant Thornton SA Latest publication date: February 2013 South Africa's ranking: 14 out of 26 countries Global Competitiveness Index Source: World Economic Forum Latest publication date: September 2013 South Africa's ranking: 53 out of 148 countries It took over Brazil to take second place among the BRICS' economies, with China at 29 and Brazil dropping to 56th place (from 48). Doing Business report Source: World Bank and International Finance Corporation Latest publication date: September 2012 South Africa's ranking: 39 out of 185 countries 22
    19. 19. Economic freedom Source: The Heritage Foundation Latest publication date: January 2013 South Africa's ranking: 74 out of 177 countries Moderately free Economy 23
    20. 20. SOCIAL 24
    21. 21. RSA on Human Development Index 25
    22. 22. HOFSTEDE 61 LTO 118 65 30 UAI 95 40 76 49 Russia 36 56 MAS 49 39 20 IDV India 66 China 63 Brazil RSA 48 38 65 77 PDI 69 49 0 20 40 60 80 93 80 100 120 26
    23. 23. Multiethnic society. 11 official languages, highest number of any country in the world. About 80 percent of South Africans are of black African ancestry The remaining population consists of Africa's largest communities of European, Asian, and multiracial ancestry.  Constitutional democracy, which comprises a parliamentary republic and nine provinces.  Rainbow Nation concept. 27
    24. 24. 28
    25. 25. Corruption Perceptions Index Source: Transparency International Latest publication date: November 2012 South Africa's ranking: 69 out of 176 countries Global Gender Gap Index Source: World Economic Forum Latest publication date: 2012 South Africa's ranking: 16 out of 135 countries Press freedom South Africa is the secondSource: Reporters Without Borders highest ranking African Latest publication date: January 2013 country, after Lesotho at 14. South Africa's ranking: 52 out of 179 countries 29
    26. 26. Cost of living Source: Mercer Latest publication date: June 2012 South Africa's ranking: Johannesburg rated 154 and Cape Town 179 out of 214 cities Johannesburg has been rated as one of the most affordable city in the world for foreigners in the Worldwide.Cost of Living survey, regarded as the world's most comprehensive study of this type.Out of 214 cities on five continents, Johannesburg was found to be almost three times cheaper than the most expensive city, Tokyo. 30
    27. 27. Expat experience Source: HSBC Bank International Latest publication date: November 2012 South Africa's ranking: 6th best out of 26 countries South Africa is one of the best countries in the world to live in, according to a global survey of more than 5 100 expatriates. Dream destination Source: WAYN Latest publication date: May 2013 South Africa's ranking: 1 out of 7 South Africa was named as the top dream destination in the world by members of the world's largest travel and lifestyle social network, Where Are You Now (or WAYN.com). 31
    28. 28.  African Union (AU), and has the largest economy of all the members.  It is also a founding member of the AU'sNew Partnership for Africa's Development(NEPAD). Commonwealth of Nations. The country is a member of the Group of 77 Southern African Development Community South Atlantic Peace and Cooperation Zone  Southern African Customs Union Antarctic Treaty System World Trade Organization International Monetary Fund  G20 G8+5 BRICS 32
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    30. 30. World-class infrastructure World-class infrastructure: Modern transport network Widely available energy Sophisticated telecommunications facilities. South Africa’s success in hosting the world’s largest sporting event, the 2010 FIFA World Cup, has shown that the country is capable of undertaking – and successfully completing – major projects on time. 34
    31. 31. IT industry competitiveness index Source: Economist Intelligence Unit Latest publication date: 2011 South Africa's ranking: 47 out of 66 countries South Africa ranks 47th out of 66 countries measured in the 2011 IT industry competitiveness index, with a score of 35 out of a possible 100. 35
    32. 32. 1) Durban. 2) Richards Bay 3) Cape Town 4) Port Elizabeth 5)Saldanha Bay 6) South Africa's only river port, East London, is situated at the estuary of the Buffalo River in Eastern Cape province. Two other coastal cities-Simonstown, south of Cape Town, and Mossel Bay, between Cape Town and Port Elizabeth. 36
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    35. 35. 1. Cape town 2. Johannesburg 3. Durban 4. Pretoria 5. Port Elizabeth 6. Bloemfontein 7. Nelspruit 8. Pietermaritzberg 9. Kimberley 10. Polokwane 39
    36. 36. • • • • Mainly mining- platinum and gold Automotive Tourism Electronics Around 90% of World’s Platinum reserves are found in RSA 40
    37. 37. Agriculture as a percentage of GDP is around 2%. This implies that the economy is maturing, moving towards the secondary and tertiary sectors. 638 000 people formally employed (Statistics SA, 2012 Q2) – although it’s estimated that around 8,5-million people are directly or indirectly dependent on agriculture for their employment and income. 41
    38. 38. The sector's significance is largely because of its potential to create jobs, and is a key focus of the New Growth Path, a plan by the government to create 5-million new jobs by 2020. Plans include programmes to promote commercially oriented small-scale farming. Support is also available to smallholders on land acquired through land reform. 42
    39. 39. Aquaculture (fish farming) Priority sector Large potential for job creation Scales up to meet increasing domestic demand. In general, greater focus is being paid to processed goods and domestic processing capabilities to help boost the value of exports 43
    40. 40. Counter-seasonality to Europe Vast biodiversity and marine resources Competitive input costs World-class infrastructure The processing of freshwater aquaculture Mariculture Exotic and indigenous meats, nuts, herbs and fruit. Wines Confectionary Natural fibres 44
    41. 41. It contributed R280-million to the GDP in 2011, which is 20% of the total amount generated by the manufacturing sector. It is the third largest contributor to GDP within the sector, after chemicals and metals (Statistics SA, 2012). 45
    42. 42. 46
    43. 43. Relatively small contribution to economy Just 13.3% of jobs and 15% of GDP.  Labour costs low, The cost of the transport, communications and general living is much higher. After a steep decline of 10.4% in 2009, the manufacturing sector performed well in 2010, growing by 5% 47
    44. 44. Accounts for about 10% of South Africa's manufacturing exports Contributes 7.5% to the country's GDP and employs around 36,000 people. Annual production in 2007 was 535,000 vehicles, out of a global production of 73 million units in the same year.  Vehicle exports were in the region of 170,000 units in 2007, exported mainly to Japan (about 29% of the value of total exports), Australia (20%), the UK (12%) and the US (11%). South Africa also exported ZAR 30.3 billion worth of auto components in 2006. 48
    45. 45. Production plants in South Africa: BMW Ford Volkswagen Daimler-Chrysler General Motors Toyota Component manufacturers with bases in the country:  Arvin Exhaust  Bloxwitch  Corning  Senior Flexonics. About 200 automotive component manufacturers in South Africa, and more than 150 others that supply the industry on a non-exclusive basis.. 49
    46. 46. The industry is concentrated in two provinces: The Eastern Cape Gauteng. Companies producing in South Africa can take advantage of the low production costs and the access to new markets as a result of trade agreements with the European Union and the Southern African Development Community 50
    47. 47. 51
    48. 48. According to the WEF: South Africa does well on measures of the quality of its institutions (ranking 41st overall) Intellectual property protection (18th ) Property rights (20th) Efficiency of its legal framework in challenging (13th). Settling disputes 12th 52
    49. 49. World-class, progressive legal framework. Legislation pertaining to commerce, labour and maritime issues is particularly well developed. Laws relating to competition policy, copyright, patents, trademarks and disputes conform to international norms and conventions. The independence of the judiciary is guaranteed by the Constitution. 53
    50. 50. Trade and industry is undertaken within the framework of a free enterprise economy The courts are open to foreigners on exactly the same terms and conditions as South African citizens. South African banking regulations rank with the best in the world, while the sector has long been rated among the top 10 globally. 54
    51. 51. The JSE Limited rates among the top 20 stock exchanges in the world by market capitalisation. The JSE's rules and their enforcement are based on global best practices. JSE has harmonised its listing requirements, disclosure and continuing obligations with those of the London Stock Exchange (LSE) and offers superb investor protection. 55
    52. 52. Amended company law, which eliminated many requirements and simplified the incorporation document. redundant It also reduced the number of days required to register property and simplified business exit regulatory requirements Import tariff has been reduced significantly, so as the tax on international trade and transactions 56
    53. 53. Besides other African countries—include Germany, the United States, China, Japan, the United Kingdom and Spain. Chief exports include corn, diamonds, fruits, gold, metals and minerals, sugar, and wool. Machinery and transportation equipment make up more than one-third of the value of the country’s imports. Other imports include chemicals, manufactured goods, and petroleum. 57
    54. 54. Exports $101.2 billion (2012 est.) Export goods gold, diamonds, platinum, other metals and minerals, machinery and equipment Main export partners China14.5% United States 7.9% Japan 5.7% Germany 5.5% India 4.5% United Kingdom 4.1% (2012 est.) Imports $106.8 billion (2012 est.) Import goods machinery and equipment, chemicals, petroleum products, scientific instruments, foodstuffs Main import partners China 14.9% Germany 10.1% United States 7.3% Saudi Arabia7.2% India 4.6% Japan 4.5% (2012 est.) FDI stock $73.6 billion (31 December 2011 est.) 58
    55. 55. The value of imported goods in South Africa is $106.8 billion (2012 est), and the value of exported goods is $101.2 billion (2012 est) Imported goods: machinery and equipment, chemicals, petroleum products, scientific instruments, foodstuffs Exported goods: gold, diamonds, platinum, other metals and minerals, machinery and equipment 59
    56. 56. Exports
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    60. 60. Procedure Time to Complete Number Associate of Days d Cost Register at the Companies and Intellectual Property Commission (CIPC) Open a bank account 5-7 days 1-2 days ZAR 175 No charge Register for income tax, VAT, and employee withholding tax (PAYE and SITE) at the South African Revenue Service (SARS) 12 days No charge 4. Register for unemployment insurance at the Department of Labor 4 days (simultaneou swith procedure 4) No charge 5. Register with the Commissioner in deference to the Compensation for Occupational Injuries and Diseases Act Around 10 days simultaneous with 64 Procedure 4 no charge
    61. 61. Local Currency Foreign Currency Country Rating Rating Assesment Federative Republic of Brazil A- BBB A- Russian Federation BBB+ BBB BBB Republic of India Peoples Republic of China Republic of South Africa BBB- BBB- BBB+ AA- AA- AA- A- BBB A65
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    64. 64. Population 10 million people Economy 67% ( R1100 bn to R1834 bn) GDP per capita 28% ( R28 536 to R36 591) Real Disposable income 32% ( R17 775 to R23 569) SA withstands global downturn Robust financial institution; and Moderate external debt Current world economic impact on SA Driving away potential & existing investors Investors become more risk averse move assets from emerging markets to safer investment environments SA and the global economy Slowdown in global demand Rand will experience a prolonged depreciation E.g. Slowdown in Chinese economy (larger trading partner) Cost push inflation(food and oil prices ) negative impact on SA economy New member of BRICS SA ranked amongst the best in the world in; Financial sector, strength in reporting & auditing standards, protection of investors rights Large sized economy
    65. 65. A challenging environment Actual Estimate 2010 2011 Structural changes seen in SA Forecast 2012 2013 2014 Final household consumption 3.7 4.9 3.6 3.8 4.2 Final government consumption 4.9 4.6 4.1 4.1 4.1 Gross fixed capital formation -1.6 4.3 4.1 4.5 6 Gross domestic expenditure 4.2 4.1 3.9 4.2 4.9 Exports 4.5 6 2.9 5.8 6.6 Imports 9.6 9.4 7.2 7.1 8.3 Real GDP growth 2.9 3.1 2.7 3.6 4.2 Headline CPI inflation 4.3 5 6.2 5.3 5.1 • Significant shift towards service sectors, major contributor to GDP • Finance, real estate and business services sector grown from 16% to over 20% of GPD • Decline in the role of mining and agricultural sectors • 12% of the country is suitable for planting crops rethink approach to agriculture to improve food security • Hold worlds largest reserves of gold, platinum, chrome ore and magnesium ore
    66. 66. South African competitiveness relative to peers Overall ranking 4th Market size 9th Macro environ ment 6th Instituti ons 1st Competiti veness ranking to peers Labour market efficien cy 8th Health and primary educatio n 9th Infrastr ucture ranked 5th
    67. 67. Positive impact on FDI’s South African competitiveness relative to peers Ineffective Government bureaucracy Inadequate Educated workforce Restricted Labour regulations SA Problematic factors for doing business Corruption Crime Theft
    68. 68. Tackling unemployment, poverty and education Unemployment • Unemployment rate dropped from 31% (2005) to 23.9% (2011) • Two key trends • Discourage work seekers, • High rate of youth unemployment, 71% of unemployed are aged between 15-34 years. Education Poverty • Poor quality of education • Literacy and numeracy test scores remains low by African and global standards • Government dedicates 6% of GDP to education • SA’s teachers are amongst the highest paid in the world • SA considered an under- middle income country • 39% of population lives under the poverty line of R418 per person per month Governments plan • NPC plans to reduce the number of people living under the poverty line to zero by 2030 • Create 11 million jobs in 20 years • Improve education system
    69. 69. The State of the Nation Address, 2012/13 Budget 9 key issues within the South African economy Job creation Infrastructure expansion 5 major infrastructure programmes Transition to a low carbon economy Geographicallyfocused Transformation of urban and rural spaces Education and training Building a capable state Fighting corruption Providing quality health care Transformation and unity Mining, transport Integrated approach & agriculture R4.8 billion was allocated to expanded public works programme and the New Jobs fund that began operating in June of 2011, received over 2500 applications and committed over R1 billion in allocations to various projects.
    70. 70.  World’s richest country in terms of its mineral reserves  World’s largest producer of platinum, chrome, vanadium and manganese, the third-largest gold-miner, and offers highly sophisticated mining-related professional services, contributing significantly to the BRICS resource pool.  Third largest coal exporter
    71. 71.  Globally recognized financial market development and sophistication  The regulation of the Johannesburg Stock Exchange was ranked 1st in the world  South Africa is ranked 2nd for both the soundness of banks and the efficacy of corporate boards.  Over the past decade, substantial increases in government social service and infrastructure development. (R642 Billion in last 3 years)
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    82. 82. www.southafrica.info/business/economy/globalsurveys.htm#.UtVy__QW0ms 9/12 www.southafrica.info How the world rates south africa report Global competitive index report 2013 Africa Competitiveness index report Doing business report: World Bank www.doingbusiness.org Emerging Markets opportunity index report: Grant Thorton Economic freedom report by The Heritage Foundation www.heritage.org IT industry competitiveness index: Economist Intelligence Unit www.globalindex.bsa.org Corruption Perceptions Index : Transparency International www.transparency.org en.rsf.org www.expatexplorer.hsbc.com www.wayn.com MediaClubSouthAfrica.com http://www.statssa.gov.za/keyindicators/gdp.asp 94
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