Trade & Investment South AfricaDepartment of Trade and Industry   PUMLA NCAPAYIDeputy Director General
INVESTMENT ENVIRONMENT          &BUSINESS OPPORTUNITIES
South Africa fast facts•Area 1,219, 090 km2•Head of the State: President Jacob Zuma•11 Official languages with English the...
South Africa at a glanceIndicator                                           1994              2009Total Population        ...
Strategic Location on Shipping Routes•   South – South Trade•   Important to the BRICS countries•   Vulnerability of the S...
Africa is becoming more attractive...                       Source: Ernst & Young’s 2011 Africa attractiveness survey
Investor’s plans in Africa                             1%                29%                          Withdraw from Africa...
Investing in Africa: an improving environmentThe operating environment is improving visibly and rapidly …• 54 countries, 3...
South Africa- global perspective•   Cape Town was named the top tourist destination in the world in the    2011 Traveler’s...
South Africa - global perspective• Stellenbosch University was the first African university in the world to  design and la...
South Africa’s Competitiveness•   Ranked 50th out of 142 countries in the World Economic Forum’s Global    Competitiveness...
South Africa – emerging market perspective  Of 14 emerging markets; Australia, Canada, Russia, Mexico,  China, Poland, Spa...
South African Economy      Subject Descriptor                                     2005           2010            2015     ...
South African Economy: New Growth PathVision:    Create 5 million jobs          And reduce unemployment to 15 %    in the ...
Industrial Policy Action Plan II1. Macro-economic policies which support more competitive and   stable real exchange and i...
South Africa’s Tops the BRICS for Ease of Doing Business     Country       Overall Rank   Getting credit   Protecting inve...
South Africa’s leading trade partners      South African Exports 2010 – top 10                 South African Imports 2010 ...
South Africa’s export composition   Rank          COUNTRY                               Proportion   Growth    2010       ...
South Africa’s leading investment partners     Investment in South Africa – top 10                      Investment from So...
South Africa’s FDI Composition               Rank                    Sector                     Proportion %              ...
South African Trade Agreements •South Africa – European Union (EU) Trade, Development and  Co-operation Agreement (TDCA) •...
Trade Agreements in Africa            Source: Ernst & Young’s 2011 Africa attractiveness survey
Investment OpportunitiesSector                Sub-sectorBusiness Process      •Call CentresOutsourcing & IT      •Back /of...
Investment OpportunitiesSector                Sub-sectorAgro-processing       Fisheries and aquaculture i.e. freshwater aq...
Investment OpportunitiesSector               Sub-sectorMetal fabrication,   •Downstream processing and value adding of iro...
Investment OpportunitiesSector      Sub-sectorTourism     •Accommodation – hotels, boutique hotels, lodges & resorts      ...
Investment OpportunitiesPower generation    Independent power generation, energy infrastructure & alternative energyand di...
Investment OpportunitiesCreative and Design Industry   Film and Media                               Film studios, treaty f...
Incentives      Incentive                    Benefit                             Main ConditionsThe Enterprise       The E...
Incentives       Incentive                        Benefit                           Main ConditionsSection 12i Tax        ...
Incentives      Incentive                   Benefit                           Main ConditionsBPO & O Investment   The BPO&...
Incentives      Incentive                     Benefit                           Main ConditionsProduction Incentive   Aims...
Coega IDZ & Port Infrastructure
the dti’s Investment Services•    Sector Information•    Finance to explore investment opportunities in SA•    Facilitatin...
Upcoming SlideShare
Loading in …5
×

South African Investment Environment and Business Opportunities

3,135 views

Published on

Presentation to the US-South African Women's Business Forum Chicago by Pumla Ncapayi, Department of Trade and Industry Deputy Director General for Trade and Investment October 24, 2011

Published in: Investor Relations, Business
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
3,135
On SlideShare
0
From Embeds
0
Number of Embeds
3
Actions
Shares
0
Downloads
123
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

South African Investment Environment and Business Opportunities

  1. 1. Trade & Investment South AfricaDepartment of Trade and Industry PUMLA NCAPAYIDeputy Director General
  2. 2. INVESTMENT ENVIRONMENT &BUSINESS OPPORTUNITIES
  3. 3. South Africa fast facts•Area 1,219, 090 km2•Head of the State: President Jacob Zuma•11 Official languages with English the business language•Est. Population: 49,9 million
  4. 4. South Africa at a glanceIndicator 1994 2009Total Population 38,283,223 49,320,150% of Total Population under 15 years 37% 31%Adult Literacy Rate (1990) 76.2 % 88.8%Internet Users 100,000 4,420,300Mobile Telephone Subscriptions 340,000 46,436,000GDP per capita (constant 2005 prices) R 27,400.12 R 37,261.16FDI (net inflows % of GDP) 0% 2%Gross Fixed Capital Formation (% of GDP) 15% 23% Source: World Bank Development Indicators 2010
  5. 5. Strategic Location on Shipping Routes• South – South Trade• Important to the BRICS countries• Vulnerability of the Suez Canal • Political instability • Somali pirates
  6. 6. Africa is becoming more attractive... Source: Ernst & Young’s 2011 Africa attractiveness survey
  7. 7. Investor’s plans in Africa 1% 29% Withdraw from Africa 8% Cant say Maintain operations in Africa 19% Invest in Africa 43% Not invest in Africa Source: Ernst & Young’s 2011 Africa attractiveness survey
  8. 8. Investing in Africa: an improving environmentThe operating environment is improving visibly and rapidly …• 54 countries, 35 democracies (compared to only 8 in 1991)• Many countries have improved their business environment:  restored macro-economic stability  greater predictability & increased reliability of policy & regulatory framework  increased transparency and improved decision-making  privatisation initiatives  reduced corruption  investment protection & promotion  intra and inter-regional initiatives• High returns on investment
  9. 9. South Africa- global perspective• Cape Town was named the top tourist destination in the world in the 2011 Traveler’s Choice Destinations awards.• South Africa is the only African country that is a member of the G20• South Africa is also a non permanent member on the UN Security Council• OR Tambo airport is the best airport in Africa, according to the World Airport Awards 2010/11. It was also in the top 3 most improved airports in the world for the same period• South Africa’s Real GDP growth will quicken from 2.8% in 2010 to 3.2% in 2011 and 4% in 2012, helped by stronger external demand and looser fiscal policy. Source: SouthAfrica.info; Economist Intelligence Unit
  10. 10. South Africa - global perspective• Stellenbosch University was the first African university in the world to design and launch a microsatellite• The Western Deep Level mines are the world’s deepest mines at approaching 4km.• South Africa houses one of the three largest telescopes in the world at Sutherland in the Karoo.• SA has 45 million active cell phones (population 49 million) – ranking in the top 5 globally in terms of cell phone coverage.• South Africa sold $1.8 billion worth of cars to the US in 2010, putting us ahead of Sweden and Italy as suppliers to the US market. Car sales are projected to grow 10% in 2011 to 460,000Source: SouthAfrica.info
  11. 11. South Africa’s Competitiveness• Ranked 50th out of 142 countries in the World Economic Forum’s Global Competitiveness Report. • Highest of Sub-Saharan Countries • 2nd after China in BRICS group of countries• Ranked 1st in strength of auditing and reporting standards• Ranked 1st in regulation of securities exchanges• Ranked 2nd in soundness of banks• Ranked 3rd in protection of minority shareholders’ interests• Ranked 4th in financial market development• Ranked 8th in the legal rights index• Ranked 10th in investor protection• Ranked 25th in the market size pillar• Ranked 30th in intellectual property protection
  12. 12. South Africa – emerging market perspective Of 14 emerging markets; Australia, Canada, Russia, Mexico, China, Poland, Spain, India, Korea, Brazil, SA, Colombia Chile & Argentina South Africa is: • 2nd most sophisticated financial market • 2nd lowest effective business tax rate • 4th ranked for ease of accessing capital • 4th ranked i.t.o. the cost of capital • 6th ranked for infrastructure • 7th for FDI as a % of GDP (2008) • 8th ranked i.t.o labour productivitySource: Brazil National Confederation of Industry. Competition Brazil 2010: A Comparison ofselected countries
  13. 13. South African Economy Subject Descriptor 2005 2010 2015 GDP growth 5.277 2.784 4.5 GDP per capita (constant prices) 33,507 36,730 42,280 Investment (%GDP) 17.958 21.698 20.855 Import volume of goods and services growth (%) 10.879 4.584 6.3 Export volume of goods and services growth (%) 8.568 5.036 6.452 Population (million people) 46.888 49.912 52.979 Source: IMF: World Economic Outlook, April 2011•South Africa positioned as a manufacturing centre of excellence•Diversified Industrial sectors•Open economy•Sound business case for investment and profit•Gateway to Africa and markets of more than 200 Million consumers•Africa is the next big story after China and India
  14. 14. South African Economy: New Growth PathVision: Create 5 million jobs And reduce unemployment to 15 % in the next 10 years
  15. 15. Industrial Policy Action Plan II1. Macro-economic policies which support more competitive and stable real exchange and interest rates2. Industrial financing channelled to more labour-intensive and value-adding sectors3. Leveraging procurement to raise domestic production and employment in a range of sectors4. Developmental trade policies such as tariffs and standards deployed in a selective and strategic manner5. Competition and regulation policies: competitive input costs for productive investments and affordable goods and services for poor and working-class households6. Skills, technology and innovation policies better aligned to sectoral priorities7. Deploying these policies in general and in relation to more ambitious sector strategies, as set out in detailed Cross-cutting and Sector KAPs
  16. 16. South Africa’s Tops the BRICS for Ease of Doing Business Country Overall Rank Getting credit Protecting investors South Africa 34 2 10 China 79 65 93 Russia 123 89 93 Brazil 127 89 74 India 134 33 44 Source: World Bank Group, 2011
  17. 17. South Africa’s leading trade partners South African Exports 2010 – top 10 South African Imports 2010 – top 10Rank Country Proportion Growth Rank Country Proportion Growth2010 Name % Total 2009 - 2010 2010 Name % Total 2009 - 2010 1 China 11.48% 20.28% 1 China 16.89% 14.22% 2 United States 10.08% 25.26% 2 Germany 5.45% 11.35% 3 Japan 9.08% 36.42% 3 United States 0.93% 7.14% 4 Germany 8.34% 31.49% 4 Japan 17.01% 5.34% 5 United Kingdom 5.13% 4.20% 5 Saudi Arabia -11.01% 4.12% 6 India 4.36% 24.23% 6 Iran 4.04% 4.00% 7 Netherlands 3.35% -7.15% 7 United Kingdom 2.30% 3.81% 8 Switzerland 3.28% -21.29% 8 India 33.92% 3.58% 9 Zimbabwe 2.93% 12.53% 9 France 1.58% 2.93% 10 Mozambique 2.68% 5.53% 10 Nigeria 3.10% 2.80% Source: Quantec, 2011
  18. 18. South Africa’s export composition Rank COUNTRY Proportion Growth 2010 Name %Total 2009-2010 1 Basic non-ferrous metals 39.40% 43.19% 2 Basic iron & steel 13.02% 23.75% 3 Motor vehicles, parts & accessories 10.27% 9.19% 4 Machinery & equipment 7.03% 9.91% 5 Basic chemicals 5.73% 11.34% 6 Food 3.67% 4.03% 7 Other industries 3.39% -2.13% 8 Coke & refined petroleum products 2.55% -8.67% 9 Paper & paper products 2.24% 8.03% 10 Other chemicals & man-made fibers 1.95% -3.70%Source: Quantec, 2011
  19. 19. South Africa’s leading investment partners Investment in South Africa – top 10 Investment from South Africa – top 10 2003 - 2010 2003 - 2010 Rank Country Proportion % Rank Country Proportion % 1 United States 17.21% 1 Qatar 18.60% 2 Australia 13.60% 2 China 14.95% 3 UK 11.52% 3 Ghana 14.00% 4 Germany 7.26% 4 Nigeria 8.33% 5 India 6.03% 5 Canada 4.78% 6 Japan 5.00% 6 Mozambique 4.64% 7 Canada 4.59% 7 Indonesia 4.15% 8 Ireland 4.59% 8 United States 3.46% 9 Norway 4.06% 9 Seychelles 2.70% 10 Switzerland 3.91% 10 Iran 2.56%Source: The Financial Times Ltd , 2011 (www.fdiintelligence.com
  20. 20. South Africa’s FDI Composition Rank Sector Proportion % 2003 - 2010 1 Coal, Oil and Natural Gas 25.13% 2 Metals 20.75% 3 Automotive OEM 8.15% 4 Alternative/Renewable energy 7.53% 5 Communications 7.32% 6 Hotels & Tourism 5.49% 7 Real Estate 3.00% 8 Chemicals 2.89% 9 Building & Construction Materials 2.78% 10 Transportation 1.89%Source: The Financial Times Ltd , 2011 (www.fdiintelligence.com
  21. 21. South African Trade Agreements •South Africa – European Union (EU) Trade, Development and Co-operation Agreement (TDCA) •Southern African Development Community (SADC) FTA •Southern African Customs Union (SACU) – India Preferential Trade Agreement (PTA) •Southern African Customs Union (SACU) - European Free Trade Association (EFTA) FTA •Africa Growth and Opportunity Act (AGOA) •SACU – Southern Common Market (Mercosur) Preferential Trade Agreement
  22. 22. Trade Agreements in Africa Source: Ernst & Young’s 2011 Africa attractiveness survey
  23. 23. Investment OpportunitiesSector Sub-sectorBusiness Process •Call CentresOutsourcing & IT •Back /office ProcessingEnabled Services •Shared Corporate Services •Enterprise solutions e.g. fleet management and asset management •Legal process outsourcingElectro Technical •Software & mobile applications •Smart metering •Embedded software •Radio frequency identification •Process control , measurement & instrumentation •Security & monitoring solutions •Financial softwareClothing, Textiles, •Manufacturing of Industrial Textiles using PolyesterLeather and •Production of other natural fibre textiles such as flaxFootwear •Wool and mohair production – downstream opportunities for yarns, knitwear and fabric.
  24. 24. Investment OpportunitiesSector Sub-sectorAgro-processing Fisheries and aquaculture i.e. freshwater aquaculture & marinculture Food processing in the milling and baking industries Beverages viz. fruit juices and the local beneficiation, packaging and export of indigenous teas High value natural fibres viz., organic cotton & downstream mohair production High value organic food for the local and export market Biofuels production viz. biodiesel & bioethanolAutomotives & Engine parts/components, vehicle interiors, electronic drive trainComponents components, body parts, catalytic converters, aluminum forgings & castings, diesel particulate filters and leather productsChemicals and Beneficiation of polypropylene used in automotive components & building andplastic fabrication construction industries, packaging materials Medical (drips & syringes), manufacture of active pharmaceutical ingredient (APIs) for key anti-retrovirals (ARVs) Manufacture of reagents for AIDS/HIV diagnostics Production of vaccines and biological medicines
  25. 25. Investment OpportunitiesSector Sub-sectorMetal fabrication, •Downstream processing and value adding of iron, steel, aluminium,capital and stainless steel ferroalloys and the platinum group of metals (PGM)transport • Conversion processes of metal products i.e. metal fabrication, pipe & tube,equipment foundry products, wire and jewellery •Manufacturing and assembly of mining, agricultural and construction equipment •Utilities i.e. reticulation plants and pipe lines. •Machine tools and tooling (auto, packaging, mining and aerospace industries) •Electrical motors •Services in the engineering, construction sectors •Rolling stock i.e. locomotives, wagons and coaches •Production of permanent ways i.e. railway lines, signalling equipment, electrification, bridges and stations •Harbour construction and equipment •Ship- and oil platform building and maintenance
  26. 26. Investment OpportunitiesSector Sub-sectorTourism •Accommodation – hotels, boutique hotels, lodges & resorts •Urban integrated tourism/ entertainment precincts •Adventure, - eco-, sport-, conference - and cultural tourism. •Infrastructure development. •Leisure complexes & world class golf courses. •Harbour & waterfront developments. •Transfrontier conservation areas. •Tourism transport – aviation, rail, cruise liners etc •Green building and green technologies for tourism •Attractions and activity – based tourism •Museums and heritage •Cultural, music, arts festivals and eventsAerospace •Aviation related services, including maintenance, repair and overhaul (MRO) •Rotary and fixed wing components. •Aviation training services •Specialised manufacturing of avionics, including health usage monitoring systems •Aerostructure components, specifically composites and sheet metal (aluminium and titanium) •Small and micro-satellite capability including sensor platforms •Satellite related services (including tracking and control and applications development) •Specialised design expertise, systems level as well as first tier level. •Unmanned Arial Vehicles (UAVs)
  27. 27. Investment OpportunitiesPower generation Independent power generation, energy infrastructure & alternative energyand distributionRenewable energy Solar water heating, evacuated tube plants, concentrated solar heating,and energy saving wind and biomass energy productionindustriesAdvanced Advanced materials manufacturing viz.Manufacturing Nano-materials •High performance materials based on natural resources (advanced bio- composites) •Composites (intelligent textiles used in medical, building and construction industries) •Continuous fibre reinforced thermoform composites Digital TV and Set Top Boxes due to migration to full digital television as analogue will be switched-off by November 2011. Nuclear Build Programme i.e. joint ventures, consortiums and the establishment of new companies to grow South Africa’s nuclear manufacturing capability and nuclear supply industry to supply into the nuclear build programme Electricity Demand Side Management Solutions to improve electricity efficiency usage.
  28. 28. Investment OpportunitiesCreative and Design Industry Film and Media Film studios, treaty film co-production ventures, distribution infrastructure, servicing of foreign productions. Production of film and documentaries, commercials, stills photography and multi-media Design Jewellery manufacturing and design Fashion design
  29. 29. Incentives Incentive Benefit Main ConditionsThe Enterprise The EIP (manufacturing) is a cash the EIP will be used to stimulateInvestment Program grant for locally based investment within manufacturing and(EIP) manufacturers who wish to tourism, it will also be used to establish a new production deliver on some of the IPAPs key facility, expand an existing facility performance areas, as well as or upgrade an existing facility in priority sectors. the clothing and textiles sectorsForeign Investment To compensate qualifying foreign Foreign investors onlyGrant investors for the cost of moving qualifying new machinery and equipment from abroad to SA.Industrial Exemption from VAT when Prospective IDZ operator companiesDevelopment Zone sourcing goods and services from must apply for permits to develop South African customs territory and operate an IDZ and duty-free imports of raw materials and inputs for export
  30. 30. Incentives Incentive Benefit Main ConditionsSection 12i Tax Tax deductions of up to R 900m Valid until December 2015Allowance depending on status viz. preferred Capital investment > R 200m or qualifying projects. Training allowance/ deduction of up to R30m or R36 000 per employee.Critical Infrastructure Infrastructure projects intended The minimum qualifyingFund to service IDZ, shall qualify for a infrastructure development cost is grant of 30% of the qualifying R15m infrastructure development costThe Location Film & To encourage and attract large Foreign owned qualifying productionsTelevision production budget films and televisionIncentive productions that will contribute towards SA economic development and international profile and increase foreign direct investment
  31. 31. Incentives Incentive Benefit Main ConditionsBPO & O Investment The BPO&O Investment Incentive Local and foreign investorsIncentive comprises an Investment Grant establishing projects that aim and a Training Support Grant primarily to serve offshore clients towards costs of company-specific training. The incentive is offered to local and foreign investorsCompetitiveness Grants are to be used for the Clothing and Textile companies andImprovement following interventions: clustersProgramme World-class manufacturing principles. Training Labour relations and employee wellness programmes Product related Supply chain integration Industrial engineering Competitiveness improvement Bottom line business processes
  32. 32. Incentives Incentive Benefit Main ConditionsProduction Incentive Aims to help the industry upgrade Clothing manufacturers(PI) its processes, products and Textiles manufacturers people. Cut, Make and Trim (CMT) operators Footwear manufacturers Leather goods manufacturers and Leather processors (specifically for leather goods and footwear industries).Automotive A taxable cash grant of 20 percent Motor vehicleInvestment Scheme of the value of qualifying assemblers/manufactures.(AIS investment in productive assets Motor component manufacturers
  33. 33. Coega IDZ & Port Infrastructure
  34. 34. the dti’s Investment Services• Sector Information• Finance to explore investment opportunities in SA• Facilitating direct Government support in the form of:• - information on investing in SA and the Business Environment• - detailed investment Incentives• - investment facilitation• - after care – ongoing contactContact Details• the dti Call Centre: 0861 843 384• the dti Switchboard: +27 12 394 0000• Investment Promotion: +27 12 394 1339/1032• Website: www.thedti.gov.za• E-mail: investmentsa@thedti.gov.za• Postal Address: Private Bag X 84, Pretoria 0001 South Africa

×