Fast facts on investing in South Africa

South Africa’s sophisticated banking system, diverse manufacturing base and wealth of natural resources make it one of the best emerging market investment destinations. Its position at the foot of Africa allows investors to move into Africa, a market of a billion people.

South Africa has a wealth of natural resources. (Image Brand South Africa)

A host of government investment incentives and industrial financing interventions are aimed at encouraging commercial activity and the country’s trade rules are indicative of the country’s ‘open for business’ ethos.

  • Through InvestSA a division of the dti South Africa offers a One Stop Shop (OSS) service to all investors. The One Stop Shops is a focal point of contact for all investors to coordinate for all investors to coordinate and facilitate the relevant government departments involved in regulatory, registration, permits and licensing.

The OSS will significantly shorten and simplify administrative procedures and guidelines for the issuance of business approvals, permits and licences and thereby remove bottlenecks faced by investors in establishing and running business.

  • The ruling party had a smooth leadership transition in December 2017 and outlined policies for the next 5-year cycle. The conference stressed deeper and broader economic participation. The successful conference provides certainty that South Africa is open for investment and this is reflected in the strengthening of the currency.
  • South Africa is the No.1 diversified economy in Africa. (IMF 2016) and is also the best manufacturing destination and the most industrialised country in Africa. It is the regional manufacturing hub, with favourable market access and is an export gateway to Africa. The Tripartite Free Trade Area offers a regional market of 26 countries with a population of 625 million and combined GDP of US $ 1.6 trillion.
  • South Africa is one of the best investment destinations in Africa and one of the top investors on the continent.
  • South Africa has several favourable trade agreements:
Agreement Name Type of Agreement Countries Involved

 

Southern African Customs

Union

Customs Union South Africa, Botswana, Lesotho

Swaziland

     
Southern African Development Community (SADC) FTA Free Trade Agreement 15 SADC member states
     
Economic Partnership Agreements FTA SACU- EU EPA plus Mozambique and Angola
     
EFTA-SACU (FTA) FTA SACU + EFTA (Iceland, Liechtenstein, Norway and Switzerland
     
Africa Growth & Opportunity Act (AGOA) Unilateral assistance measures

(non- reciprocal)

US- 39 sub-Saharan African countries
     
Generalised System of Preferences Unilateral

(non-reciprocal)

SA- EU, Norway, Switzerland, Russia, Turkey, the US, Canada, Japan
     
SACU-Mercosur Preferential Trade

agreement

 

SACU and Argentina, Brazil,

Paraguay and Uruguay

 

  • South Africa has an advanced financial services sector and banking sector. (WEF Global Competitiveness Report).
  • South Africa has a mature, accessible legal system providing certainty and respect for the rule of law.
  • Ranked No.1 in Ernest and Young’s Africa Attractiveness survey 2016, South Africa is the investment location of choice for multi-nationals.
  • South Africa ranks No. 27 for its domestic market size. (WB 2016/17 Global Competitiveness Report). The Continental Free Trade Area (CFTA) will bring together 54 African countries with a combined population of more than one billion people and a GDP of more than US $ 3.4 trillion.

 

  • South Africa has world class infrastructure with the most advanced transport infrastructure in Africa. It has the largest air, rail and port networks on the continent. South Africa has efficient ports equipped with ship to shore cranes and other support handling equipment.
  • South Africa is ranked No 1 in Africa, on the World Bank’s Logistics Performance Index.(World Bank, 2017)

  • The Port of Durban is Africa’s most active general cargo port with a 2.6 million TEU capacity. It is situated a block away from Durban’s central business district and plays a key role in S.A’s economy.

  • South Africa is the designated rail manufacturing hub to the African Union.
  • South Africa hosts several automotive brands and is a key player in the global automotive production network. The industry’s emergence on the world stage has been driven by the significant investments for expansion by BMW, Mercedes, Volkswagen and more recently, Beijing Automotive International Corporation. Original Equipment manufacturers (OEM’s) such as BMW and Mercedes have won global production and quality awards for their assembly plants in South Africa.
  • South Africa ranks No.1 in the Global Innovation Index 2016 for most technologically advanced country in Africa.
Antenna of the SKA array. (Image: Wikimedia)
  • South Africa is one of two hosts countries of the Square Kilometre Array (SKA) telescope with Australia and as such will host the core of SKA-mid, the mid frequency dishes of the SKA.
  • South Africa has also designed and is building the MeerKAT– one of three precursor telescopes to the SKA. South Africa is involved in 7 of the 11 SKA consortia.
  • List of South African innovations…
  • CAT Scan
  • Oil from Coal (Sasol)
  • Heart Transplant
  • Kreepy Krauly
  • Pratley’s Putty
  • Dolosse
  • Q20
  • Retinal Cryoprobe
  • Smart Lock Safety Syringe
  • Underground Mining Technology
  • Full Body High Speed Radiology Solution

  • South Africa has the most developed retail sector, with the most consumers shopping in formalised retail. (PwC, 2016)
  • South Africa has the largest and most affluent consumer market. (Deloitte, 2016).
  • The Johannesburg Stock Exchange is Africa’s largest stock exchange by market capitalisation. It is Africa’s only full serviced securities exchange, connecting buyers and sellers in a variety of different markets, namely equities, equity derivatives, agricultural derivatives and interest rate instruments.

  • South Africa is abundantly endowed in precious metals; it is ranked the world’s leading producer of platinum and manganese, is ranked No.2 in the production of palladium and titanium, and is the 6th largest producer of gold according to the US Geological Survey (2016).
  • There are over 110 listed mining companies with operations in South Africa.
  • South Africa has been named the “Offshoring Destination of the Year” at the 2016 Global Sourcing Association (GSA) Awards.
  • South Africa is also a leading services destination for blockbuster movie productions in Africa, by Disney, Warner Brothers and Sony.
  • South Africa hosts 2 of the top 200 Universities in the world, namely, University of the Witwatersrand and University of Cape Town. (Times Education World University Rankings 2017).
  • Johannesburg, Durban and Stellenbosch are rated best cities for investment expansion of international companies in the biotechnology sector. (Financial Times, 2017).
  • South Africa is renowned for having one of the most progressive Constitutions in the World and an independent judiciary.
  • South Africa is ranked No. 1 in Africa for the protection of investment and minority investors. (World Bank, 2017).
  • South Africa is ranked No. 1 in Africa for gender equality on the African Development Bank Gender Equality Index. (AfDB, 2016).
  • South Africa proactively promotes the empowerment of women and gender equity in terms of access to land and the enforcement of contracts. (World Bank, 2017).
Given its favourable climate conditions, South Africa is more than adequately suited to take advantage of wind and solar energy. With almost 100 projects across the country, either fully operational or in the planning stages, South Africa has an opportunity to use renewable energy as an economy grower. Pictured is the Darling Wind Farm on the Western Cape coast. (Image: Wikipedia)
  • South Africa ranked No.5 in the Global Climate Scope Report.
  • South Africa is one of the most generously endowed geographic solar hotspots in the world and ranks no.10 in the world for harnessing renewable energy from the sun, Its Renewable Energy Independent Power Producer Procurement Program. (Wiki-Solar 2016) has earned global plaudits.
  • The UN World Tourism Organisation ranks South Africa no.1 tourism destination in Africa by international arrivals. 2015/2016 Telegraph Travel Awards chose Cape Town as the Best City in the World for the fourth year running.

  • Cape Town has been crowned as the number one city in Africa for business tourism events by the International Congress and Convention Association (ICCA). It is the fourth consecutive win for the city.
  • Cape Town has been named Luxury City Destination of the Year for the second consecutive year in the Luxury Travel Guide Africa & Middle East Awards 2016.
  • South Africa has the longest wine route in the world, the R62 wine route.
  • South Africa is renowned for its exceptional service in the hospitality sector, globally. According to PwC’s Hospitality Outlook 2017-2021, the sector is projected to grow over the next 5 years. The accommodation market in South Africa enjoyed its third consecutive year of strong growth with a 9.1% advance following two years of double-digit gains.
  • Offering 365 days of sporting activities, South Africa’s sport tourism is a well- established and fast-growing sector.
  • Diverse culture, cuisine and sports destination all year round.
  • A population with diverse skill sets and a large pool of emerging talented and trainable labour make South Africa the perfect investment destination.

Would you like to use this article in your publication or on your website? See Using Brand South Africa material.