Macro Economic Stability


The South African government has had mixed success over the last decade in strengthening and developing the country's economy. Gross domestic product (GDP) growth was running at an annualised 4.8% in the second quarter of 2005 (compared to 3.7% in 2004 and 2.8% in 2003).

Consumer inflation has been on a downward trend since 2002, when consumer prices increased to an average 9.3% following the September 11 tragedy in New York. Consumer inflation averaged 6.8% in 2003 and 4.3% in 2004 - compared to 9.8% in 1994.

Prudent fiscal management has seen South Africa's budget deficit come down from 5.1% of GDP in 1994 to 2.3% of GDP in 2004. In the first quarter of 2005, this figure fell to 1.6%, with the SA Revenue Service collecting nearly US$3.5-billion more than expected.

Market Opportunity

One of the greatest reasons why South Africa has become one of the most popular trade and investment destinations in the world is because we make sure that we can meet your specific trade and investment requirements. There are many lucrative possibilities arising from South Africa's wealth of natural resources and almost unlimited export and import opportunities.

TradeInvestSA is a free monthly electronic journal distributed on behalf of the South African Department of Trade and Industry, profiling trade and investment opportunities in South Africa.

Costs of doing Business

The costs of doing business in South Africa compares favourably to other emerging world markets. The costs for labour, land, rental, human resources, transportation and general living expenses do vary from province to province. Gauteng as the economic hub of South Africa is only marginally higher than the other provinces, yet it offers business amenities that have a world class standard.

Skills

South Africa possesses a large resource base of skilled, semi-skilled and unskilled labour. The South African government has introduced wide-ranging legislation to promote training and skills development and to fast-track the building of world-class skill and competence.

A strong network of universities and other tertiary education institutions is home to a host of leading international academics and researchers, with the majority of research and development in South Africa undertaken at the country's universities. Read more

Financial Infrastructure

South Africa is one of the world's favourite emerging markets, offering investors sophisticated financial infrastructures and exceptional investment opportunities. The SA Reserve Bank (SARB) oversees the banking services industry in SA. The non-banking financial services industry is governed by the Financial Service Board (FSB). Sa has three principle financial service markets:

• The JSE Securities Exchange SA (JSE)
  
• The SA Futures Exchange (Safex)
  
• The Bond Exchange of SA (BESA)
  
• The JSE is governed and licensed externally by the Stock Exchange Control Act of 1985. The Safex and BESA markets are governed by the Financial Marketers Control Act of 1989. The markets are self regulated internally. Read more

Transport and Logistics Infrastructure

South Africa boasts one of the most modern and extensive transport infrastructures in Africa. This infrastructure plays a crucial role in the country's economy and is depended on by many neighbouring states. Public company Transnet (a parastatal) is SA's main transport operator and is the holding company for SAA (airways), Spoornet (rail transport), Autonet (road transport), Pertronet (liquid petroleum), Portnet (port authority) and Fast Forwards (container shipments).

Natural Resources

South Africa has huge mineral resources as follows:

• 80% of the world's reserves of manganese ore
  
• 56% of the world's reserves of platinum group minerals
  
• 35% of the world's reserves of gold and
  
• 68% of the world's reserves of chromium.
  

Source: Department of Trade & Industry