South Africa: more fast facts
- Black economic empowerment
- Accelerated & Shared Growth Initiative
- South Africa: gateway to Africa
- South Africa's global companies
- Global companies in South Africa
- South Africa's infrastructure
- South African inventions & innovations
- South Africa's mineral wealth
- South Africa's automotive industry
- Financial services in South Africa
- South African media and film
- Outsourcing to South Africa
- South Africa's manufacturing sector
- South Africa's retail industry
- Visit South Africa
- South Africa's tourism industry
- Business tourism in South Africa
- South Africa's exciting cities
- South Africa: sporting paradise
- The adventure starts here
South Africa's drive to bring the long-excluded majority of its people into the mainstream of economic life is paying healthy dividends
Black economic empowerment (BEE) is pushing the country's growth rate - nearly 5% in 2005 - on to a higher trajectory. It has helped South Africa move ahead of India as a destination for foreign direct investment. It was a factor in the 47% total return on equities traded on the JSE in 2005.
BEE is not affirmative action, although employment equity forms part of it. Nor does it aim to take wealth from white people and give it to blacks. It is simply a growth strategy, targeting the economy's weakest point: inequality.
At the core of the policy is the BEE scorecard, which measures companies' empowerment progress in ownership, management, employment equity, staff training and direct empowerment.
Private companies have to apply the codes if they want to do business with the government - to tender for business, apply for licences and concessions, enter into public-private partnerships, or buy state-owned assets.
Companies are also encouraged to apply the codes in their interactions with one another, as preferential procurement will affect most private enterprises throughout the supply chain.
The National Empowerment Fund, set up to provide capital for BEE transactions, is working on 135 deals worth more than R1-billion.
International investors are increasingly embracing BEE. Fortune 500 company Old Mutual's R7.2-billion BEE deal, launched in 2005, gave half a million South Africans an interest in the company - and boosted share prices.
A 2005 Deutsche Bank deal gave black investors and staff a 25% stake in its South African operations. US investment bank Merrill Lynch announced in 2006 that it will sell up to 15% of its South African business to black staff, women investors and a local educational trust.
Also in 2006, London-based Blackstar Investors announced plans to help fund BEE deals to the tune of £35-million.
Accelerated & Shared Growth Initiative
The Accelerated and Shared Growth Initiative for South Africa (Asgi-SA) is a bold plan by the
government and business to boost the country's growth to 6% and halve poverty and unemployment by 2014.
South Africa's economic growth has been impressive, rising from 3% in the first decade of freedom to nearly 5% in 2005. But to have the desired impact on poverty and unemployment, this growth must be boosted to at least 6% - if not higher.
Economic growth cannot be at any cost: it must be sustainable, and it must be shared. If large numbers of people are excluded from the mainstream economy, the potential for future growth will be seriously obstructed.
In developing Asgi-SA policy, it was concluded that interventions to accelerate must surgically target weaknesses unique to South Africa's economy. Asgi-SA initiatives therefore fall into six broad categories:
- Massive investment in infrastructure
- Targeting economic sectors with good growth potential
- Developing and harnessing skills
- Building up small businesses
- Revamping public administration
- Creating a macroeconomic environment that's good for growth
The government has budgeted US$8.5-billion for infrastructure development until 2008. Of this, about 40% will be spent by public enterprises, mostly electricity utility Eskom and transport company Transnet, and mainly on power generation, power distribution, rail transport, harbours and an oil pipeline.
Asgi-SA has identified two economic sectors deserving priority attention because of their huge potential for growth: business process outsourcing and tourism.
Both industries are labour-intensive, rapidly growing all over the world, suited to South African conditions, and open to opportunities for black economic empowerment and small business development.
Driving skills development is Asgi-SA's Joint Initiative on Priority Skills Acquisition, which works to identify and fill skills gaps in South African industry.
South Africa: gateway to Africa
Not only is South Africa itself an important emerging economy, it is also the gateway to other African markets. The country plays a significant role in supplying energy, relief aid, transport, communications and investment on the continent. Its well-developed road and rail links provide the platform and infrastructure for ground transportation deep into Africa.
Home to 6% of the continent's population, South Africa produces 23% of Africa's GDP, boasts 45% of its mineral production and 50% of its buying power.
Africa GDP by country
South Africa contributes 23% - nearly a quarter - to the combined gross domestic product of Africa's 53 states. Forty-four of these countries contribute 2% or less. (Data source: CIA World Fact Book)
Sub-Saharan Africa GDP by country
South Africa contributes 35% - over a third - to the combined gross domestic product of sub-Saharan Africa's 48 states. (Data source: CIA World Fact Book)
South Africa has the resident marketing skills, distribution channels, and cultural and linguistic know-how imperative for commercial ventures into Africa.
According to a 2003 report by LiquidAfrica Research, South Africa was the largest investor in the rest of Africa between 1990 and 2000, ploughing US$12.5-billion into the continent over the decade.
South African company MTN is the leading mobile-phone operator in Africa, with 500-million people in its footprint area and more than 28-million subscribers. It is also Africa's first-ever global sponsor of the Fifa Football World Cup, with a US$65-million investment in the 2010 tournament.
SABMiller, formerly South African Breweries, is one of the world's largest beverage companies, with major interests in over 60 countries on five continents.
In Africa, it operates in Botswana, Swaziland, Lesotho, Uganda, Tanzania, Zambia, Malawi, Angola, Mozambique, Ghana, Zimbabwe, Algeria and Morocco. Beverage sales across the continent totalled 11.3-billion litres in the 2006 financial year.
Illovo Sugar is Africa's biggest sugar producer, with extensive agricultural and manufacturing operations in South Africa, Malawi, Zambia, Swaziland, Tanzania and Mozambique. Annual sugar output amounts to some 1.9-million tons.
Packaging giant Nampak has embarked on an ambitious programme of expansion into Africa. In 2003 Nampak's global revenue stood at R18.4-billion, and 6% of profits were generated by African operations outside of South Africa in Ethiopia, Kenya, Malawi, Mozambique, Namibia, Nigeria, Swaziland, Tanzania, Zambia and Zimbabwe.
The Shoprite Group is Africa's largest food retailer, with 846 corporate outlets in 17 countries across Africa, the Indian Ocean and southern Asia, and a turnover of R33.5-billion for the 12 months to June 2006.
South Africa's global
companies
South Africa has been fertile soil for a new multinational companies, enterprises rooted deep in the country's rich resources and with branches reaching out across the globe
Forbes magazine includes 23 businesses based or begun here on the Forbes Global 2000, its prestigious annual list of the world's largest companies.
Mining multinational BHP Billiton, which has significant interests in South Africa, Australia and elsewhere, is ranked at 101st on the 2006 list, and financial services group Old Mutual at 185th.
According to Forbes, the Anglo American mining group is the 116th-largest company in the world, with banking conglomerates Standard Bank and First Rand coming in at 285th and 361st, respectively.
Next is synthetic fuels giant Sasol, at 390th place, followed by insurance company Sanlam (454th) and telecommunications parastatal Telkom (589th).
With these 23 top companies, South Africa is far ahead of the rest of Africa in terms of global business. Egypt scored only three firms, and Liberia and Morocco one each.
We're also ahead of, among others, Mexico (with 17 global companies), Russia (14), Saudi Arabia (5), Singapore (14) and Brazil (19). Mainland China has 28 global companies and India 33.
Global companies in South Africa
Since democracy returned South Africa to the world in 1994, global companies have been flocking here to take advantage of the country's vast investment potential.
In the words of to Jim Myers, president of the American Chamber of Commerce in South Africa: "The sophisticated business environment of South Africa provides a powerful strategic export and manufacturing platform for achieving global competitive advantage, cost reductions and new market access."
Almost half the members of the American Chamber of Commerce in South Africa are Fortune 500 companies, and over 90% operate beyond South Africa's borders into southern Africa and across the continent.
The year 2005 shattered all records on the JSE, South Africa's stock exchange, in a boom fuelled by foreign investors buying up R50-billion in local shares, setting a 10-year high for international investment in the exchange.
Nearly 20 years after abandoning apartheid-era South Africa, multinational banking giant Barclays returned in 2005 with a massive R30-million purchase of a majority stake in Absa, one of the country's big-four banks. The historic deal was the biggest single foreign direct investment in South Africa, ever.
German motor manufacturer BMW opened its Rosslyn assembly plant near Pretoria in 1994. The company recently announced a further investment of R2-billion in the facility, allowing it to produce 60 000 units a year - and increasing its South African export capacity to R50-billion over the lifecycle of future models.
The world's largest communications company, Vodafone, announced in November 2005 that it is to increase its stake in South African cell-phone company Vodacom to the tune of R16-billion.
Other major multinationals with major operations here include Volkswagen, General Electric, Acer, Cisco Systems, Microsoft, EDS Corp, Hertz, Levi Strauss, Coca-Cola, Pepsi, and Indian giants Mittal and Tata.
South Africa's infrastructure
South Africa has world-class infrastructure: a modern transport network, low-cost and widely available energy, and sophisticated
telecommunications.
And these are all in line for significant upgrade and expansion up to 2010, when South Africa hosts the Fifa Football World Cup. In its 2006 Budget, the government announced a R8.5-billion investment in infrastructure in preparation for the tournament.
The government has identified massive infrastructure projects as key to boosting the country's economic growth rate and creating employment, and committed billions of dollars to getting the investment ball rolling.
State company Eskom is one of the lowest-cost electricity suppliers in the world. With a network of more than 300 000 kilometres of power lines, the company ranks in the top 10 internationally for size and sales. It supplies 95% of South Africa's energy requirements - and two-thirds of Africa's.
World industrial electricity in 2005
from a representative utility in each country for the supply of 1 000 kilowatt-hours (kWh) for a site with a monthly usage of 450 000 kWh. (Data source: NUS Consulting Group)
Eskom is to spend R48-billion between 2005 and 2010 on building new capacity, with the private sector investing a further R23-billion.
South African company Sasol is the world's largest manufacturer of oil from coal, gasifying the coal and then converting it into a range of liquid fuels and petrochemical feed stocks.
It's no surprise that the country which invented touchtone dialling offers world-class telecommunications, one of the fastest growing sectors in South Africa's economy.
With a 99% digital network and the latest in fixed-line, wireless and satellite communication, South African telecoms are the 23rd most developed in the world, and the most developed in Africa. Three cellular operators provide mobile telephony to over 20-million subscribers.
The leader of IT development in Africa, South Africa is the 20th largest consumer of IT products and services in the world, ranking 18th in terms of internet use.
South Africa has the transport infrastructure of a fully developed country. The roads are world-class, and the air and rail network the largest on the continent.
The major centres are connected by over 9 000 kilometres of tarred and regularly maintained national highways, including over 2 000 kilometres of dual carriageway, and the numbers are increasing steadily.
The Gautrain is a R24-billion state-of-the-art rapid rail network currently under construction in Gauteng. Along its 80-kilometre route, trains travelling at up to 180 kilometres an hour will link Pretoria, Johannesburg, OR Tambo International Airport and Sandton, with a supporting secondary network of buses getting commuters to their destinations in speed and comfort.
South Africa's 10 international airports handle over 200 000 aircraft landings and 23-million passengers annually. OR Tambo International Airport is to spend R3.4-billion upgrading security and facilities ahead of the 2010 Football World Cup, while Durban is to build a brand new airport, at a cost of R2-billion, to cater for the hundreds of thousands of visitors the tournament will attract.
The country's ports provide a natural stopover for shipping to and from Europe, the Americas, Australasia and both coasts of Africa.
South African inventions & innovations
South Africans are innovative problem-solvers. The country's top-class science and technology sector has produced many world firsts, including oil from coal, pioneering steel production,
deep-level mining, and new medical and information technology.
South African company Sasol is the world's first - and largest - oil-from-coal producer. Formed in 1927 to develop technology to extract oil from South Africa's vast reserves of coal, today Sasol supplies 40% of the country's fuel, as well as a range of specialist chemicals.
South Africa's research and development system is by far the biggest in Africa. Spending on R&D increased in 2003/04 to R10,1-billion - 0.81% of GDP. The government aim is to reach 1% of GDP by 2008.
The massive Innovation Hub in Gauteng is a R219-million science and technology park that brings high-tech industry, academia and entrepreneurs together to further improve South African technology.
Modelled on the best tech parks in the world, the creativity-driven centre houses innovative businesses across a range of disciplines, including electronics, ICT, bio-science, and advanced manufacturing sectors such as defence spin-offs and automotive manufacturing.
The computed axial tomography scan, or CAT scan, was developed by South African physicist Allan Cormack and EMI Laboratories' Godfrey Hounsfield. Their achievement secured them the 1979 Nobel Prize in Medicine.
The world's first heart transplant was performed by Dr Chris Barnard in Cape Town on 3 December 1967.
The Southern African Large Telescope (SALT) in the Northern Cape is the largest single optical telescope in the southern hemisphere.
South Africa is at the international forefront of developing the pebble bed modular reactor, a new generation of nuclear power that's safe, clean and, designed on a small-scale modular system, ideal for developing nations.
In 2002 South African internet entrepreneur Mark Shuttleworth, then aged only 28, became Africa's first astronaut. Three years later Google adopted Shuttleworth's Ubuntu software as its in-house operating system.
SAinfo reporter
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