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SOUTH AFRICA: BEYOND THE ECONOMIC GLOOM Presented by SADIQ JAFFER TRADE AND INVESTMENT SOUTH AFRICA

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SOUTH AFRICA: BEYOND THE ECONOMIC GLOOM Presented by SADIQ JAFFER TRADE AND INVESTMENT SOUTH AFRICA

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    1. SOUTH AFRICA: BEYOND THE ECONOMIC GLOOM Presented by SADIQ JAFFER TRADE AND INVESTMENT SOUTH AFRICA

    2. South African Economy

    3. South Africa is one of the most sophisticated and promising emerging markets, offering a unique combination of highly developed first world economic infrastructure with a vibrant emerging market economy. South Africa is one of the worlds 26 industrialised nations. South Africa has the largest economy on the African continent, accounting for approximately 25% of the continents GDP. According to the World Bank, South Africa ranked 34th in the world for the ease of doing business in 2010. The JSE Securities Exchange is Africas largest and most developed Securities Exchange and one of the worlds top 20 exchanges. South Africa remains the worlds top producer of minerals such as gold, platinum, rhodium, chrome, manganese and vanadium. South Africa holds 80% of global manganese reserves, 72% of chrome, 88% of platinum-group metals (PGMs), 40% of gold and 27% of vanadium. Unit labour costs in South Africa are significantly lower than those of many other emerging markets. South Africa from a global perspective

    4. Global FDI (Jan 03 Jul 09)

    5. Global FDI Time Series Analysis

    7. FDI into Africa (Jan 03 Jul 09)

    8. FDI into Africa Time Series Analysis

    9. FDI into Africa Source Market Analysis

    10. FDI into Africa Industry Analysis

    11. FDI into Africa Destination Market Analysis South Africa remains the top destination in terms of no. of FDI projects into Africa. However the market share has decreased from 18% in 2003 to 15% in 2009 to date. Nigeria is the top spot in terms of Capital Investment, while Morocco received the most Jobs created. South Africa ranks 3rd in jobs created and 7th in capital investment received over the time period. When comparing market share between 2008 and 2009 to date South Africa has maintained its share of no of projects, capital investment and jobs created in the whole of Africa. South Africa remains the top destination in terms of no. of FDI projects into Africa. However the market share has decreased from 18% in 2003 to 15% in 2009 to date. Nigeria is the top spot in terms of Capital Investment, while Morocco received the most Jobs created. South Africa ranks 3rd in jobs created and 7th in capital investment received over the time period. When comparing market share between 2008 and 2009 to date South Africa has maintained its share of no of projects, capital investment and jobs created in the whole of Africa.

    12. FDI into South Africa (Jan 03 Jul 09)

    13. FDI into South Africa Time Series Analysis

    14. FDI into South Africa Source Market Analysis

    15. FDI into South Africa Industry Analysis (sector)

    16. FDI into South Africa Industry Analysis (activity)

    17. South Africa Global Economic Powerhouse Economy larger than Czech Republics Labor force larger than Romania, Czech Republic or Portugal Highest expenditure on tertiary education in Africa More inward investments in R&D than any other country in Africa Patents applications by foreign companies over double the number of the Czech Republic

    18. South Africa Global Economic Powerhouse ICT spending at $25 billion is more than Czech Republic, Romania or Hungary Highest internet and PC penetration in Africa Nearly 6,000 Software & IT companies more than Romania More life sciences investments than any other country in Africa Save two third on labour costs, compared to Europe, for manufacturing jobs

    19. South Africa Global Economic Powerhouse Financial Times data on inward investment shows that South Africa is: #1 country for R&D inward investment in Africa #1 country for environmental technology inward investment in Africa #1 country for ICT & Electronics inward investment in Africa #1 country for financial services inward investment in Africa #1 country for creative industries inward investment in Africa #1 country for transport equipment inward investment in Africa #1 country for life sciences inward investment in Africa

    20. General Business Environment Among the most stable emerging markets- with lower external debt than anywhere in Africa or Eastern Europe Lowest social security and tax payable by business than anywhere in Africa or Eastern Europe One of the lowest costs of establishing a business a third the cost of Egypt Property rights are clear and protected- much more so than in Hungary or Czech Republic

    21. South Africa benefits from extremely low tax rates and social security compared to competing locations in Africa and Easter Europe. South Africa has among the lowest costs of establishing a business in Africa and many other emerging locations. Property rights are also well defined in South Africa The credit rating in South Africa is rated as one of the best in the world. South Africa has among the lowest business costs of emerging terrorism

    22. Labour Availability and Quality Huge labour pool to choose from, with high unemployment levels Flexible labour market with low firing costs- about 4 times better than Egypt Educated labour force expenditures on tertiary education higher than Czech Republic or Hungary Huge talent pool - More top 500 universities than the rest of Africa

    23. South Africa has a huge labour force of over 15 million people. The unemployment rate is over 20% meaning there is a large pool of labour for new investors to choose from Tertiary education expenditure relative to GDP is double that of locations in Eastern Europe such as Romania, Hungary and Poland. South Africa has more of the worlds top universities than anywhere else in Africa and most of Eastern Europe South Africa has among the lowest firing costs in Africa and Eastern Europe, indicating the flexibility of doing business in South Africa

    24. Labour Costs Highly competitive labour costs Save typically two-thirds of labour costs compared to Europe for manufacturing jobs Save typically half of labour costs compared to Europe for professional jobs Labour costs similar to levels to countries in Eastern Europe

    25. Research and Development Highest patents by foreign companies in the region, and more than double Czech Republics Highly rated scientific and research institutions License and royalties more than the rest of the region combined and nearly three times more than Czech Republic More foreign companies have established R&D in South Africa than any other country in Africa

    26. South Africa has among the highest R&D and innovation levels among Eastern Europe and Africa and is the dominant hub for R&D in Africa. In terms of patents from foreign companies (which shows the innovation arising from R&D in South Africa), South Africa has more than double the number of patent applications than anywhere else in Africa South Africas scientific research institutions and research and training services availability are highly regarded by investors South Africa is ranked the number one location in Africa. South Africa has more royalty and license fee receipts than major countries in Eastern Europe or Africa With a strong R&D base, South Africa is very attractive for companies to establish R&D and related facilities in Africa. South Africa is the leading location in Africa for inward investment in R&D operations.

    27. Presence of Industrial Clusters Regional leader in environmental technologies World class ICT sector- more than double the expenditure of Hungary The largest financial services hub for the region Largest transport equipment cluster in Africa Major creative industries centre Largest life science centre in the region

    28. Environmental technology sector South Africa is the leading location for environmental technology and energy investment projects in Africa. Together with South Africas strong industrial sector, it is a prime location for environmental technology investment and related manufacturing projects Financial services South Africa is the leading centre for financial services in Africa, with over 18,400 financial services companies located here. South Africa has also attracted more financial services FDI than any other country in the region

    29. ICT sector size of market and track record South Africa is the leading ICT centre in Africa. Expenditure on ICT in the South African economy is over $25 billion more than any other country in Africa. South Africa has attracted more ICT & Electronics FDI projects than any other country in Africa With over 5,800 companies, South Africa has over five times the number of Software & IT companies than Egypt, Morocco or Tunisia combined. South Africa also has more communications companies than any other country in Africa

    30. Automotive South Africa is the hub for the automotive industry for Africa, with some 764 automotive companies more than triple that of Egypt, Morocco or Tunisia Non-automotive transport equipment and electronic components South Africa has the strongest transport equipment industry in Africa with 278 companies in non- automotive transport OEM. South Africa also has the highest number of companies in the related electronic components sector within Africa

    31. Life sciences South Africa has a strong life sciences cluster with over 223 biopharma companies the highest number in the region. South Africa is also the most successful country in the region for attracting inward investment in the life sciences sector Creative industries, leisure and entertainment With its creative workforce, major economy and attractiveness for tourism, South Africa has a very strong creative industries cluster. South Africa has more than 3,300 companies in leisure and entertainment. South Africa is the best performing country in the region in attracting inward investment projects in creative industries, demonstrating the strength of South Africa for the diverse investment opportunities in this sector

    32. Infrastructure and Accessibility World class ICT infrastructure with good upload/download speeds and internet penetration By far the largest road and rail transport system in Africa and much of Eastern Europe Largest cluster of air transport and water transport companies in Africa

    33. ICT infrastructure internet and computer penetration South Africa has the most advanced ICT infrastructure in Africa. Internet and personal computer penetration is the highest in the region ICT infrastructure internet speed South Africas internet infrastructure is the best in region, with upload and download speeds much higher than other economies. This helps to make South Africa an ideal location for investment in Software & IT, Data Centres, Creative Industries and other activities involving high internet usage ICT infrastructure internet infrastructure South Africa has the highest number of secure internet servers in the region

    35. the dti Call Centre: 0861 843 384 the dti Switchboard: +27 12 394 0000 Investment Promotion: +27 12 394 1333/1339 Website: www.thedti.gov.za E-mail: investmentsa@thedti.gov.za Postal Address: Private Bag X 84 Pretoria 0001 South Africa

    36. THANK YOU

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