Transcript SOUTH AFRICA OPEN FOR BUSINESS

SOUTH AFRICA
OPEN FOR BUSINESS
Tumelo Nkoane
11 July 2007
emita
 Macro-economic Trends
 Gateway to Africa
 Sectoral Opportunities
Key Messages
 South Africa has a stable macro economic environment, a
strong fiscal position and a range of growing sectors – from
this platform SA is gearing for accelerated growth
 SA is a springboard for companies wanting to do business
in Africa
Economic Growth
Growth has averaged 4% per annum in the past four years and is projected to
increase to 5% for the coming four years.
8.0
Real growth in Gross Domestic Product (GDP)
6.0
4.0
2.0
0
-2.0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
1998
1999
2000
% change on year earlier
2001
2002
2003
2004
2005
2006
% change on previous quarter, annualised
South Africa has experienced 85 months of continuous growth.
Macro-economic Trends
Job Creation
The economy is beginning to generate additional jobs although challenges remain in this regard.
Employed
Unemployed
14000
45%
12000
30%
15%
10000
Unemployed (official)
8000
Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar
2001
2002
2003
Source: Statistics Pack - Presidency
2004
2005
2006
Broad
0%
Sep Mar Sep Mar Sep Mar Sep Mar Sep Mar
2001
2002
2003
2004
2005
2006
Macro-economic Trends
5
Fiscal Situation
Government is in a very strong fiscal position
Budget deficit
0
% of GDP
-2
-4
-6
-8
-10
93|94
94|95
95|96
Source: Statistics Pack - Presidency
96|97
97|98
98|99
99|00
00|01
01|02
02|03
03|04
04|05
05|06
6
Macro-economic
Trends
Inflation
Inflation has stabilised below the 6% target.
Inflation CPI
14
12
10
%
8
6
4
2
0
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
December
Source: Statistics Pack - Presidency
7
Macro-economic Trends
Exports
After an initial drop associated with a rise in the value of the currency, exports are
beginning to grow again.
Exports
40
35
% of GDP
30
25
20
15
10
5
0
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
September
Source: Statistics Pack - Presidency
Macro-economic Trends8
Economic Structure
South Africa’s economy has diversified away from primary commodities
Contribution to National GDP
70
60
Tertiary sector
% share
50
40
Secondary sector (incl Manufacturing)
30
20
10
0
1946
Primary sector (Agriculture and Mining)
1956
1966
1976
December
Source: SARB
1986
1996
2006
Gearing for Growth
Focus Areas of the Strategy
 Increased macro-economic stability
 Increased investment in economic infrastructure
 Sector investment strategies
 Development of skilled labour
 Strengthening the 2nd economy
 Improvement in state organisation and capacity
Macro-economic Trends
The Gateway into Africa
 6% of Africa’s Population
 18% of Africa’s GDP
 45% of Africa’s mineral production
 50% of Africa’s purchasing power
 Dynamic force in SADC
 Driving force in NEPAD
 Extensive road & rail infrastructure which connects with Sub-Saharan
Africa
 Telecoms infrastructure with world-class connectivity and uptime
OUR LOCATION
STRATEGIC GEOGRAPHIC POSITION TO GLOBAL SHIPPING ROUTES
Business Processing and Outsourcing & IT Enabled Services
 Call Centres
 Back Office Processing
Shared Corporate Services
 Enterprise solutions in e.g. fleet management, knowledge management &
asset management
Value Proposition
 SA offers high quality, low cost destination for BPO in stable investment
environment supported by world class infrastructure
 Cultural and product affinity with the UK and Europe
 Public sector commitment made long-term commitment to this sector, so
strong investor support & sustainable reduction in costs over the next few
years
Business Opportunities
Tourism
 Hotels & self-catering holiday resorts
 Adventure, eco-, sport-, conference & cultural tourism
 Infrastructure development
 Leisure complexes & world class golf courses
 Harbour & waterfront developments
 Transfrontier conservation
Competitive Advantage
 SA’s fastest growing industry
 2010 Football World Cup
Business Opportunities
Agro-processing
Industry
Opportunity
Fisheries & aquaculture Freshwater aquaculture & mariculture e.g African catfish; oysters, abalone
Meat Processing
Fruit & vegetable
processing
Processing exotic/indigenous meats e.g venison; ostrich & crocodile
Export of deciduous & subtropical fruits; processing indigenous fruit, baby
vegetables, nuts (pastachio, cashew, macademia); juices
Indigenous teas
Processing & exporting of rooibos & honeybush
Indigenous herbs
Processing for medicinal & cosmetic products
Wine production
Production of wines for export & local markets
Manufacturing & exporting of confectionary e.g baking products, sweets,
chocolates
Processing of natural fibres from e.g. cotton, hemp, sisal, kenaf & pinable for
specialised paper industry
Confectionary
Natural fibres
Business Opportunities
Automotives & components
 Vehicle interiors e.g. natural fibre interior
 Engine parts/components
 Electronic drive chain components
 Body parts e.g. lights, painted plastic components, airbags, glass wire products,
 Aluminium components
 Wheels (steel & aluminium)
 Catalytic converters
 Plastic tool & die manufacturing
Competitive Advantages
 Access to aluminium & steel
 Removal of tariffs into EU
 Competitive tooling costs
Business Opportunities
Chemical & allied Industries
Industry
Opportunity
Organic chemicals
Propylene oxide, food acids (citric, lactic, etc), sorbates & flavourants
Inorganic chemicals
Titanium derivatives, flurochemicals, phosphates, aluminium fluoride
Pharmaceuticals
R&D, clinical trials, active pharmaceutical ingredients, botanical extracts
Other
Titanium benefication (pigment), fluro-chemical production for agriculture, steel
Competitive Advantage
 Abundant mineral feedstock for inorganic chemical manufacturing
 Abundance of agricultural raw materials (sugar, molasses, essential oils –
lavender; khakhi-bush; lemon grass)
Business Opportunities
Clothing, textile & footwear
 Large-scale manufacturing of industrial textiles using polyester
 Wool & mohair production – downstream opportunities for yarns,
knitwear & fabric
 Manufacturing of leather uppers
Competitive Advantage
 World’s largest producer of mohair
 Raw materials to produce any type of leather footwear – bovine;
ostrich; crocodile; game leather
Business Opportunities
Electro-technical industries
 Manufacturing automotive electronics
 Manufacture PC boards for automotive sector
 Upgrading existing microchip manufacturing
 Upgrading existing telecoms equipment
 Power line communications (PLC)
 Niche software engineering
 Opportunities in defence related electronics
 Expansion in pre-payment metering technologies
 Partnering for infrastructure (utilities) related projects in Africa
Competitive Edge
 Leading the world in prepayment technology and standards
 Piloting new innovations
Business Opportunities
Mining & metal-based industries
 Downstream processing & value adding of iron, carbon steel, aluminium &
platinum group metals
 Aluminium smelting
 Casting & forgings
 Ferro-alloys
 Stainless steel production e.g. stainless steel wire
 Manganese metal production & castings
 Gold chain manufacturing & handmade jewellery
Comparative Advantage
 Large aluminium & steel resources
 World’s largest deposits of platinum group metals
Business Opportunities
Aerospace
 Aviation related services, including maintenance, repair and overhaul
 Rotary and fixed wing components
 Aviation training services
 Specialised manufacturing of avionics, including health usage monitoring systems
 Satellite related services (including tracking and control and applications
development)
Rail
 Production of infrastructure (tracks, signalling, electrification)
 Manufacturing of rolling stock & components
 Manufacturing of mining rail equipment
 Maintenance (infrastructure & rolling stock) R&D
Marine
 Manufacturing & assembly of engines & gearbox
 Manufacturing of mechanical components
 R&D
Business Opportunities
Capital Equipment
Industry
Opportunity
Re-capitalisation
Expansion & export
Boilers & heat exchangers; Tool dies & moulds; Petrochemical equipment
Pumps & valves; material handling equipment & straddle crane carries;
mechanised mining equipment
New investments
Turbine assembly; turbine components; machine tool manufacturing
Competitive Advantage
 Access to steel, aluminium
 Competitive costs
 Engineering technology
Business Opportunities
Film
 Film studio production
 Co-production ventures
 Distribution infrastructure
 Servicing foreign productions
Comparative Advantages
 Co-production treaty with UK
 Film rebate scheme
Business Opportunities
Conclusion
 South Africa offers compelling business opportunities,
with stable macro-economic environment, strong fiscal
position and a clear growth strategy based on building on
comparative advantages and removing constraints
SOUTH AFRICAN HIGH COMMISSION
TRAFALGAR SQUARE
WC2N 5DP
LONDON
PH.
020 7451 7237
FAX.
020 7839 0634
EMAIL. london@thedti.gov.za