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South African Business 2019 edition

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The 2019 edition of South African Business is the seventh edition of this annual guide to business and investment in South Africa. Regular pages cover all the main economic sectors of the South African economy and give a snapshot of each of the country’s provincial economies. Feature articles on topical issues such as Special Economic Zones and African trade provide unique insights, together with comprehensive overviews of critical economic sectors. Other special features focus on the exciting new possibilities in renewable energy, airports as engines of regional growth and the maritime sector as an entirely new prospect for South African entrepreneurs and businesses. South African Business is complemented by nine regional publications covering the business and investment environment in each of South Africa’s provinces. The e-book editions can be viewed at www.globalafricanetwork.com

SPECIAL FEATURE Rhodes

SPECIAL FEATURE Rhodes Scholar Trudi Makhaya, the panel also includes respected former finance minister Trevor Manuel. A number of investment summits are planned. The lifting of a long-term drought and big improvements in the economic returns from the agricultural sector encouraged South Africans to think that the political changes would be a precursor to a steady improvement in the economic field. There were also good gains in sectors such as trade, manufacturing, and finance and real estate. However, depressed commodity prices and the fact that South Africa is among the world’s “emerging markets” meant that events in other parts of the world put a damper on the country’s economy going in to the third quarter of 2018. A general election will be held in 2019. The results of this election should allow for a calmer climate and more political certainty. There is a lot of work to do to get South Africa’s economy back on a solid upward path, but the country has tremendous advantages. Great mineral wealth has underpinned the South African economy ever since the first diamond was stumbled upon in 1867. Gold was found soon afterwards and that industry effectively saw to it that South Africa became an industrialised nation. Now those gold mines are tapering off production but iron ore and platinum reserves are impressively large. The grains of the central regions of the country, together with the fruits and vegetables of Mpumalanga and Limpopo, the wines and grapes of the Western Cape and the sheep and mohair of the Eastern Cape, all contribute to a diverse and vibrant agricultural sector. There are many strong agricultural companies in the sector. KwaZulu-Natal is the country’s leading sugar area, and has a strong suite in forestry and paper production. Automotive manufacturing and automotive components are doing well, with major investments by most of the major marques and increased exports a feature of the sector. The publication in 2018 of a new Integrated Resource Plan (IRP) is another symptom of the type of increased certainty that an economy needs in order to thrive. The IRP is a road map for South Africa’s electricity generation and the previous administration seemed determined to push for an expensive nuclear programme. The latest plan confirms that the already hugely successful drive for renewable energy will be continued and expanded. Apart from being greener and cheaper, the renewable energy programme has also attracted lots of foreign direct investment (FDI) and provided new employment opportunities. (The renewable energy private investor programme is covered in another article in this publication.) The Drakensberg mountain range in KwaZulu-Natal is a key tourism asset. SOUTH AFRICAN BUSINESS 2019 16

SPECIAL FEATURE ZIMBABWE NAMIBIA BOTSWANA Limpopo 7% MOZAMBIQUE North West 6% Gauteng 35% Mpumalanga 7% SWAZI- LAND Northern Cape 2% Free State 5% LESOTHO KwaZulu- Natal 16% Western Cape 14% Eastern Cape 8% Percentage contribution of each province to national GDP. SOURCE: STATS SA WWW.STATSSA.GOV.ZA Trends Good signs for the economy include: • Several provincial governments and investment agencies are establishing trade relations and study programmes with BRICS countries. State visits to and from China immediately before and after a major BRICS summit in 2018 gave an indication that Ramaphosa holds high hopes for increased trade with the biggest of the BRICS nations. Two-way trade between the countries in 2017 was worth .1-billion. South Africa wants to grow tourist numbers from China. South Africa became the first country in the world to export beef to China in 2017, to go with existing exports of iron ore, platinum and fruit and wine. • Tourists are visiting South Africa in record numbers (Cape Town’s Air Access programme has secured tens of thousands of new seats on direct flights to and from the city). • Companies are successfully trading into Africa. • Niche agricultural markets are booming with macadamia nuts being the most successful. Pecan nuts have done well and wine and grape exports to China are growing. • Private education at school and tertiary level is growing as a sector. • New banking licences have been issued and several more are in the pipeline. • New stock exchanges came on line in 2017 and more are expected. • Investment in infrastructure (especially ICT and railways) is strong. Nedbank’s report on capital expenditure in South Africa stated that the 29 large projects announced in the first half of 2018 were valued at R63.9-billion (Financial Mail). The renewable energy programme 17 SOUTH AFRICAN BUSINESS 2019

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