Transcript South Africa - Reggio nel Mondo

Investing into South Africa
Economic, Institutional and
Political Outlook
Reggio Emilia
13 March 2013
South Africa at a glance
•Area 1,220, 813 km2
•Population 50.59 million (2011)
•Currency Rand (Euro 1 = Rand 11.58 Jan 2013)
•Time GMT + 2 hrs
•Head of the State: President Jacob Zuma
•11 Official languages with English the business language
•Total GDP: 305.8 billion € (2011)
•GNI per capita: 5,214 € (2011)
•Real GDP Growth: 3.5% (2011)
•Inflation (CPI): 5.6 % (PPI): 5.5% (Oct 2012)
•Main Exports: minerals & mineral products, precious
metals & metal products, chemical & food products,
automotives & components.
• Main imports: machinery, transport equipment,
finished products, oil, chemical products.
•Main trading partners: Germany, USA, China, Japan, UK &
France.
South Africa- global perspective
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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
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South Africa is one of the world’s 26 industrialised nations
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The country is also regarded as the gateway to Africa
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South Africa has the largest economy on the African continent, accounting for
approximately 25% of the continent’s GDP
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According to the World Bank, South Africa ranked 39th out of 183 in the world for
the ease of doing business in 2012
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The Johannesburg Stock Exchange is Africa’s largest and most developed securities
exchange and ranks 8th out of the G20 nations ahead of all the G7 countries
South Africa - global perspective continued
• South Africa remains the world’s top producer of minerals such as gold,
platinum, rhodium, chrome, manganese and vanadium.
• The country 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.
• According to the 2012-2013 Global Competitiveness Index out of 144
countries, South Africa was ranked 52nd and scored well in various
categories.
SADC and South Africa
• In August 2008 South Africa signed the Foreign Trade
Agreement to be part of the Southern African
Development Community (SADC) that represents a market
of 200 million consumers.
• In future, we expect that a further integration will take
place between the three major regional blocks
(SADC,COMESA & EAC), which is a potential future market
of 700 million consumers.
Investing in Africa: an improving environment
The operating environment in the continent is improving visibly and rapidly …
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The average economic growth rate in Sub-Saharan Africa is expected to be 6.6% in
2013 according to the African Development Bank.
Many countries have improved their business environment:
 restored macro-economic stability
 greater predictability & increased reliability of policy & regulatory framework
 increased transparency and improved decision-making
 privatisation initiatives
 reduced corruption
 investment protection & promotion
 intra and inter-regional initiatives
 emerging middle class and growing consumerism
 fast-urbanising and youthful population
High returns on investment. Ernst & Young estimates that FDI into Africa will reach
$ 150 billion by 2015 driven by strong growth in new projects.
BRICS and South Africa
• In December 2010 South Africa was invited to join Brazil, Russia, India and China
in the bloc of world’s leading emerging market economies, resulting in BRICS.
• BRICS countries have individually emerged to assume new economic rankings and
coordinate on their positions and actions in international organisations, as seen in
the United Nations.
• In the midst of the current global economic crisis, many countries in the world
are looking at BRICS members as the new locomotives for global economic growth
to provide renewed impetus to global economic cooperation.
• BRICS trade and investment with low-income countries have served as a major
support system in the wake of the global financial crisis (IMF Study).
BRICS and South Africa
•BRICS’ share of global output will increase from 18% to 26% over the next 10 years
and even to one-third by 2030.The contribution to global economic growth over the
last decade has reached 50%, which makes this group of states the leading power in
global economic development.
• GDP of BRICS member states in Billion USD in 2012: Brazil (2425.05); Russia
(1953.56); India (1946.77); China (8250.24); South Africa (390.92). This constitutes
25% of the world GDP.
• South Africa will host the 5th BRICS Summit on 26 and 27 March 2013 in Durban,
which will complete the first cycle of BRICS summits.
• On the occasion of the BRICS Summit, the BRICS Business Council will be launched.
Each BRICS member will nominate 5 members that are leaders of the respective
business organisations. The aim of the Council is to strengthen economic ties, trade
and investment between the communities of the 5 BRICS countries.
National Planning Commission
• The National Planning Commission is a new initiative of government. The NPC is chaired by the Minister in The
Presidency for National Planning and is responsible for developing a long term vision and strategic plan for
South Africa. The Commission will also advise on cross-cutting issues that impact on South Africa’s long term
development.
• The establishment of the National Planning Commission is our promise to the people of South Africa that we
are building a state that will grow the economy, reduce poverty and improve the quality of life of our citizens.
• The Commission is made up of 25 part-time Commissioners appointed by the President on the basis of their
skills and expertise. The Chairperson of the NPC is Minister Trevor Manuel and the Deputy Chairperson is Mr
Cyril Ramaphosa. The Commission is supported by a fulltime secretariat of public servants.
• On 15th August 2012 , the revised National Development Plan 2030 entitled, “ Our future-make it work” was
handed to the President at a special joint sitting of Parliament. All political parties represented in Parliament
expressed support for the NDP.
• On 6th September 2012 the Cabinet Lekgotla welcomed the NDP as prepared by the National Planning
Commission and acknowledged the plan as the strategic framework to form the basis of future government
planning.
• At the national conference of the ruling party ANC held at Manguang from the 16th to 20th December 2012,
the Vision 2030 and the National Development Plan was embraced.
South Africa and Italy – Bilateral Agreements
Key bilateral agreements signed with Italy:
• Bilateral Agreement on the Protection of Seamen in Distress (1890)
• Cooperation on Industrial and Commercial Development (1892)
• Avoidance of Double Taxation (1995)
• Reciprocal Promotion and Protection of Investment (1996)
• Memorandum of Understanding between Business Unity South Africa
(BUSA) and Confindustria (2007)
South Africa and Italy - Trade
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Italy is an important trade partner for South Africa. Between January and
September 2012 trade exchanges with Italy totaled 2.7 billion Euros with a
positive balance in favour of South Africa. Italy is currently South Africa’s
14th client country and 11th supplier.
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South Africa mainly exports primary commodities to Italy including
minerals, precious stones, raw hides and skins and iron ores.
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The leading imports basket from Italy into South Africa is made up of high
value added manufactured products such as machinery, vehicles and other
automobiles, electrical and electronic equipment, antibiotics and other
pharmaceutical products.
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The Government is striving to change the composition of exports from
primary commodities and minerals into high value manufactured products
through incentives and development programmes.
South Africa and Italy - Investment
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There is a stable presence of Italian companies that have invested in the
country. Foreign Direct Investments from Italy totaled 111.93 million
Rands in 2010, down from 321.49 million in 2009.
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At the same time FDIs from other countries of the world dropped more
heavily, thus making Italy the 10th biggest foreign direct investor in South
Africa.
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Some of the more prominent Italian investments into South Africa include:
Salvatore Ferragamo (textiles), Ferrero (food), Telit (communications),
SACE (financial services), Augusta (helicopters), Ansaldo (industrial
systems), Fiat Auto (automotive), Luxottica (eyewear) and Building Energy
(renewable energy).
We trust this sound relationship between South Africa and Italy will
continue to grow.
Why invest in South Africa?
Because you will find…
Abundant
natural
resources
Excellent
transport &
logistical
infrastructure
World class
financial
system
Political & economic
stability with sound
macro-economic
management
Competitive
sectors/industries
Skills
availability
Favourable cost of doing business
PROXIMITY TO MARKETS BY SEA
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Liverpool – 25 days
New York – 20 days
Buenos Aires – 11 days
Jeddah – 20 days
India – 10 days
Singapore – 12 days
Hong Kong – 25 days
South Africa – International Trade Agreements
South Africa has signed a number of Foreign Trade Agreements in the world, which
make it easier to do business. Among these are:
•South Africa – European Union (EU) Trade, Development and
Co-operation Agreement (TDCA)
•Southern African Development Community (SADC) FTA
•Southern African Customs Union (SACU) – India Preferential
Trade Agreement (PTA)
•Southern African Customs Union (SACU) - European Free
Trade Association (EFTA) FTA
•Africa Growth and Opportunity Act (AGOA)
•SACU – Southern Common Market (Mercosur) Preferential
Trade Agreement
Industrial Development Zones
South Africa has four Industrial Development Zones (IDZ), which are areas
where production is facilitated.
These are:
• The Coega (near Port Elizabeth) – investment hotspot in the Eastern Cape
for industries with global perspectives
• East London -automotive industrial hub (Eastern Cape)
• Richards Bay- terminal hub for coal exports (KwaZulu-Natal) and
• Johannesburg International Airport (Gauteng)- situated in SA’s economic
hub, OR Tambo Industrial Zone focusses on growth and competitiveness of
the manufacturing sector in the province.
Industrial Development Zones - continued
The intention of IDZs is to provide investors in the zone with direct links to an
international port and the facility to import inputs and goods into the zone
customs duty-free and exempt from VAT. Each zone has dedicated customs
support for faster processing of documentation. IDZs are suitable for export
orientated production.
The Government is currently working on a new policy for the development of
new industrial nodes (called Special Economic Zones) outside of the
traditional industrial areas while improving the performance of the IDZs.
Investment Opportunities
The Government offers attractive incentives to foreign investors. These are fully described in
the DTI Guide to Incentives that will be made available to potential investors by our Economic
Office in Milan. Some specific sector opportunities that I would like to highlight are:
Sector
Opportunities
Infrastructure
In his State of the Nation address President Jacob Zuma declared that
infrastructure is a priority sector for the country’s economy. Over the
coming 3 years R845 billion has been budgeted for public infrastructure
projects.
Five major geographically focused projects are:
-Rail, road and water infrastructure integration project in Limpopo to unlock
coal, platinum, palladium, chrome and other materials and to develop the
beneficiation of minerals.
-Improvement of logistics through the Durban-Free State-Gauteng industrial
corridor with a range of rail and port improvements.
-Construction of a new South Eastern node in the Eastern Cape to bolster the
province’s industrial and agricultural development and export capacity.
-Expansion of water, road, rail and electricity infrastructure in the North West.
-A range of projects on the West Coast including the expansion of the SishenSaldanha iron-ore corridor.
The private sector will play a role in the delivery of infrastructure through the
state-owned companies (such as Transnet and Eskom) and the provincial
departments of the nine provinces.
Projects will appear on the Tender Bulletin and through the South African
Development Bank on the following links:
www.info.gov.za ; www.afdb.org
Investment Opportunities - continued
Manufacturing
The manufacturing sector will receive R3.5 billion (342 million Euros) to
establish incentives for local production and for SMEs that are in start-up
phase or wishing to increase their capacity. Special emphasis is given to
improving competitiveness in the industry and investment in technology.
This includes production and upgrading of facilities in various sub sectors
such as: textiles and clothing, renewable energy and energy saving
industries, automotives & components.
Agro-processing
Over the coming 5 years R4.5 billion (440 million Euros) has been
budgeted for agro-processing projects aimed at promoting the
development of the rural economy.
The main opportunities are in partnering with local farmers and SMEs to
add value and export local products. These include: fisheries and
aquaculture, floriculture, vegetable processing, fruit processing, meat
processing, wine production, confectionary, indigenous teas, organic
products, natural fibres and essential oils. Another interesting sub sector
is production of biofuels, biodiesel & bioethanol.
Research &
Development
South Africa will host over 75% of the Euro 1.5 billion Square Kilometre
Array (SKA) with the rest located in Australia. This instrument is 50-100
times more sensitive and 10,000 times faster than any radio imaging
telescope yet built. Cooperation with Italian companies in this sector
will be an opportunity for both countries.
Trade exhibitions
Conferences and seminars, trade shows and expos are held across South
Africa. These are important platforms for analyzing the market and meeting
potential partners.
You can find the calendar of events through the following link:
http://www.southafrica.info/news/conferences/
Two major South African trade fairs:
- Africa’s Big 7 (food & beverage)
- Indutec (industry & technology)
are represented in Italy through NGComBrokerSAS.
For more information please contact:
Mr. Giacomo Rotunno
Tel. 051 7417932
E-mail: [email protected]
Thank you!
Contact details:
South African Embassy
Via Tanaro, 14
00198 Rome
Tel. +39 06 852541
E-mail: [email protected]
Economic Office
South African Consulate-General
Vicolo san Giovanni sul Muro, 4
2012 Milano
Tel. +39 02 8858581
E-mail: [email protected]