Transcript Republic of South Africa

Republic of South Africa
R.S.A
Country IT Assessment
IB8710 D. Truex
Kyai Mullei
MNC that specializes hardware and software components considers
opening a manufacturing plant in Africa. The corporation has a twopronged strategy of tapping both domestic and export markets.
Scenario: Q & A session with shareholders and new-market researchers
“Why Sub-Saharan Africa and why South Africa? Aren’t
countries like Morocco, Egypt and Algeria and Tunisia
larger economies and much closer to traditional markets
like the E.U. and the U.S?”
Statistics for 2003
R.S.A
North Africa
Classification
Low/middle income
Low/middle income
GDP ($)
160 billion
216 billion
Industry/services as %
of GDP
95% ($152 bn)
80% ($172 bn)
Tele density/ telephone
costs to U.S. (3 mins)
41.5%
$0.20
25%
$.10
High Tech exports as %
of GDP
5% (7.6 bn)
4% (8.64 bn)
FDI (foreign direct
investment $)
$819 million
$4.1 billion *
Aircraft Departures
146,000
138,000
Http://devdata.worldbank.org/external
/
“We know parts of Africa are politically volatile and this has
an effect on their immediate neighbors. What are the risks
associated with our investment in South Africa?”
SOUTH AFRICA’S NEIGHBORS
http://www.cia.gov/cia/publications/factbook/
Zimbabwe (25 year old multiparty democracy-stable)
Lesotho (new constitutional monarchy – SA military
intervention in 1998 helped restore civilian rule)
Angola (new multiparty democracy – stable, historical
involvement of SA military in civil war, no disputes)
Botswana ( 40 year old multiparty democracy – stable)
Swaziland (30 year old monarchy – stable)
Mozambique (15 year old democracy – stable)
Namibia (15 year old democracy – stable, historical
occupation by SA between WWI and 1988)
**All countries are members of Southern African
Development Community (SADC) of which South Africa
represents 65% of combined 226 billion dollar GDP
map.africa-atlas.com/ pictures/physical-africa.jpg
**Above countries combined military exp: $945 million
South Africa : $2.6 billion (Nuclear Power, major tech
grade weapons exporter)
http://www.iss.co.za/AF/RegOrg/unity_to_union/pdfs/sadc/risdp/c2.pdf
“Give me some demographics. What are we working with?
Literacy, income levels, economy, culture…? ”
SOUTH AFRICAN DEMOGRAPHICS
Population
- 42 million (life expectancy 45 years)
- 72% Black, 13% White , 8% mixed,
- Urbanization 56% *
- HIV/AIDS 15% prevalence (15-49yrs)
- Literacy English (86%)
- unemployment 31% (high crime environment.)
- population below poverty line 50%
- Gini coefficient 0.77 (10% of population
- controls 60% of the wealth)
- GDP/capita $1390 (2002)
- Hofstede MAS/ UAI (strong/ weak )
- Hofstede PDI / IND (medium/ strong)
http://www.sarpn.org.za/RegionalViews/southAfrica.php
http://www.worldbank.org/cgi-bin/sendoff.cgi?page=%2Fdata%2Fcountrydata%2Fict%2Fzaf_ict.pdf
http://www.cia.gov/cia/publications/factbook/geos/sf.html
The cultural relativity of organizational practices and theories, Gary Hosftede, Journal of International Business Studies, Fall 1983
“Our investment will require a world class communications
infrastructure to succeed. From personal experience, the
infrastructure in most African countries is wanting. Is South
Africa any different?
SOUTH AFRICA COMMUNICATION INFRASTRUCTURE
Statistics
- mainlines 4.8 million/ cellular 18.6 million
- internet code (.za)
- internet accounts 3.5 million* (27% users
in Africa)
- internet penetration 7.3% (1.5 % in Africa)
- internet use (growth) 2000-2005 46%
(198% in Africa)
www.kodiak.org/
- medium level in digital access index
(0.45) – sub Saharan Africa average (0.15)
- 350,000 wired computers in education
(2001)
- 288,000 Internet Hosts
- 2 submarine cables*, 3 Earth Satellite
Stations
http://www.worldbank.org/
http://www.internetworldstats.com/stats1.htm
http://www.cia.gov/cia/publications/factbook/geos/sf.html#Comm
SOUTH AFRICA COMMUNICATION INFRASTRUCTURE
Statistics
- mainlines 4.8 million/ cellular 18.6 million
- internet code (.za)
- internet accounts 3.5 million*
- internet penetration 7.3%
- internet use (growth) 2000-2005 46%
- medium level in digital access index
(0.45) – sub Saharan Africa average (0.15)
- 350,000 wired computers in education
(2001)
- broadband accessibility 3.7 out of 7 World
Bank index
- Only Sub Saharan country with 3G service
- 521 secure servers
www.dttuk.co.uk/images/ computercables-big.jpg
“What is the government commitment to the IT industry ?
Will we be operating in an environment that protects our
copyrights?
GOVERNMENT ICT POLICY / SUPPORT
-$11 billion spent on ICT expenditures in 2001
- 10% of GDP spent on ICT ($264/capita)
- Corporate Income tax reduced by 29% (2005 Budget)
-BASED ON WORLD BANK INDEX 0-7
- Govt. online services availability 3.6 out of 7
- Laws relating to IT use 4.0 out of 7
- Govt. prioritization of ICT 4.5 out of 7
http://www.treasury.gov.za/documents/budget/2005/guide.pdf
http://www.worldbank.org/
“What type of companies are located there that would
benefit from our products? Can the domestic economy
sustain demand for high tech products?
SOUTH AFRICAN ECONOMY
• Johannesburg Stock Exchange (top 10 in the world market cap $120
billion 2002)
• South Africa an exporter of hardware/ software ( 6% of GDP)
• Linked with London Stock Exchange and 19 other exchanges in
Africa
• High Tech presence in SA
–
–
–
–
–
–
–
NEC South Africa
IBM South Africa
Mecer (domestic)
Sahara Computers (domestic)
Pfisterer Group (domestic)
Siemens South Africa
Cisco South Africa
http://www.anc.org.za/ancdocs/history/mbeki/2002/tm0517.html
http://www.ha.co.za/CompanyProfile.aspx
www.mecerpc.co.za/
www.nec.co.za/
QUESTIONS?