Transcript South Africa

Investing into South Africa
Investment Environment & Opportunities
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South Africa at a glance
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Area 1,22 million km2
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Population 53m (estimate)
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Head of the State: President Jacob Zuma
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11 Official languages with English the business language
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Total GDP: 2014 US$ 350.09 million)
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GDP 2014 per capita: US$ 6.086
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Real GDP Growth: 1.3% (2015)
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Inflation (CPI): 5,23% (2015 annual average)
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Main Exports; minerals & mineral products, precious
metals & metal products, chemical & food products,
automotives & components.
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Main trading partners: China, USA, Japan Germany,
India & the UK.
South Africa’s Sovereign Ratings (May 2014)
Rating Agency
South Africa’s
Rating
Standard &
Poors
BBB-
Moody’s
Baa2
Fitch Ratings
BBB-
Source: Trading Economics
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SADC Free Trade
Agreement
provides access to 200Million
+
Consumers
Future FTA with SADC,
COMESA & EAC (26
countries) with a market of
700million + Consumers
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• Market of 600
million
consumers!
• South Africa
already has
distribution
channels in
most of these
countries.
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South African Economy
YEAR
1994 THEN
2004
IN 2014
GDP
R 482 bn
US$ 60 bn
R 1 374 bn
US$ 171 bn
R 3 800 bn
US$ 350,09
bn
Merchandise exports
(billions)
R 69, 8
US$ 8.7
R 281,8
US$ 35,2
R 988,2
US$ 84,3
GDP Growth
3,2%
4,6%
1,5 %
Source:SARB
•Open economy
•Sound business case for investment and profit
•Gateway to Africa and markets of more than 200 Million consumers
South Africa’s leading Import Partners (2014)
Import Country
US Dollars
Billion
China
15.5
Germany
10.0
Saudi Arabia
7.1
United States of
America
6.6
Nigeria
5.1
India
4.6
Japan
3.8
United Kingdom
3.3
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South Africa’s leading Export Partners (2014)
Export Country
US Dollars
Billion
China
8.6
United States of America
6.4
Japan
4.8
Botswana
4.7
Namibia
4.5
Germany
4.2
India
3.7
United Kingdom
3.4
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South Africa – a conducive environment
World Economic Forum’s Global Competitiveness Index (2014/15)
shows that South Africa is:
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# 2 accountability of of private institutions
# 1 in the strength of auditing and reporting standards
# 3 in the efficacy of corporate boards
# 3 in the protection of minority shareholders’ interests
# 2 in the regulation of securities exchanges
# 1 in financing through local equity market
# 2 the availability of financial services
# 8 in the soundness of banks
# 14 in the strength of investor protection
# 14 in the quality of air transport infrastructure
#1 Overall highest ranking in the sub – Sahara Africa
49th overall ranking out of 149 countries and # 3 of all the BRICS economies
Current Economic Relations
• Bilateral Trade volume in 2015 was $ 1,1 billion
• Turkey’s export to South Africa totalled $ 583
million
• Turkey’s imports from South Africa totalled $
544 million
• The trade balance was slightly in Turkey’s
favour in 2015
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Turkey South Africa Trade 2015
Turkish Exports to SA
Turkish Imports from SA
SA Export
SA Import
700
660
640
600
620
500
600
400
580
560
300
540
200
520
100
500
0
2011
2012
2013
2014
2015
480
2011
2012
2013
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2014
2015
Economic Relations: Investment
• Two way flow of investment between the countries
• Turkey has invested through medium and large business
expansion:
Growth of current business to SA or
Relocation to SA, various attractive reasons
• South Africa investment in Turkey, largely big company
acquisition: Naspers 100% purchase of Markofoni Mondi
Paper, 13 production plants in Turkey
• SAB Miller 24% purchase of Efes Brewery (1,9 Billion US
$)
• MetAir purchased of Mutlu Automotive Batteries (175
million US $)
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Economic Relations: Investment
cont.
• Large acquisition investments by South African companies
resulted in investment imbalance toward South Africa,
particularly EFES deal with SAB Miller and MUTLU Purchase
• BUT Arçelik recently purchased Defy in South Africa for $ 320
- 340 million. Both brand and production capacity, making
South Africa Arçelik’s 2nd biggest centre after Turkey.
• DHT Consortium recently purchased Cape Iron and Steel
Corporation for $ 150 million - $ 50 million incentive from SA
government
• This investment with some other potential investments in
the pipeline may even the investment imbalance that exists.
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 & 27th largest
economy
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The country is also regarded as the gateway to Africa.
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South Africa has the 2nd largest economy on the African continent,
accounting for approximately 25% of the continent’s GDP.
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The JSE Securities Exchange is Africa’s largest and most developed
Securities Exchange and one of the world’s top 20 exchanges.
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South African economy is the most diversified African economy
Why South Africa for FDI?
• South Africa offers the returns without the high risk!
• South Africa has the most diversified economy in Africa offering
multiple investment opportunities to the savvy investor
• That African investments tend to be in capital intensive one
product economies; the energy sector in Angola and Nigeria
• The FDI is mostly concentrated in the telecommunications sector
in 2014.
• The country is the third largest in capital FDI recipient in Africa,
after Nigeria and Mozambique, and the largest FDI provider.
• Globally, South Africa ranks 15th among the most attractive
economies for transnational companies for 2013-2014
Why South Africa for FDI?
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South Africa’s FDI Composition
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Investment Incentives
* These are a few possible options on incentives; more options
can be found at www.dti.gov.za or the Embassy
New Policy Instruments to Attract Investment
SPECIAL ECONOMIC ZONES:
1. Industrial Development
Zones (considered as part of
the Customs Territory of
South Africa)
ORT
2. Free Port
Customs Territory
of
South Africa
3.. Free Trade Port
RCB
4. Sector Specific Zones
SB
Customs
Services
Secured
Enterprises
Area
Industry &
Service Area
One
Stop
Center
EL
Coega
IDZ
South Africa’s investment environment
South Africa today is one of the most sophisticated and promising emerging
markets globally, mainly because of …
Abundant
natural
resources
Excellent
transport &
logistical
infrastructure
Political & economic
stability with sound
macro-economic
management
Competitive
sectors/industries
World class
financial
system
Skills
availability
Favourable cost of doing business
South African Investment Services
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Sector Information
Finance to explore investment opportunities in SA
Facilitating direct Government support in the form of:
- information on investing in SA and the Business Environment
- detailed investment Incentives
- investment facilitation
- after care – ongoing contact
Contact Details
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South African Embassy: 0312 405 6861
Economic Office: 0312 405 6863
Website: www.southafrica.org.tr / www.thedti.gov.za
E-mail: [email protected] / [email protected]
Postal Address:
Filistin Sokak, 27
GOP, Cankaya
Ankara
06700
THANK YOU