South Africa

southafrica map1​​Location

South Africa is located at the tip of the African continent, with a 2 798km  coastline on the Atlantic and Indian Oceans. The country lies between 22º and 35º south and is divided into four major geographic regions; a coastal belt and three plateaus. 

South Africa is neighboured by Botswana, Lesotho, Mozambique, Swaziland, Zimbabwe and Namibia. It is the world’s 25th largest country in size.

 

Government and Politics

South Africa has three capital cities: Cape Town (legislative), Pretoria/Tshwane (executive) and Bloemfontein (judicial). 

The country has bicameral parliament consisting of the National Assembly (lower house), which has 400 members, and the National Council of Provinces (NCOP or upper house), which has 90 members. 

The head of state is President Jacob Gedleyihlekisa Zuma. The cabinet is appointed by the president on a five-year term while the president is elected by the National Assembly for a five-year period. 

The judicial authority of the republic is vested in the courts. The courts are independent and subject only to the constitution and the law, which they must apply impartially and without fear, favour or prejudice. The courts are:

•Constitutional Court

•Supreme Court of Appeal

•High Courts (including any High Court of appeal that may be established by an Act of Parliament to hear appeals from High Courts)

•Magistrates' Courts

•Any other court established or recognised in terms of an Act of Parliament, including any court of a status similar to either the High Courts or the Magistrates' Courts.

 

​Provincial and Local Governments

South Africa has nine provinces, each with its own legislature, premier and executive council. Each province is characterised by its own distinctive landscape, population, economy and climate.

The provinces are: 

  • Eastern Cape
  • Free State
  • Gauteng
  • KwaZulu-Natal
  • Limpopo
  • Mpumalanga
  • Northern Cape
  • North West
  • Western Cape

 

 ​South Africa's Economy

South Africa has achieved a level of macro-economic stability not seen in the country for many years. Over the past several years, government policy focused successfully on macroeconomic stability, getting inflation, debt and currency volatility under control. 

Such advances create opportunities for real increases in expenditure on social services, and reduce the costs and risks for all investors, laying the foundation for increased investment. 

The South African government has achieved much success in ensuring macro-economic stability, via the implementation of policies directed at promoting domestic competitiveness, growth and employment.

 

Business Environment

According to the World Bank Report ‘Investment Climate Assessment’ South Africa's business environment compares favourably with its peer group of upper to middle income economies globally. 

The South African policy authorities seem to have clutched the maxim that a conducive business environment is a crucial ingredient to the creation of vibrant local economies across South Africa. 

The country boasts most modern and extensive infrastructure comparable to that of developed countries. South Africa has well-developed financial, legal, communications, energy, and transport sectors; and a stock exchange that ranks among the 10 largest in the world. 

The country pride itself of a modern infrastructure supporting an efficient distribution of goods to major urban centres throughout the region. Telecommunications are the best developed on the continent, with mobile phone use far outnumbering fixed lines. 

Ports and shipping handle around 96% of the country’s exports and are a transit hub for trade between the Americas, Europe, Asia and the rest of Africa.

Durban is Africa’s largest container port while the port of Richards Bay is the world’s largest bulk coal terminal. Other major ports in South Africa include East London, Port Elizabeth, Saldanha, Mossel Bay, and Ngqura. There is an excellent road network with more than 75 000km of surfaced roads. The country has an extensive passenger and freight railway network, much of it state-owned, which connects to other networks in the Sub-Saharan region.

South Africa has three main international airports - Cape Town, King Shaka and OR Tambo. Domestic airports are situated in Bloemfontein, East London, George, Kimberly, Pilansberg, Port Elizabeth and Upington. 

There are abundant flights connecting the three major cities - Johannesburg, Durban and Cape Town - with leisure/industrial towns of Port Elizabeth, East London, George, Hoedspruit, Bloemfontein, Kimberley, Nelspruit, Pietermaritzburg, Mthatha, Polokwane, Richards Bay, Upington, Nelspruit/Kruger, Margate, Phalaborwa and Mmabatho.

There are a large number of banks in South Africa, the largest of which include ABSA, Standard Bank of South Africa, Netbank Bank and First National Bank. Johannesburg, Durban and Cape Town are home to many international bank branches, including Barclays, ABN AMRO, Banque Paribas, Bayerische Vereinsbank and ING Barings.

 

Taxation

In line with international trends, the South African tax system has changed from a source-based to a residence-based system. This means that South African residents are taxed on their worldwide income. Non-South African residents will be taxed on income from South African sources in accordance with the taxation agreements with the different countries.

 

Financial Infrastructure

South Africa is one of the world's favourite emerging markets, offering investors sophisticated financial infrastructures and exceptional investment opportunities. The South African Reserve Bank oversees the banking services industry in South Africa. The non-banking financial services industry is governed by the Financial Service Board. South 

The Johannesburg Stock Exchange, founded in 1870, is the largest stock exchange in Africa and corporations operating in South Africa are well served by merchant banks, brokerage firms and a wide range of sophisticated financial service specialists. 

South Africa’s banking system is regularly ranked in the Top 10 in terms of competitiveness. The JSE is governed and licensed externally by the Stock Exchange Control Act of 1985. 

 

Competition and Regulatory Policy

South African authorities embarked on a major overhaul of Competition Policy, which led to the formulation of a new policy, the Competition Act, No. 89 of 1998, which seeks to achieve the following objectives:

•To promote the efficiency, adaptability and development of the economy

•To provide consumers with competitive prices and product choices

•To promote employment and advance the social and economic welfare of South Africans

•To expand opportunities for South African participation in world markets and recognise the role of foreign competition in the Republic

•To ensure that small and medium-sized enterprises have an equitable opportunity to participate in the economy

•To promote a greater spread of ownership, in particular to increase the ownership stakes of historically disadvantaged persons.

In meeting these objectives, it is focused on restricting anti-competitive practices, eliminating abuse of dominant positions and strengthening merger control. Three institutions were created in terms of the act to achieve the above objectives:

•The Competition Commission, which is independent but whose decisions may be appealed to the Competition Tribunal and the Competition Appeal Court

•The Competition Tribunal, which has jurisdiction throughout South Africa and is independent from the competition institutions

•The Competition Appeal Court, which has status similar to that of a High Court and jurisdiction throughout South Africa.

 

Skills

South Africa possesses a large resource base of skilled, semi-skilled and unskilled labour. The South African government has introduced wide-ranging legislation to promote training and skills development and fast-track the building of world-class skills and competences. A strong network of universities and other tertiary education institutions is home to a host of leading international academics and researchers, with the majority of research and development in South Africa, undertaken at the country's universities.

 

Natural Resource

South Africa has large deposits of mineral resources such as gold, chromium, antimony, coal, iron ore, manganese, nickel, phosphates, tin, uranium, gem diamonds, platinum, copper, vanadium, salt and natural gas. 

It is a major industrial player and world leader in the production and export of minerals. With an abundance of raw materials, an increasing labour and capital efficiency and cutting edge-technology development, South Africa has been ranked as highly cost competitive by the Economic Intelligence Unit.

The country produces 14% of the world's gold, and has 41% of the world's known reserves. It is estimated that 21 000 tons of undeveloped resources - about 20% of the world's unmined gold - still remains. 

These ores are increasingly difficult to exploit due to the great depths at which they are situated and their fairly low-grade quality produce. Over the past few years, South African mining houses have transformed into large, focused mining companies that include Anglo Platinum, Anglogold and  De Beers. 

The country is also the leading producer of base metals and coal, accounting for a significant proportion of both world production and reserves. The country's diamond industry is the third largest by value, and the sixth largest by volume in the world, with Russia and Botswana leading in both categories.

 

Culture and Language

The Rainbow Nation is an allegory used to describe the incredible diversity of its people, from the original Bushmen inhabitants of the land to the people who migrated and settled here over the years. 

There is hardly a nation on Earth that is not in some way represented in this diverse country. South Africa is ethnically diverse and boasts 11 official languages, English most commonly spoken. About 78% of the South African population is of black African ancestry, divided among a variety of ethnic groups speaking different languages, nine of which have official status. South Africa also recognises several unofficial languages, including Fanagalo, Khoe, Lobedu, Nama, Northern Ndebele, Phuthi, San and South African Sign Language.

 

Climate

Most of South Africa enjoys a mild, sunny climate with warm to hot days in summer and dry sunny winters. The country enjoys summer rainfall and an average of 8,5 hours of daily sunshine.

 

Religion

Christians account for 79% of the population. This consist of Zion Christian, Roman Catholic, Methodist, Dutch Reformed, Anglican and members of other Christian churches which accounts for another 36% of the population. Muslims accounts for 1.5% of the population, Hindus about 1.3% and Judaism at 0.2%. Almost 15% of the population has no religious affiliation.