South Africa - International Franchise Association

Return to table of contents
Chapter 1: Doing Business in South Africa
• Market Overview
• Market Challenges
• Market Opportunities
• Market Entry Strategy
Market Overview Return to top
Welcome to the South Africa Country Commercial Guide (CCG). This guide presents a
comprehensive look at South Africa's commercial environment, using economic, political and
market analysis
South Africa is a country of 50 million people rich in diverse cultures and natural heritage.
Enjoying remarkable macroeconomic stability and a largely pro-business environment, South
Africa is a logical and attractive choice for U.S. companies to enter sub-Saharan Africa. The
country covers 1.22 million square kilometers and is the world’s largest producer of platinum,
vanadium, chromium and manganese.
South Africa is the most advanced, broad-based industry and productive economy in Africa
and in 2011 its gross domestic product (GDP) grew by 3.1 percent to $422 billion. In 2010
South Africa accounted for 31 percent of sub-Saharan Africa's GDP.
The mature nature of the South African economy is reflected in the mix of economic sectors:
• primary (including agriculture, fishing and mining): 7 percent
• secondary (manufacturing, construction and utilities): 20 percent, and
• tertiary (trade, transport and services): 73 percent
The tourism sector has experienced continued growth, given its prominence on the world
stage with the 2010 World Cup, and is a major earner of foreign exchange, along with
minerals, agricultural produce and some niche, high-tech sectors.
On average, in urban areas the country boasts well-developed infrastructure, comparable to
OECD standards. Its growing service sector is a major employer, and the private, corporate
side of the economy is well managed, although facing slow productivity gains. The banking
and financial services sector is stable and has weathered the worldwide financial crisis well.
The Johannesburg stock exchange (JSE) ranks among the top emerging market exchanges
in the world.
South Africa’s success in hosting the world’s single largest sporting event, the 2010 FIFA
World Cup, with no noteworthy security or logistics mishaps, has shown that the country is
capable of undertaking – and successfully completing – major projects on time.
In April 2011 South Africa joined Brazil, Russia, India and China as the only African country
in the leading emerging market group, BRICS. This step was seen as a significant
endorsement by its peers of the country’s macro-economic development since establishment
of democracy in 1994.