433369666-The-Case-for-Investing-in-South-Africa

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96 | Contribution to the economy Structure Extensive sectoral linkages The broad services sector is the largest in the economy, accounting for 76.3% of overall GDP. The total employment complement of services-related sectors amounts to 9.7-million people, representing 79% of total employment in South Africa. The degree of concentration varies widely, from a banking industry dominated by four large domestic banks to a business services sub-sector encompassing numerous players with varying degrees of market power, depending on the segment. The retail and wholesale trade sub-sector is dominated by large companies operating alongside numerous small- to medium-sized firms. The services sector is central to the functioning of basically all industries in the economy due to its extensive linkages (backward, forward and lateral) with a multitude of input suppliers and producers, as well as end-user consumer markets. ATTRACTIVENESS OF SOUTH AFRICA’S SERVICES SECTOR Basis for comparative advantage Sophisticated, world-class and well-regulated financial sector that has effectively withstood crises in global financial markets. South Africa is sub-Saharan Africa’s largest exporter of commercial services. Strong backward, lateral and forward linkages with other sectors of the economy. Competitive cost structure relative to global benchmarks. Certain segments, such as BPO and film and television production, draw significant public sector support, including incentives. South Africa is recognised as one of the leading offshore destinations for the global outsourcing of business services. Select investment trends in these sectors • Significant investment has flowed into the development of South Africa’s offshore business process outsourcing (BPO) sector, which has been experiencing robust, double-digit annual rates of growth. • Major Chinese investment has been made in South Africa’s financial sector, accompanying the strengthening of bilateral ties and the rapid expansion of trade and investment between the two countries. • Some of the world’s largest wholesale and retail corporates, such as Walmart, H&M, Zara and Mango, have invested in South Africa in recent years.
| 97 EXPORT PERFORMANCE OF THE SERVICES SECTOR • Certain services are tradable. South Africa has increasingly become an exporter of services, particularly to other African countries but also globally, currently being the leading exporter and importer of commercial services on the continent. • The broad services sector’s share of overall exports (i.e. goods and services) rose steadily over the years to 28.7% in 2018, reflecting relative competitiveness. Services sub-sectors: Export performances SERVICES SUB-SECTORS: (ZAR billion STRONG at constant EXPORT prices) PERFORMANCES ZAR billion at 2010 basic prices 70 60 50 40 30 20 Transport and storage (LHS) Communication (LHS) Finance and insurance (LHS) Business services (LHS) Other sub-sectors (RHS) 160 140 120 100 80 60 40 10 20 0 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 ZAR billion (at 2010 basic prices) Services sub-sectors Compound annual growth rate in exports, 2000 to 2018 Transport and storage 2.4% Communication 4.3% Finance and insurance 5.2% Business services 5.9% Other sub-sectors 3.2% Sources: (chart and table) IDC analysis, compiled using Quantec data
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THE CASE FOR INVESTING IN SOUTH AFR
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CONTENTS 1. WHY INVEST IN SOUTH AFR
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10 REASONS WHY YOU SHOULD INVEST IN
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| 3 WORLD-RENOWNED FOR INDUSTRIAL I
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| 7 SOUTH AFRICA AT A GLANCE • So
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| 9 SOUTH AFRICA AT A GLANCE: INFRA
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| 11 SOUTH AFRICA AT A GLANCE: SOCI
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3. ECONOMIC OVERVIEW
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18 | - Manufacturing output increas
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20 | FISCAL POLICY GEARED TOWARDS F
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22 | GLOBAL ECONOMIC DEVELOPMENTS
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24 | RELATIVE PERFORMANCE OF SELECT
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4. POLICY FRAMEWORK
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30 | MICROECONOMIC POLICY INTERVENT
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32 | INDUSTRIAL POLICY SUPPORT Attr
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34 | TRADE POLICY: MAIN BENEFITS OF
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5. ENABLING ENVIRONMENT
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40 | EASE OF DOING BUSINESS: SOUTH
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42 | ATTRACTIVE INCENTIVES TO SUPPO
Page 49: 6. OPPORTUNITIES FOR INVESTORS
Page 52 and 53: 48 | SECTORAL STRENGTHS OF SOUTH AF
Page 54 and 55: 50 | EXPORT-ORIENTED SECTORAL OPPOR
Page 56 and 57: 52 | SOUTH AFRICA AS A KEY REGIONAL
Page 59: 6.1 AGRICULTURE AND AGRO-PROCESSING
Page 62 and 63: 58 | SA GDP, 2018 WELL-ESTABLISHED,
Page 64 and 65: 60 | AGRICULTURE AND AGRO-PROCESSIN
Page 67: 6.2 MINING AND MINERALS BENEFICIATI
Page 70 and 71: 66 | A HIGHLY DEVELOPED AND DIVERSI
Page 72 and 73: 68 | BASE METALS AND METALS FABRICA
Page 74 and 75: 70 | INVESTMENT OPPORTUNITIES IN MI
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Page 78 and 79: 74 |
Page 80 and 81: 76 | MANUFACTURING SECTOR’S EXPOR
Page 82 and 83: 78 | AUTOMOTIVE INDUSTRY: EXPORT-OR
Page 84 and 85: 80 | AUTOMOTIVE VALUE CHAIN: INVEST
Page 86 and 87: 82 | ELECTRICAL MACHINERY AND EQUIP
Page 88 and 89: 84 | CHEMICALS AND CHEMICAL PRODUCT
Page 90 and 91: 86 | CLOTHING, TEXTILES, FOOTWEAR A
Page 92 and 93: 88 | ADVANCED MANUFACTURING • The
Page 94 and 95: 90 | ADVANCED MANUFACTURING: OPPORT
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Page 98 and 99: 94 |
Page 102 and 103: 98 | BUSINESS PROCESS OUTSOURCING (
Page 104 and 105: 100 | FINANCE AND INSURANCE • The
Page 106: 102 | OCEANS ECONOMY • Several fa
Page 111 and 112: | 107 AN EXTENSIVE INFRASTRUCTURE D
Page 113 and 114: | 109 INFRASTRUCTURE DEVELOPMENT PL
Page 115: GREEN INFRASTRUCTURE INVESTMENT OPP
Page 119 and 120: SOUTH AFRICA: BUILDING PARTNERSHIPS
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433369666-The-Case-for-Investing-in-South-Africa

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