Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
South African Academy of Engineering South Africa as a Role Player in the Global Business and Economic Business Environment By Vic Van Vuuren Chief Operating Officer Business Unity South Africa 4 February 2008 Who is BUSA ? > BUSA is the voice of organised business at both national and international levels in South Africa, and proactively and dynamically addresses different business views. THE VISION OF BUSA > BUSA is a unified and fully representative organisation that contributes to a vibrant, transforming and growing economy in South Africa The South African Economy > > > > > > > > > Growth of 3% per year 1994-2004 Growth of over 4% since 2004 (great reaction after 2001-2002 crisis) Inflation target 3-6% Inflation currently over 6% (oil price influence) Relatively stable currency since 2002 Strong fiscal discipline in government Government budget surplus Current account deficit driven by high levels of imports High unemployment at approx 25% Economic policy The Government of South Africa demonstrated its commitment to open markets, privatisation and a favourable investment climate Prudent Fiscal Policy has seen the reduction of government debt and Macroeconomic stability achieved continues to foster a positive environment for economic growth Both monetary and fiscal policy continues to support a positive investment climate Some SA’s statistics South Africa Population (Million) GDP (PPP) GDP Growth (2006) GDP per capita (US$ at market exchange rates) 47.9 $ 587 billions 5% 13,300 Inflation Rate (CPI) 4.9% Unemployment Rate 26.7% Public Debt (% of GDP) 33.2% Investments (% of GDP) 17.1% Growing Consumer Market > > > > > > > > > > > Economic growth lead by consumer demand Greater employment opportunities and more people entering the economy This is evidenced by growing tax base Increasing importance of services sector Expanding middle class including through BBBEE Social security provided to over 7 million households Interest in luxury and niche products 4th fastest growing cell phone market in the world Recent slowdown as a result of interest rate increases Energy Crisis Infrastructure in regression South Africa in Africa > > > > > > > 4% of Africa’s surface 6% of Africa’s Population 25% 0f Africa’s GDP 40% of Africa’s Industrial output Over 45% of Africa’s minerals production 50% of Africa’s Purchasing Power Over 50% of Africa’s energy Open Economy > > > > > > Open economy Low barriers to trade in goods and services WTO member Preferential market access to key trading partners including the US Possible base from which to export to third countries Negotiations under way to revise free trade agreement with the EU Infrastructure > > > > > > > Government programme to spend R400 billion (approx 57 billion USD ) over next 3-5 years Includes projects for 2010 FIFA World Cup such as new stadiums Also includes longer term projects such as power generation and transport systems Part of ongoing programme that includes government’s social infrastructure spending New opportunities always emerging In addition high levels of private sector infrastructure spending Skills, knowledge, technology and financing required 2006 South African exports Exports - commodities: gold, diamonds, other metals and minerals, machinery and equipment Imports - commodities: machinery, foodstuffs and equipment, chemicals, petroleum products, scientific instruments Source: http://en.wikipedia.org/wiki/South_Africa FDIs Since 1994, South Africa has continously provided the right climate to attract significant Foreign Direct investments. This environment led to the largest single FDI into South Africa when Barclays bought a majority share in local bank Absa Group Limited in 2005. Deals between the British based Vodafone and South Africa's Vodacom have also taken place in 2006. Financial overview Sophisticated financial structure with the JSE Securities Exchange, a large and active stock exchange that ranks 18th in the world in terms of total market capitalisation Recent evolution: JSE’s Shareholder composition The trend of FDIs is also confirmed by the JSE’s evolution! Source: http://www.jse.co.za/ Priority Sectors • Business Process Outsourcing • Tourism • Bio-fuels and chemicals • Clothing and textiles • Mining and mineral beneficiation, Metals and engineering • Agriculture and Agro-processing, Forestry and paper • White goods sector • Creative industries • Pharmaceuticals • Capital Goods and Energy • Telecommunications Agriculture accounts for 3.4% of the gross domestic product and 10% of total employment Major crops: Citrus and deciduous fruits Corn Wheat Dairy products Sugarcane Tobacco Wine (South Africa is the 5th largest producer worldwide) Wool Maize South Africa has many developed irrigation schemes and is a net exporter of food. Mining & Metals > South Africa is the world's largest producer and exporter of gold and platinum and also exports a significant amount of coal > Another major export is diamonds > During 2000, platinum overtook gold as South Africa's largest foreign exchange earner > The value-added processing of minerals to produce ferroalloys, stainless steels, and similar products is a major industry and an important growth area Telecommunications The domestic telecommunications infrastructure provides modern and efficient service to urban areas, including cellular and internet services. In 1997, Telkom, the South African telecommunications parastatal, was partly privatised and entered into a strategic equity partnership with a consortium of two companies, including SBC (U.S). In exchange for exclusivity to provide certain services for 5 years, Telkom assumed an obligation to facilitate network modernisation and expansion into unserved areas. Four cellular companies provide service to over 20 million subscribers, with South Africa considered to have the 4th most advanced mobile telecommunications network worldwide. The four cellular providers are Vodacom, MTN, Cell C and Virgin Mobile SA. Tourism In 2006 the number of Total ForeignTourist arrivals went up to 8,395,833 increasing by 13,9 % in respect of 2005 Source: http://www.southafrica.net/satourism/ Tourism (continued) Source: http://www.southafrica.net/satourism/ Cost of doing business in South Africa(2006 Ranking) > > > > > > > > > > > Overall Starting a business Dealing with licenses Employing workers Registering property Getting credit Protecting investors Paying taxes Trading across borders Enforcing contracts Closing a business Source: World Bank ranking of 175 countries 29 57 45 87 69 33 9 74 67 43 65 Global Competitiveness Index for SA > > > > > > > > > > > > > Overall rank Basic requirements Institutions Infrastructure Macro economy Health and primary education Efficiency enhancers Higher education Market efficiency Technological readiness Innovation and sophistication factors Business sophistication Innovation Source: World Economic Forum, 2007 44 61 39 43 50 117 36 56 78 46 33 36 32 Global Competitiveness Index for SA > > > > > > > > > > > > > Overall rank Basic requirements Institutions Infrastructure Macro economy Health and primary education Efficiency enhancers Higher education Market efficiency Technological readiness Innovation and sophistication factors Business sophistication Innovation Source: World Economic Forum, 2007 44 61 39 43 50 117 36 56 78 46 33 36 32 THANK YOU! Vic Van Vuuren Chief Operating Officer Business Unity South Africa