South Africa boasts an attractive investment environment that few regional peers could match, according to a report by the Oxford Business Group that focuses on the country’s drive to cement its position as the gateway to the rest of Africa through a wave of major initiatives.
The Report: South Africa 2012, launched in Johannesburg on Friday, gives wide-ranging coverage of the government’s efforts to boost growth across South Africa’s industrial sector, particularly in manufacturing, in a bid to address the country’s unemployment problems.
Automotive, steel, mining, transport
This includes extensive analysis of South Africa’s automotive and steel sectors, which are well positioned to spearhead further economic growth and attract investment.
It also considers the extensive transport infrastructure upgrades under way, as well as initiatives being put in place to improve SA’s energy infrastructure and secure steady power supplies as the country looks to tackle the challenge of rising demand.
South Africa’s mining industry also comes under the spotlight, as the report documents the potential for expansion in new markets, especially China, while exploring promising growth segments such as iron ore.
The Oxford Business Group (OGB) publishes economic intelligence on 33 countries around the world from its offices in Istanbul, Dubai and London. The group spent about nine months in the country compiling the report in partnership with South Africa’s Department of Trade and Industry.
‘Attractive investment environment’
OBG regional editor Robert Tashima said that while South Africa faced some sizable structural challenges, it still boasted an attractive investment environment that few regional peers could match.
“South Africa has made a fairly strong recovery from the 2009 contraction, driven in large part by domestic consumption,” Tashima said in a statement. “The focus over the medium term will need to unshackle greater output in productive sectors, particularly those that provide greater multiplier effects, such as industry and infrastructure.”
Tashima described South Africa’s economy as sophisticated, noting that it took about 19 days to register a business in the country – much faster than in most African countries – and adding that the country’s government budget was in good health.
Unemployment at 24% was described as a structural challenge, and inequality in South African society as posing “long term concern”. “The problems are concerning, but they are not a cause for despondency,” Tashima said.
The report credits South Africa with having policy and political stability, a good business environment, rich natural resources and strong infrastructure. “These can propel the economy forward, they offer opportunity,” Tashima said.
On the energy side, with initiatives like the renewable independent power producers programme under way, the report found that prospects for growth were “electrifying”.
Some of the growth strategies identified in the report include diversification of exports and strengthening of skills sets.
‘Serious long-term growth potential’
“The central message contained in the report is that South Africa offers significant and serious long-term growth and development potential despite the challenges which we confront at present, some of which are not of our own making but … the winds of the world economy blowing in our direction,” Trade and Industry Minister Rob Davies said at Friday’s launch.
“The report articulates a clear message that South Africa is open for business,” Davies said, adding that it was important to situate the report within the context of the country’s economic strategy.
The Report: South Africa 2012 contains an exclusive interview with President Jacob Zuma, together with a detailed, sector-by-sector guide for investors.
It provides a wide range of contributions from leading political, economic and business representatives, including the Finance Minister Pravin Gordhan, Reserve Bank Governor Gill Marcus and Mineral Resources Minister Susan Shabangu.
International personalities, including OECD secretary-general Angel Gurria, Brazilian Minister of Development, Industry and Foreign Trade Fernando Damata Pimentel, European Commissioner for Development Andris Piebalgs, Virgin Atlantic president Richard Branson, also offer their views on South Africa’s economic development.