South Africa Business Analysis

South AfricaBUSINESS ANALYSIS

BYFAGUN MITTAL (155)

VIVEK JHALA (175)YAJUR GUPTA (176)

Topography

• Location• Area• Climate• Border Countries• Natural Hazards• Natural Resources

People

• Population – 49,109,107 (25)• Median Age – 24.7 years• Population Growth Rate – minus 0.051%• Birth Rate – 19.61 births/1000

population• Death Rate –16.99

deaths/1000 population (4)

29%

66%

5%

Age Structure

0 - 14 15 - 64 65 & Above

SOURCE - CIA

People contd.

• Sex Ratio – 0.99 male/female

• Life expectancy at birth – 49.2 years

Languages –• IsiZulu (official) 23.8%• IsiXhosa (official) 17.6%• Afrikaans (official) 13.3%• Sepedi (offcial) 9.4%• English (official) 8.2%, •Setswana (official) 8.2%• Sesotho (official) 7.9%• Xitsonga (official) 4.4%• other 7.2%• isiNdebele (official)• Tshivenda(official)• siSwati (official)

SOURCE - CIA

79%

10% 9%3%

Ethnic Groups

Black African WhiteColoured Indian/Asian

ZION CHRISTIAN11%

CHARISMATIC

8%

CATHOLIC7%

METHODIST7%

DUTCH RE-

FORMED7%ANGLICAN

4%MUSLIM2%

OTHER CHRISTIAN

36%

OTHER2%

UNSPEC-IFIED1% NONE

15%

RELIGION

SOURCE - CIA

EducationLiteracy Rate

86.413.4

Male

Female

85.00% 86.00% 87.00% 88.00%

Male-Female Literacy Rate

Male-Female Lit-eracy Rate

Education Expenditure : 5.4% of GDP (2009)

Source : CIA

Infrastructure

AIRPORTS – 578 (11)

RAILWAYS – 20,872 KM (14)

ROAD – 362,099 KM (18)

TRANSPORT COMMUNICATION

TELEPHONE MAIN LINE – 4.32 MILLION (34)

TELEPHONE MOBILE CELLULAR – 46.44 MILLION (26)

INTERNET HOSTS – 3.75 MILLION (24)

INTERNET USERS – 4.42 MILLION (54)

SOURCE - CIA

Employment StatisticsDECEMBER 2010

POPULATION 15-64 YEARS 32,193,000

LABOUR FORCE 17,269,000

EMPLOYED 13,132,000

FORMAL SECTOR (NON AGRI) 9,163,000

INFORMAL SECTOR (NON AGRI) 2,225,000

AGRICULTURE 627,000

PRIVATE HOUSEHOLDS 1,117,000

UNEMPLOYED 4,137,000

NOT ECONOMICALLY ACTIVE 14,924,000

DISCOURAGED WORK SEEKERS 2,150,000

OTHER (NOT ECONOMICALLY ACTIVE) 12,774,000

Source – www.statssa.gov.za

Income Distribution

• GINI INDEX – 65.0 (2005)• 2nd Highest in the World after Namibia• Black population who make up almost 80% of

the population only account for 41% of South Africa's income .

• White population who make up about 9% of South Africa account for 45% of the income.

Social Problems

• Ranked 2nd for murders & 1st for assaults and rape per capita (2000)

• Has amongst the highest incidences of child and baby rape in the world.

• High record of car hijackings and a lower rate of car ownership.

• Crime against commercial farmers continues to be a major problem in the country

HIV/AIDS

• Highest number of people living with HIV/AIDS (5.6 million in 2009) .

• In 2009, 310,000 people died of HIV/AIDS . • More prevalent among female .• Pregnant women have 30% chances of being

affected by HIV .• 8.6% of GDP spend on health expenses (WHO

2006) .

Hofstede Model - Analysis

PDI IDV MAS UAI LTO

49

65 63

4955

43

50

64

45

South Africa World

Apperance• Urban classes mostly wear western dresses.• Men should wear dark coloured business suits.• Women mostly wear elegant business suits and

dresses.Greeting• Shake hands while maintaining eye contact and keep

smiling.• Some women do not shake hands so it is best to wait

for them to extend their hands.• Use titles and surnames to address people.• Business cards have no formal exchange of protocol.

BUSINESS ETIQUESTTES

Business Meeting Etiquettes• Appointments are necessary and should be made as far in

advance as possible.• It is difficult to arrange meetings with senior level managers.• Personal relationships are important.• After a meeting, send a letter summarizing what was decided

and the next steps.

Relationships & Communications• Netwoking and relationship building are crucial for long term

business success.• Relationships are built in the office.• Communication styles depend upon one’s culural

heritage.• Metaphors ans sports anologies are widely used.• Face-to-face meetings are preferred.

Top 5 Exports Top 5 Imports

• Gold• Diamond• Platinum• Machinery & Equipment• Coal• Motor Vehicles & parts

• Machinery• Transport Equipment• Chemicals• Petroleum Products• Textiles• Scientific Equipment

Top Exporting Partners Top Importing Partners

11.1

11.1

8

6

6.8

5.2

JapanUSAGermanyChinaUKNetherlands

11.2

7.9

11.1

6.2

5.5

4

Germany

US

China

Saudi Arabia

UK

Japan

Barriers To Trade

• Tariffs• Transparency, Corruption and Crime• Immigration Laws• Agricultural Standards• Import Restrictions

Corruption• Private use of public resources.• Bribery.• Electoral fraud.• Ranked 55 least corrupt country in the world.

Notable Incidents of Fraud and Corruption

• The South African Arms Deal.• Advanced Fee Fraud.

Currency• USD vs ZAR (2001-2010)• Current Rate 1 USD = 6.95 ZAR

Type of Government• Constitutional democracy with a three-tier system of government.• Independent judiciary combines aspects of Parliamentary and

Presidential systems.• Executive authority is vested in the President, who is the head of

the State and Govt.• The national, provincial and local levels of government all have

legislative and executive authority in their own spheres.• The government is undertaken by three inter-connected branches

of government: -Legislature: The National Assembly and the National Council of Provinces . -Executive: The President, who is both Head of State and Head of Government . -Judiciary: The Constitutional Court, the Supreme Court of Appeal, and the High Court .

Ease Of Doing BusinessRanked 34th out of the 183 economies in the world

TOPIC RANKING DB 2010 RANK

Starting a Business 75Dealing with Construction Permits 52

Registering Property 91Getting Credit 2

Protecting Investors 10Paying Taxes 23

Trading Across Borders 148Enforcing Contracts 86Closing a Business 77

Incentives to Encourage Foreign Investment

The South African government offers a range of incentives to encourage foreign investment and grow South African business. Foreign companies may qualify for various tax incentives, while local companies are able to make use of schemes which include export facilitation, development finance and investment incentives.

There are more than 65 incentives given by government which include incentives in

Manufacturing, Trading, I.T, Financing, Export etc

Some Incentives

• Business Process Outsourcing (BPO) and Off-shoring(All)

• Entrepreneurial Mining and Beneficiation Finance(Mining, Beneficiation and Jewellery)

• Strategic Industrial Projects(Industry, Technology and Agrotourism)

The Economy - Statistics• GDP – $277.4 billion (2009) (nominal; 32nd) – $488.6 billion (2009) (PPP; 25th)• GDP growth – 4.6% (Q1 2010)• GDP per capita – $5,684 (2009) (nominal;76th)$10,136

(2009) (PPP; 79th)• GDP by sector – agriculture (0.9%), industry (20.6%),

services (78.5%)• Inflation (CPI) – 4.6% (May 2010)• Labour force – 17.32 million economically active (2009

est.)• Unemployment – 24% (2009 est.)• Ease of Doing Business Rank – 34th

• FOREX RESERVE – 43,834 Millions of USD

Global Companies In South Africa

• Acer Africa• Barclays Bank• BMW South Africa• Britannia Biscuits• EDS South Africa• General Electric• Levi Strauss• Singapore Airlines• Vodafone• Volkswagen South Africa

Reasons of Investing in South Africa

• Sound economic policies• World-class infrastructure• Access to markets• Natural Resources • Trade reform, strategic alliances

Major Constrains On Enterprise Operation And Growth

• Crime• Impact of HIV/AIDS• Power• Racial discrimination

Thank You

(any questions ?)