South Africa at a glance
• Area 1,22 million km2
• Population 55.91 million
• Head of the State: President Jacob Zuma
• 11 Official languages with English the business language
• Total GDP: 2016 R4 277 bn (US$ 290,78 bn)
• GDP 2016 per capita: R76 498 (US$ 5 201)
• Real GDP Growth: 0.3% (2016)
• Inflation (CPI): 6,4% (2016 annual average)
• Main Exports: minerals & mineral products, precious
metals & metal products, machinery & electronics, vehicles and
& transport equipments
• Main trading partners: China, USA, Japan, Germany,
India .
South African Economy
• South Africa positioned as a manufacturing centre of excellence
• Diversified Industrial sectors
• Open economy
• Sound business case for investment and profit
• Gateway to Africa and markets of more than 200 Million consumers
• Africa is the next big story after China and India
Source: SARB, STATS SA, OFX, SARS
YEAR 1994 THEN 2004 IN 2016
GDP (billions) R 482
US$ 60
R 1 374
US$ 171
R 4 277
US$ 290.78
Merchandise exports
(billions)
R 69, 8
US$ 8.7
R 281,8
US$ 35.2
R1 100
US$ 74.79
GDP Growth 3,2% 4,6% 0,3 %
South African Trade 2016
Export Partners R bn Import Partners R bn
1. China 100,2 1. China 199,0
2. Germany 82,0 2. Germany 129,6
3. USA 80,6 3. USA 72,8
4. Botswana 54,6 4. India 45,6
5. Namibia 52,0 5. Saudi Arabia 41,7
Bilateral Trade (2016)
• SA exports to Portugal: R2.05 bn
• SA imports from Portugal: R3.05 bn
• Trade deficit : R1.00 bn
Bilateral Trade – Trend
2012
(RANDS)
2013
(RANDS)
2014
(RANDS)
2015
(RANDS)
2016
(RANDS)
2017 (Jan-July)
(RANDS)
Exports to
Portugal
690 945
762
1 200 358
299
1 476 050
492
R 1 610 097
099
R 2 049 982
246
R 1 348 874
771
Imports
from
Portugal
1 295 608
812
2 114 379
756
2 150
830 181
R 2 568 909
135
R 3 053 531
820
R 1 984 787
281
SA Exports (2016)
Product Value in R million
Vegetables 749.3
Live animals 464.7
Mineral Products 212.8
Vehicles aircraft & vessels 207.0
Plastics & Rubber 131.8
Chemicals 106.8
Machinery 77.5
SA IMPORTS (2016)
Product Value in R million
Vehicles aircraft & vessels 778.7
Machinery 651.1
Textiles 234.9
Plastics & Rubber 227.8
Products Iron & Steel 199.7
Prepared foodstuffs 195.3
Equipment Components 155.2
Market Potential
• Prepared foodstuffs incl. fish
• Automotive, transport equipment and components
• Agro-processing
• Textiles (threads and fibres)
Global Export Platform – Market Access
Arrangements
• South Africa – European Union (EU) Trade, Development
and Co-operation Agreement (TDCA) and Economic
Partnership Agreement (EPA)
• Southern African Development Community (SADC) FTA
• T-FTA SADC-EAC-COMESA
• Southern African Customs Union (SACU) - European Free
Trade Association (EFTA) FTA
• USA Africa Growth and Opportunity Act (AGOA)
SONA 2015
Resolving the Energy challenge
Revitalizing Agriculture & the
Agro-processing value chain
Advancing Beneficiation/adding value to our mineral wealth
More effective implementation of a higher impact Industrial Policy Action Plan
Encouraging private sector Investment
Moderating Workplace conflict
Unlocking the potential of SMME’s, Cooperatives and Township & Rural
enterprises
State reform and boosting the role of state-owned companies, ICT
infrastructure/broadband roll out, water, sanitation and transport infrastructure
Operation Phakisa aimed at growing the ocean economy & other sectors
Government Priorities
Government Priorities to stimulate growth
Priority Sectors For FDI
13
• Advanced Manufacturing
• Nanotechnology
• Metals
• Mining & Beneficiation
• Biofuels
• Agribusiness
• Automotives & Components
• Capital Equipment
• Precision engineering
• Aerospace
• Film production
• Tourism
• Oil & Gas
• Boat Building
• ICT and electronics
• BPO (Business Processing &
Outsourcing) and Call Centres
• Chemicals & Biochemicals
• Plastics & Composites
• (Bio) Pharmaceuticals & Medical
Devices
• Leather and footwear
• Forestry products & Furniture
• Energy and Renewables
• Infrastructure Development
• Waste Management
• Energy Efficiency & Cleaner
Technology
Electronics
Opportunities for investment
• Public Procurement is one of the key strategic levers for industrial development
objectives in the NGP and IPAP.
• The revised Preferential Procurement Policy Framework Act (PPPFA)
Regulations, which came into effect on 7 Dec 2011, empower the dti to
designate industries – within Electronics, the following areas have been
designated:
Project Local Content
Set-top boxes 30%
Residential Electricity meters 50%
Power and Telecom cables90%
Electronics
Localisation Opportunities
• Mobile devices: Laptops, Tablets & Smartphones, televisions
• Vaccine Refrigerators
• Smoke Detectors
• Fridge Compressors
• 2 way radios
• White Goods: Strategy under development
• Electricity/Power related products such as Transformers
• Localisation of radar systems
• Creation of regional value chains to manufacture components,
display panels and finished products
Pharmaceuticals and Medical Devices
Opportunities for investment• Key opportunities for growing the pharmaceutical and medical devices
sectors include:
─ Expanding the range of generics manufactured in South Africa,
taking advantage of the “Patent Cliff” (pharmaceuticals with global
sales US$ 200 billion losing patent protection in 2013-2014-2015)
─ Starting the domestic manufacture of advanced generic biological
medicines, including the newly off-patent oncology and anti-auto
immune diseases products, under licence and/or with foreign
investors.
─ Expanding regional co-operation and exports of medical products to
SADC and the rest of Africa.
Continued…
─ Medical Devices: low hanging fruit – refurbishment of existing and
single-use devices
─ Possible designation of medical textiles
─ API (Active Pharmaceutical Ingredient) manufacture – list of 200
chemicals from DoH
─ Manufacture of medical diagnostics
─ Manufacture of vaccines and biologics
─ Investment in R&D – clinical trials in SA due to diverse patient
populations in SA
The Green Economy Accord
• The Green Economy Accord – signed in 2011: Identifies various priority
areas including
➢ Rollout of 1 million solar-water heating systems
➢ Increasing investment in the green economy through public and
private investors (including the Industrial Development Corporation)
➢ Procurement of renewable energy as part of energy generation plan
➢ Promotion of biofuels for vehicles
➢ Promoting energy efficiency across the economy
➢ Waste management and recycling
➢ Reducing carbon-emissions on the road – a shift to rail for freight-transport
➢ Economic development in the green economy – promote localisation,
youth employment, cooperatives and skills development
Green Economy Subsectors
• Renewable energy: wind, solar, biogas, biomass - focus on manufacturing of components
• Waste Management and Waste to Energy
• Energy efficiency and demand management initiatives
• Biofuels – gas to energy
19
Renewable Energy• REIPPP has led to investment of more than ZAR 100bn (approximately
US$10bn) in the first three rounds of the programme.
• In the Climatscope 2014 report released by Bloomberg New Energy, SA was
ranked third, after China and Brasil, for investment in clean energy, accounting
for more than 90% of these investments in Sub-Saharan Africa
• South African REIPPP won the 2013 Green Infrastructure Project of the Year
Award at the 6th Global Infrastructure Leadership Conference
• Local content requirements incentivises local manufacturing
• Investors include Jinko Solar, ILB Helios, Art Solar (all PV), DCD Dorbyl, GRI,
Resolux (all wind energy), SMA (inverters)
REIPPP Investment And Local Content
Round 1 Round 2 Round 3 Round 4(excl. 13
projects from
round 4.5)
MW
remaining
capacity
Approved bids 28 19 17 13
Value of
approved
projects
US$3.2bn US$2bn US$2.4bn US$1,6bn
Local content
valueUS$0.8bn US$0.8bn US$1.1bn US$0.7bn
Local content %
(average for all
technologies)
23.7% 46.85% 47,2% 49,2%
MW Approved 1 415.6 1 044 1 456 1121 1488
Department of Energy
Investing into South Africa’s Automotive Industry
The Automotive Industry is the largest manufacturing sectorin the SA economy and contributed 7,4% of SA GDP in 2016.
Projected vehicle production in 2020 is around 1 millionwhich will result in an industry’s contribution to SA GDP toaround 10%.
BMW committed R6bn in 2017 in Rosslyn plant to produceX3 models
MBSA invested R200m in the production of AMG modelsand further R467m in the C Class sedan & C350 models
FORD SA followed suit by expanding their operations
Auto industry contribution to SA GDP
23
2014 2015 2016% change
2016 / 2015
Africa 61 839 42 234 21 564 -48.9%
Europe 116 077 173 805 195 764 +12.6%
North America 48 408 54 000 52 430 -2.9%
Asia 33 520 34 306 47 616 +38.8%
Australasia 14 610 22 948 22 735 -0.9%
South America 2 482 6 554 4 750 -27,5%
Changing Composition of SA Vehicle exports by major regions
2014 – 2016
Source: NAAMSA, AIEC, Lightstone Auto 24
Automotive component exports
2012 - 2016
Source: AIEC, SARS
2012 2013 2014 2015 2016
Total (R billion)
39.9 42.2 45.7 49.6 53.0
1. Germany 31.20% 28.60% 27.40% 27.60% 28.07%
2. USA 10.70% 8.80% 10.30% 13.10% 11.78%
3. Namibia n/a 4.89% 5.83% 5.62% 5.28%
4. Spain 3.20% 3.70% 4.30% 4.50% 4.51%
5. UK 5.40% 5.80% 6.30% 5.30% 4.15%
6. Thailand 2.20% 2.60% 2.20% 3.30% 4.01%
Other 47.30% 45.61% 43.67% 40.58% 42.19%
Component manufactured in South Africa
Engine, Transmission and Body Parts
Brakes, Wheels, Shock absorbers
Suspension, Exhausts, Windscreens
Electrical, Batteries & Filters
Interiors
INCENTIVE SCHEMES
CLUSTER INCENTIVE SCHEME
MANUFACTURING
INVESTMENT
•12i Tax Incentive
• Automotive Incentive Scheme (AIS)
• People-carrier Automotive Investment Scheme (P-AIS)
COMPETITIVENESS
INVESTMENT
•Manufacturing Competitiveness Enhancement Programme
(MCEP)
• Export Marketing & Investment Assistance (EMIA)
•Capital Projects Feasibility Programme (CPFP)
SERVICES
INVESTMENT
•Film & Television Production
• Business Process Services (BPS)
BROADENING
PARTICIPATION
•Black Business Supplier Development
Programme (BBSDP)
• Co-operative Incentive Scheme (CIS)
• Incubator Support Programme (ISP)
INFRASTRUCTURE
INVESTMENT
• Critical Infrastructure Programme (CIP)
INVESTING IN SOUTH AFRICA
Coega IDZ
East London IDZ
Richards Bay IDZ
OR Tambo International Airport (licensed)
Dube trade Port IDZ
Saldanha Bay IDZ
Contact:
Jacob Moatshe
Tel: +49 30 220 73171
Cell: + 49 172 906 4917
Email: [email protected]
REASONS TO INVEST IN SOUTH AFRICA – WORLD COMPETITIVENESS RANKINGS 2016
# 1 - Strength of auditing and reporting standards
#2 – Regulation of securities exchange
#3 – Protection of minority shareholders’ interests
#3 – Efficacy of corporate boards
#1 – Financing through local equity market
#6 – Availability of financial services
#8 – Soundness of Banks
#14 - Strength of investor protection
#14 – Quality of air transport infrastructure
#73 Overall ranking out of 189 countries and
#2 in Ease of doing business among BRICS countries in 2016
Top Investors
Trade and Investment South Africa (TISA) is the National investment promotion agency of South Africa offering a one-stop-shop approach to investing in South Africa
2014 UNCTAD winner for excellence in promoting Foreign Direct investment (FDI) projects to advance sustainable development
South Africa was ranked third in the world for investment in clean energy, according to Climatscope 2014 report released by Bloomberg New Energy finance
SA was voted overall winner for Africa by the Financial Times for the best destination for 2013 and 2014
In May 2013, AIM award for facilitating the second-best investment project (pharmaceutical sector)
2014 – Winner at AIM for sustainable development