Financial Data
Updated 27 May 2017


South Africa

Related sections

Overview

As a key investment location, South Africa not only offers its own market opportunities, but also serves as a gateway to the rest of the market on the African continent.

Important drivers for inward investment include the country’s status as the most advanced economy in sub-Saharan Africa and its strong tourism potential and mineral wealth; while the country’s preferential access to the EU market (through a free-trade agreement) and to the US market (under the African Growth and Opportunity Act (AGOA) also supports investment.

South Africa boasts a diverse economy, driven by the services industry. It is moving towards becoming a knowledge-based economy with a greater focus on technology, e-commerce, and financial and other services. 

Download fact sheet

Social overview

South-Africa-Brochure-Image

Population

A growing middle-class population offers immense opportunities for the development and growth of the retail, entertainment and tourism sectors. The country had an estimated 53 675 563 people in 2015, with the biggest proportion of the population consisting of young citizens. Almost 47% of the population falls in the 0-24 years age category.

A large percentage of 64.8% of the total population is urbanised, with urbanisation occurring at an estimated annual rate of 1.59% during 2010–2015. However, South Africa’s Gini co-efficient is one of the highest in the world. This indicates a significant disparity between the income and wealth of its poorest and richest citizens.

There are also concerns over the high youth unemployment, with only about 32% of the working-age young population (aged 15-34 years) employed. The country’s overall unemployment was at 25.5% in the third quarter of 2015.

Education

Education in the country remains of a poor quality in many areas, hampering the development of a skilled workforce that has secondary and tertiary education. As a result, there are limited job opportunities for the inadequately educated workforce.

However, substantial investment into education infrastructure and efforts by government to improve education standards and the overall attendance rate through various interventions are beginning to have an effect. This should reflect in higher enrolment figures and an improvement in the quality of both secondary and tertiary education.

Healthcare

The country’s healthcare system consists of a large under-resourced and over-used public sector that provides healthcare for 80% of the population, and a smaller, well-funded and well-equipped private sector. Preparations are in process for the rollout of a national health insurance system.

South Africa’s healthcare at a glance:

  • The country remains Ebola-free. In 2014, the South African government committed to R32.6 million for Ebola prevention and control measures, as well as for assistance to other countries
  • Key risk factors to healthcare include smoking, diabetes, obesity and poor sanitation, especially in rural and semi-rural areas
  • Unemployment, poverty and inequality remain challenges. These challenges are being addressed by the South African government through two key economic frameworks: The New Growth Path and Industrial Policy Action Plans (IPAP). These frameworks focus largely on job creation and the inclusion of historically disadvantaged groups in the mainstream of the industrial economy.
  • South Africa suffers from a high prevalence of HIV/Aids, which has social risks and can reduce economic growth in the longer term. There is discontent with government’s efforts to counter the rising threat of the disease.
  • The challenge of ‘brain drain’ of skills remains, with skilled workers leaving the country to look for better job opportunities abroad.

South-Africa-Factsheet-Image

South Africa’s people
  • 53 675 563 people in 2015.
  • Unemployment, poverty and inequality remain challenges.
  • A growing middle-class population off­ers immense opportunitiesforthe development and growth of the retail, entertainment and tourism sectors.
Environmental overview

The country’s government remains committed to helping find solutions to the problem of global warming. Part of the reason for this is that developing countries in particular will be suffering from the effects of global warming.

  • Current environmental problems include the growth in water usage which is outpacing supply, rivers are being polluted by agricultural runoff and urban discharge, air pollution is resulting in acid rain, and soil erosion and desertification are affecting the quality of available land
  • The country remains vulnerable to oil spills, as high levels of oil are transported from the Middle East to Europe and America along the coast. The environmental damage that follows affects the health of the country’s population as well as marine species that live in the area, while also contributing to the world-wide issue of climate change.
  • South Africa is party to the following international environment agreements: Antarctic-Environmental Protocol, Antarctic-Marine Living Resources, Antarctic Seals, Antarctic Treaty, Biodiversity, Climate Change, Climate Change-Kyoto Protocol, Desertification, Endangered Species, Hazardous Wastes, Law of the Sea, Marine Dumping, Marine Life Conservation, Ozone Layer Protection, Ship Pollution, Wetlands and Whaling.
The environment
  • The country’s government remains committed to helping find solutions to the problem of global warming.
  • Current environmental challenges include the growth in water usage which is outpacing supply; rivers are being polluted by agricultural runo­ff and urban discharge; air pollution is resulting in acid rain; and soil erosion and desertification are a­ffecting the quality of available land.
Technology overview

South Africa boasts one of the largest ICT markets in Africa. The country is considered to be the most advanced in terms of technology deployed and services offered.

THE TELECOMMUNICATIONS MARKET IN PERSPECTIVE:

  • Revenue from the country’s telecommunications market is expected to increase to R187 billion in 2016
  • Two fixed-line telecommunications groups operate in the country: Telkom and Neotel. The main mobile service providers are Vodacom, MTN, Cell C and Telkom
  • In addition, there are several mobile virtual network operators (MVNOs). The MVNOs do not have their own network infrastructure. Instead, they leverage third-party infrastructure for a fee. MVNOs include Virgin Mobile, MRP Mobile and newly launched me&you mobile.
  • The mobile market has experienced significant growth and is South Africa’s dominant technology for voice and data communication. This market has reached a mature stage.

Future growth in mobile subscriptions will be restricted owing to the already high mobile penetration of over 150%. The high penetration rate is due to ownership of multiple mobile phones, mostly because many users have separate work and personal subscriptions. Mobile penetration is expected to increase to 170% by 2017, with a 78% unique penetration rate.

A major concern and point of frustration for the South African consumer is the high cost of telecommunications. Government has repeatedly called on network operators to lower communications costs, arguing that high costs discourage investment in the country.

DATA COMMUNICATIONS IN PERSPECTIVE:

  • While the country has progressed with regards to Internet connectivity, it still has a long way to go before all South Africans can enjoy affordable and reliable access. According to estimates, South Africa has a 49% Internet penetration rate and only 17% high-speed broadband penetration. Mobile has gained the largest share of the country’s broadband market.
  • Government has set a goal of a 100% broadband penetration rate by 2030. In pursuit of this goal, a national broadband policy, South Africa Connect, has been developed to guide the roll-out of services to the nation. According to World Bank research, every 10% increase in broadband penetration increases economic growth by 1.38%.
  • Consumers are becoming more self-sufficient through the use of Internet. By banking online or through mobile applications and mobile money services, consumers are forcing banks to adapt and create a different environment to offset the declining requirement for bank structures.

NETWORK INVESTMENTS:

  • South Africa’s network infrastructure is considered more robust than that of any of its African counterparts. In recent years, capital spend has been mostly directed at expanding second-generation (2G) and third-generation (3G) coverage. Mobile companies are, however, now also focusing on the roll-out of their long-term evolution (LTE) networks. LTE networks offer higher speeds than older technologies.
  • The importance of infrastructure sharing to promote effective competition, avoid duplication of investment in infrastructure, reduce the cost of services and realise universal access objectives is highlighted by the March 2015 National Integrated ICT Policy Review.

SOUTH AFRICAN OPERATORS ELSEWHERE IN AFRICA:

Large telecommunications companies operating across the country’s borders include MTN and Vodacom.

  • MTN is the continent’s largest telecommunications company. It operates in 22 countries across Africa and the Middle East. In 15 of the African countries, MTN has the largest market share. Nigeria is the company’s biggest market, with 61.2 million subscribers at the end of March 2015.
  • Vodacom operates in four countries outside South Africa – the Democratic Republic of Congo (DRC), Lesotho, Mozambique and Tanzania. Vodacom plans to expand into African countries with low mobile coverage and with the potential for growth in data services.
  • The African continent offers significant opportunities for telecommunications companies, as sub-Saharan Africa is considered to be the world’s fastest-growing mobile market.
  • Mobile banking has given consumers cheaper access to their finances, owing to a reduced need to travel and the lower overall cost of using a mobile phone for financial transactions. It also offers other services such as health insurance and lending, and the ability to pay or receive salaries and pay for services online.
Tech outlook
  • South Africa boasts one of the largest ICT markets in Africa.
  • The country is considered to be the most advanced in terms of technology deployed and services o­ffered.
  • According to estimates, South Africa has a 49% Internet penetration rate and only 17% high-speed broadband penetration. Mobile has gained the largest share of the country’s broadband market.
Rate It12345rating

Introducing the manufacturing opportunities in Africa

Manufacturing is a growth sector within Africa, offering business owners looking to expand into Africa a growth opportunity. Philip Myburgh, Head of Franchising, Rest of Africa discusses the manufacturing opportunities that Africa has to offer.

Login to comment