Population (2018): 57.7 million
GDP (2018): US$ 366.2 billion
World Bank “Ease of Doing Business” Rank (2018): 82
South Africa is a populous nation of around 55 million. About 40% of its people are aged 25 to 54, making it a young population that is open to various service and retail segments. The country saw a rapid rise in wealth after the ending of apartheid in 1994, and is now the second largest economy in Sub-Saharan Africa.
Due to its rapid economic growth, the country is one of only four states in Africa that have an upper-middle income economy today, with a growing and affluent consumer class.
In 2017, South African consumers spent around US$ 70 billion on retail alone, or about US$ 2,200 per second. The country is also experiencing a growth in e-commerce, and a rise in social media use. The number of South Africans using Facebook has increased by 14% since 2016 to reach 16 million users. India’s digital companies can find early opportunities in South Africa, where markets are still far from saturation.
World Class Systems
South Africa is a financial hub, and financial services companies from India will find it a familiar environment. The Johannesburg Stock Exchange is the 19th largest stock exchange in the world by market capitalisation (about US$ 1 trillion at end 2013), and is the largest in Africa. Over 400 companies are listed on the exchange.
South Africa has one of the most sophisticated telecommunications systems in the world, with its Information and Communications Technology (ICT) industry contributing more to GDP than its dominant agricultural sector. The country has more than 29 million internet users, with a 54% internet penetration rate. Businesses and investors can have access to fast teleconferencing via Voice over Internet Protocol (VoIP) services, as well as find the capacity for complex e-commerce transactions.
More recently, South Africa has also established itself as a prime location for Business Process Outsourcing (BPO). The country’s well-developed telecommunications network, combined with a predominantly English-speaking populace and high level of education, is transforming it into an ideal call centre location for multinational companies.
Rich in Natural Resources
South Africa has a long-established reputation as a gold and diamond producer. The country has some of the world’s largest natural reserves of chrome ore, gold, manganese, and platinum group metals. Diamonds and other gemstones are also commonly mined in South Africa. South Africa also has large coal reserves, producing in excess of 252 million tonnes in 2017. 92% of the coal consumed on the continent comes from South Africa. This provides numerous opportunities for investors familiar with the energy sector.
Gateway to Southern Africa
South Africa’s location provides easy access to 15 other countries in the Southern African Development Community. This provides a total potential market of over 270 million people.
Due to the sophisticated infrastructure of the country, as well as its relatively young and educated workforce, South Africa is the destination of choice for many multinational companies first reaching into Africa.
South Africa also provides a logistical advantage. City Deep, in South Africa’s Gauteng province, is the largest dry port in Africa. It is the main source of freight to several landlocked African states, including Botswana and Zimbabwe. This can provide a convenient hub for businesses that need to move product into other parts of Africa.
There are an estimated 20 million e-commerce users in South Africa, and the number is expected to grow to 24.8 million by 2021. While still in its early stages, South Africa’s e-commerce market has seen significant growth of over 20% every year, since around 2000.
South Africa has high rates of mobile penetration, at 68% or 37.5 million unique mobile subscribers. The country’s online shoppers are increasingly making purchases on mobile devices – between 2015 and 2016, growth in online spending via mobile device increased by an estimated 65%. This is expected to further increase by 123% by 2018, as mobile penetration rates rise.
The bulk of online purchases are downloadable digital entertainment and education (53%), event tickets (47%) and clothing, apparel, or footwear (45%). As English is a common language, this provides an opportunity for content developers in India, along with event and retail businesses. Besides South Africa, the continent as a whole is seeing a growing trend in e-commerce.
Information and Communications Technology
In 2017, South Africa was ranked the third best African country for information and communication technology (ICT) infrastructure by the International Telecommunication Union. The country has five cellular providers that service over 20 million subscribers, giving it one of the most advanced mobile telecommunications networks in the world. The ICT infrastructure features a full digital system, and sophisticated wireless and satellite communication.
The government plays a significant role in the ICT industry growth, with public sector ICT spending expected to rise to US$ 717 million by 2019. Key drivers include IT outsourcing, and managed services.
South Africa’s global ICT and business process service industry grew by 22% a year from 2014 to 2018. In particular, the Cape Town region has become a major hub for call centres and business process outsourcing (BPO). Corporations with call centres there include Amazon, Lufthansa, Walmart, and many other major multinational firms.
A key reason for South Africa’s thriving BPO industry is the high level of fluency in English, as well as good educational standards, in the local workforce. Indian companies can find many opportunities for collaboration, such as in providing technical support or training needs for this sector.
South Africa’s government is also seeking to expand online government services, as its ICT sector and internet users grow more advanced. This provides business openings for Indian firms, in areas such as intra-government networks, public service delivery, and government-to-business transactions.
South Africa needs to improve the country’s extensive rail and road networks. Gauteng, one of the main provinces in South Africa, is situated 600 km from the nearest port. The country’s leading exports, such as coal, iron ore, and manganese, also need to be transported from deep within the country’s interior. South Africa thus requires extensive freight infrastructure, to overcome the logistics involved.
The country’s existing rail network is the 14th largest in the world, stretching 21,000 km. 95% of the rail network was built before 1938, and much of the network requires substantive upgrading.
South Africa also has the longest road network on the continent, at approximately 750,000 km. Roads account for around 89% of the country’s freight movement. While 90% of the road network is considered to be in good condition, around 78% of the roads are now older than their designated 20-year lifespan.
Indian companies with expertise in these areas can find high demand for their services. Expertise in related industries, such as in freight logistics, will likewise find opportunities in South Africa.
South Africa has one of the most established tourism industries in Africa. Tourism accounts for about 3% South Africa’s GDP in 2017, and provides 4.5% of total employment.
South Africa’s most recent tourism triumph was successfully hosting the World Cup in 2010, during which the country drew over 8 million visitors. As of 2017, the country receives around 8 million visitors a year, mainly from the United States, United Kingdom, and Germany.
South Africa’s government considers its tourism industry to be a key sector. Since 2011, its National Tourism Sector Strategy has seen the inclusion of e-visas, regional visa schemes, and visa-waiver programmes.
Prime tourist attractions in South Africa are its natural landscapes, a rich culture and heritage, game reserves, and local winemakers. The most popular destinations are Kruger National Park, the coastal resorts along the Western Cape, and the historic cities of Cape Town, Johannesburg, and Durban.
South Africa is also on a drive to increase its popularity as a business destination. Cape Town ranked as one of the best cities in Africa for business tourism in 2017, and South Africa hosts around one million business delegates every year.
There are ample opportunities for Indian businesses in the hospitality industry to expand into South Africa. This will be aided by the widespread use of English (among both locals and the bulk of tourists), and the country’s long established reputation as a tourism hotspot.
Commercial relations have flourished since the establishment of diplomatic relations in 1993. India’s imports from South Africa in 2012-13 and 2013-14 declined mainly due to restrictions on gold imports by GOI. Recent bilateral trade figures are as follows:
There is substantial potential for trade growth between the two countries. Exports from India to South Africa include vehicles and components thereof, transport equipment, drugs and pharmaceuticals, engineering goods, footwear, dyes and intermediates, chemicals, textiles, rice, gems and jewellery, etc. Imports from South Africa to India include gold, steam coal, copper ores & concentrates, phosphoric acid, manganese ore, aluminum ingots & other minerals.
India-South Africa Business Summit
To explore additional areas of cooperation for growth of bilateral trade and investment, the India-South Africa Business Summit (ISABS) 2018 was held in Sandton, Johannesburg from 29-30 April, 2018. Then Commerce and Industry and Civil Aviation Minister (CIM) of India, Shri Suresh Prabhu led the Indian delegation for this Summit. Dr Rob Davies, Minister of Trade and Industry, Mr Pravin Gordhan, Minister of Public Enterprises and Ms Lindiwe Zulu, Minister of Small Business Enterprises, represented the South African Government at the Summit. The Premier of Gauteng province, Mr David Makhura also participated in the event.
An Invest in India Business Forum (IIBF) was held at the Sandton Convention Centre, Johannesburg on 12-13 November 2018 to follow-up on the ISABS 2018, the visit of the Minister of Food Processing Industries to South Africa in June 2018 and to familiarize the potential South African investors with the investment and business friendly India. Mr.Bulelani Magwanishe, the South African Deputy Minister of Trade and Industry visited India from 25-26 June 2018 on an investment mission to India. This visit follows on the South Africa – India Business Summit held in Sandton in April 2018.
The third India-South Africa CEOs forum was held in Pretoria during the visit of Prime Minister of India to South Africa. During the meeting of the India-South Africa CEO’s Forum, 8 MoUs were signed. The fourth meeting was held in Sandton, Johannesburg in the margins of the India-South Africa Business Summit from 29-30 April 2018.
|Product Code||Product Label||India’s exports to South Africa in 2018 (Value in USD millions)|
|’87||Vehicles other than railway or tramway rolling stock, and parts and accessories thereof||847304|
|’27||Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral …||549722|
|’85||Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television …||215131|
|’84||Machinery, mechanical appliances, nuclear reactors, boilers; parts thereof||208280|
|’89||Ships, boats and floating structures||198303|
|’61||Articles of apparel and clothing accessories, knitted or crocheted||105061|
|’39||Plastics and articles thereof||92587|
|’73||Articles of iron or steel||90774|
|Product Code||Product Label||India’s imports from South Africa in 2018 (Value in USD millions)|
|’27||Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral …||3102.9|
|’71||Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad …||1542.4|
|’26||Ores, slag and ash||748.9|
|’72||Iron and steel||231.3|
|’47||Pulp of wood or of other fibrous cellulosic material; recovered (waste and scrap) paper or …||194.6|
|’84||Machinery, mechanical appliances, nuclear reactors, boilers; parts thereof||133.7|
|’28||Inorganic chemicals; organic or inorganic compounds of precious metals, of rare-earth metals, …||76.2|
|’76||Aluminium and articles thereof||75.9|
|’74||Copper and articles thereof||71.9|
|Product Code||Product Label||India’s exports to United Arab Emirates in 2018 (Values in USD million)|
|’71||Natural or cultured pearls, precious or semi-precious stones, precious metals, metals clad …||9800.3|
|’27||Mineral fuels, mineral oils and products of their distillation; bituminous substances; mineral …||6679.5|
|’85||Electrical machinery and equipment and parts thereof; sound recorders and reproducers, television …||1342.6|
|’89||Ships, boats and floating structures||1315|
|’61||Articles of apparel and clothing accessories, knitted or crocheted||1094.7|
|’62||Articles of apparel and clothing accessories, not knitted or crocheted||803.5|
|’72||Iron and steel||681.9|
|’84||Machinery, mechanical appliances, nuclear reactors, boilers; parts thereof||639.4|
High Commission of India in South Africa
852 Schoeman St, Arcadia, Pretoria, 0083, South Africa
Ph: (012) 342 5392
CONSULATE GENERAL OF INDIA, CAPE TOWN
Address: The Terraces, 8th Floor 34 Bree Street
Cape Town 8001
Office Hours : 0900 hrs to 1730 hrs (Monday to Friday)
Telephone : +27 21 419 8110, 419 8111
Facsimile : +27 21 419 8112
Email : email@example.com
CONSULATE GENERAL OF INDIA, DURBAN
Address : Physical Address:1 Kingsmead Boulvard (2nd Floor)
Kingsmead Office Park
Postal Address : P O BOX 3276 Durban 4000
South Africa Office Hours: 0830 hrs to 1700 hrs (Monday to Friday)
Visa application : 0900 hrs to 1200 hrs
Telephone : General +27 31 335 0300
Facsimile : +27 31 332 7008
E-Mail IDs – firstname.lastname@example.org
CONSULATE GENERAL OF INDIA, JOHANNESBURG
Address : No.1, Eton Road (Corner Jan Smuts Avenue & Eton Road) Park Town 2193
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Office Hours : 0830 hrs to 1700 hrs (Monday to Friday)
Telephone : +27 11-4828484/5/6
Facsimile : +27 11 482 4648/482 8492
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