South Africa : Size, Accessibility, Economy, Trade & Market

INTRODUCTION
 South Africa, officially the Republic of South Africa,
is the southernmost sovereign state in Africa.
 It is bounded on the south by 2,798 kilometers of
coastline of Southern Africa stretching along the
South Atlantic and Indian Oceans, on the north by
the neighbouring countries of Namibia, Botswana
and Zimbabwe, and on the east by Mozambique
and Swaziland, and surrounding the kingdom of
Lesotho.

 South Africa is a multiethnic society encompassing
a wide variety of cultures, languages, and religions.
 Its pluralistic makeup is reflected in the constitution's
recognition of 11 official languages, which is among
the highest number of any country in the world.
 South Africa has the seventh-highest per capita
income in Africa. However, poverty and inequality
remain widespread, with about a quarter of the
population unemployed and living on less than
US$1.25 a day.
INTRODUCTION

MARKET SIZE
 TOPICS COVERED UNDER THIS SECTION ARE:-
 Demographics
 Per Capita Income
 Demand

DEMOGRAPHICS
Age structure
0-14 years: 28.3% (male 6,859,518/female
6,815,185)
4,866,121)
8,923,605)
1,950,499)
65 years and over: 6.3% (male
1,205,657/female 1,826,638) (2014 est.)

DEMOGRAPHICS
Dependency ratio
total dependency ratio: 53.9 %
youth dependency ratio: 45.2 %
elderly dependency ratio: 8.7 %
potential support ratio: 11.5 (2014 est.)

DEMOGRAPHICS
Median age
total: 25.7 years
male: 25.4 years
female: 26 years (2014 est.)

DEMOGRAPHICS
 Population growth rate -0.48% (2014 est.)
 Birth rate 18.94 births/1,000 population (2014 est.)
 Death rate 17.49 deaths/1,000 population (2014 est.)
 Net migration rate -6.27 migrant(s)/1,000 population
 note: there is an increasing flow of Zimbabweans into South Africa
and Botswana in search of better economic opportunities (2014
est.)
 Urbanizationurban population: 62% of total population (2011)
 rate of urbanization: 1.21% annual rate of change (2010-15 est.)
 Major cities - population Johannesburg 3.844 million; Cape Town
(legislative capital) 3.562 million; Ekurhuleni (East Rand) 3.357
million; Durban 3.012 million; PRETORIA (capital) 1.501 million;
Vereeniging 1.2 million; Bloemfontein (judicial capital) 468,000
(2011)

PER CAPITA INCOME
The Per Capita income of South
Africa is $12,240 whereas Per
capita income of India is $5350
and Per capita income of Lesotho
is $3160.

DEMAND
Crude & Refined Petroleum
Automobiles
machines (i.e. Computers, Laptops etc.)
Gold etc.

ACCESSIBILITY
TOPICS COVERED UNDER THIS SECTION
ARE:-
1.Market Access
2.Geographic Access

MARKET ACCESSIBILITY
 The Department of trade & Industry seeks to foster African
development, through regional and continental integration and
development, aligned to the objectives of the New Partnership for
Africa's Development (NEPAD).
 The Department of trade & Industry contributes to creating the
conditions that enhance the export of higher value-added products,
promote inward and outward investment, and preserve the space to
implement national development policies.
 the Department of trade & Industry broadens and strengthens
national consultative mechanisms both within government, and
between government and its stakeholders. Consultation between
departments, particularly within the intra-governmental cluster
system, with Parliament and stakeholders, primarily through the
National Economic Development and Labour Council (NEDLAC), are
focus areas in this regard.

GEOGRAPHICAL
ACCESSIBILITY

ECONOMY OF
SOUTH AFRICA
TOPICS COVERED UNDER THIS SECTION ARE:-
State of Liberalization
Growth Rate
Level and Rate of Industrilization
Fiscal Policies
CAD/GDP ratio- Level & Trend
Monetary Policy- Inflation & intrest rates -
Level & trend
Foreign Trade Policy.

STATE OF
LIBERALIZATION
 Trade liberalization has been at the center of South Africa’s
post-Apartheid development strategy. However, despite
considerable reforms, the country has failed to generate pro-poor
growth, with both unemployment and inequality worsening
over the last ten years.
 This raises concern that trade liberalization may have worked
against the country’s development objectives.
 The results suggest that trade policies have contributed to
increased poverty and that trade-induced technological
change has accelerated growth. However, liberalization has
changed the structure of production and exacerbated
income inequality.

 While all population groups have benefited from
trade-induced growth, it is higher-income and
African and White households who have benefited
more than lower-income and Asian and Colored
households.
 Trade reforms also contributed to the rising capital
and skill-intensity of production. Accordingly, the
decline in poverty has been small and it is higher-
income households that will benefit more from further
liberalization. Therefore, while there may not be a trade-
off between trade reform and poverty reduction, the
country should not rely on further liberalization to
generate pro-poor growth or address the prevailing
inequalities.
STATE OF
LIBERALIZATION

LEVEL OF
INDUSTRIALIZATION
 South African history of industrialization, the emphasis
was rather on the relationship between industrialization
as a definite phase of capitalist development and the
specific political model of the country.
 industrialization in SouthAfrica before 1924, but then
consider the conscious policy of industrialization through
protectionist policies, which is then seen as the turning-
point of local industrial development.
 industrialization in three phases, namely 1910-1933,1933-
1961 and post-1961.

1) industries that did not use moderntechnology to produce
competitively because of the Limited local market (e.g., the
explosives industry);
2)Industries that enjoyed a high degree of natural
protectionbecause of the high transport, insurance and
handling costs of imports; and
3) industries that had a competitive edge because of the
availability of raw materials.
LEVEL OF
INDUSTRIALIZATION

FISCAL POLICIES
 Government is committed to reducing the budget
deficit and stabilising debt. Despite weaker GDP
growth, the projected deficit for 2014/15 is 3.9 per cent
of GDP, just below the October 2014 estimate.
 Main budget non-interest expenditure has been
reduced by R25 billion over the next two years
compared with the 2014 Budget estimate.
 Capital is the fastest-growing area of non-interest
expenditure over the medium term, while goods and
services decline in real terms. Compensation stabilises
as a share of total expenditure.

FISCAL POLICIES
 Taxes will increase by R16.8 billion in 2015/16 as a result of
higher personal income tax rates, a 30.5 c/litre increase in
the general fuel levy and various excise duties. The Road
Accident Fund fuel levy increases by 50 c/litre,
generating R9 billion over the next two years.
 The Unemployment Insurance Fund (UIF) monthly income
contribution threshold is reduced to R1 000 for one year,
with no change in benefits. This will reduce the UIF surplus
by about R15 billion in 2015/16
 Therefore South Africa is having a contractionary Fiscal
Policy.

MONETARY POLICY
 Monetary policy in South Africa confronts the prospect of a
prolonged breach of the inflation target, even as growth trends
lower.
 The policy rate has been increased, most recently by a quarter of a
percentage point at the March 2016 meeting of the Monetary Policy
Committee (MPC).
 This rate has now been raised by a total of 2 percentage points since
January 2014, when forecasts for inflation first began showing
significant risks of sustained target breaches.
 Monetary policy remains in a tightening cycle, although this is subject
to data outcomes.

MONETARY POLICY
 South Africa is part of this trend and the decision on the
appropriate monetary policy stance is taken by the
Monetary Policy Committee (MPC).
 This committee was constituted shortly before South Africa
adopted the inflation-targeting framework. The MPC
meetings are chaired by the Governor of the Bank.
 It consists of eight members of the Bank: the Governor,
three deputy governors and four senior officials of the
Bank.

FOREIGN TRADE POLICY
 The South African Government’s broad developmental strategy aims
to promote and accelerate economic growth along a path that
generates sustainable, decent jobs in order to reduce the poverty
and extreme inequalities that characterise South African society
and economy.
 Successful developing economies have adopted a strategic
approach to tariff policy.
 In the early 1990s, South Africa’s average tariff was around 23%. It
now stands at 8.2%. In 2006, the proportion of zero rated tariff
lines rose to about 54%. There has also been considerable
simplification of the tariff regime.

FOREIGN TRADE POLICY
 In 1990, the tariff schedule consisted of 13609 tariff lines
and 28% were subject to import control. By 2006, the
number of tariff lines had been reduced to 6420, a
decline of 53%, and import controls were eliminated.
 The South Africa-EU TDCA, the SADC Trade Protocol
and the SACU-EFTA FTA have further reduced the overall
incidence of tariff protection. The South African
economy is now moderately protected by tariffs.

TRADE OF SOUTH AFRICA
TOPICS COVERED UNDER THIS SECTION ARE:-
 MAJOR EXPORTS
 MAJOR IMPORTS
 MAJOR DESTINATIONS OF EXPORTS
 MAJOR DESTINATIONS OF IMPORTS

MAJOR EXPORT
DESTINATIONS

MAJOR IMPORT
DESTINATIONS

MARKET OF
SOUTH AFRICA
 TOPICS COVERED UNDER THIS SECTION ARE:-
 NATURE & STATE OF CAPITAL MARKET
 FINANCIAL SECTOR & INSTITUTIONS
 EDUCATIONAL INSTITUTIONS
 REGULATORY & LEGAL FRAMEWORK
 TYPES & LEVELS OF TRADE BARRIERS

CAPITAL MARKETS IN SA
 The significance of South Africa's capital markets in the economy is
substantial. The stock market is worth almost twice the country's output,
andis larger than the bourses of, for example, Mexico, Indonesia and
Turkey signicantly larger economies. The currency, bond and derivatives
markets are all among the worldís twenty largest by turnover.
 Capital market variables are volatile and largely unpredictable, but
influence the outcomes and ectiveness of economic policy, especially of
monetary and fiscal decisions in addition to the evident interest to
financial market participants.
 The currency is a common speculative target, which can affect
exchange rate dynamics. Arbitrage in the fixed income market inuences
the yield curve, which affects the monetary transmission mechanism, and
long-term investment.

EDUCATION
 The adult literacy rate in 2007 was 88.7%.[168]
South Africa has a 3 tier system of education
starting with primary school, followed by high
school and tertiary education in the form of
(academic) universities and universities of
technology. Learners have twelve years of formal
schooling, from grade 1 to 12. Grade R is a pre-
primary foundation year. Primary schools span the
first seven years of schooling.High School
education spans a further five years. The Senior
Certificate examination takes place at the end of
grade 12 and is necessary for tertiary studies at a
South African university.

LEGAL & REGULATORY
FRAMEWORK
 The Constitution of South Africa is the supreme rule
of law in the country. The primary sources of South
African law are Roman-Dutch mercantile law and
personal law with English Common law, as imports
of Dutch settlements and British colonialism.The first
European based law in South Africa was brought
by the Dutch East India Company and is called
Roman-Dutch law. It was imported before the
codification of European law into the Napoleonic
Code and is comparable in many ways to Scots
law. This was followed in the 19th century by English
law, both common and statutory. Starting in 1910
with unification, South Africa had its own
parliament which passed laws specific for South
Africa, building on those previously passed for the
individual member colonies.

 The judicial system consists of the magistrates' courts, which
hear lesser criminal cases and smaller civil cases; the High
Courts, which are courts of general jurisdiction for specific
areas; the Supreme Court of Appeal, which is the highest
court in all but constitutional matters; and the Constitutional
Court, which hears only constitutional matters.
 The private security industry in South Africa is the largest in the
world,with nearly 9,000 registered companies and 400,000
registered active private security guards, more than the South
African police and army combined. Many emigrants from
South Africa also state that crime was a big motivator for
them to leave.Crime against the farming community has
continued to be a major problem
LEGAL & REGULATORY
FRAMEWORK

TYPES AND LEVELS OF
TARIFF & NON TARIFF BARRIERS
 In the early 1990s, South Africa’s average tariff was around 23%. It now
stands at 8.2%. In 2006, the proportion of zero rated tariff lines rose
to about 54%. There has also been considerable simplification of the
tariff regime.
 In 1990, the tariff schedule consisted of 13609 tariff lines and 28%
were subject to import control. By 2006, the number of tariff lines had
been reduced to 6420, a decline of 53%, and import controls were
eliminated.
 The South Africa-EU TDCA, the SADC Trade Protocol and the SACU-
EFTA FTA have further reduced the overall incidence of tariff
protection. The South African economy is now moderately
protected by tariffs.

REI IN WHICH
SOUTH AFRICA IS
PRESENT
 African Union (AU)
 New Partnership for Africa's Development (NEPAD).
 Group of 77
 Southern African Development Community,
 South Atlantic Peace and Cooperation Zone,
 Southern African Customs Union,
 Antarctic Treaty System,
 World Trade Organization,
 International Monetary Fund,
 G20 and
 G8+5.

DEPTH AND LEVEL OF
INTEGRATION
SA is increasing its participation
in all groups by liberalizing its
economy.

South Africa : Size, Accessibility, Economy, Trade & Market

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