Incentive Seminar | 14 August 2014 | "Growth in Africa" Speakers notes by Deena Chetty
In seminar 19.10.12 south africa
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Transcript of In seminar 19.10.12 south africa
South Africa
October 2012
South - North
GMT +2
GMT + 1-2
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This is Africa
South Africa is found at the southern tip of the
African continent and is made up of 9 provinces.
2. Key Facts and FiguresLand area: 1.2 million sq kmPopulation: 50.6 millionHead of State: President Jacob ZumaCapitals: Pretoria (administrative),
Cape Town (legislative), Bloemfontein (judicial)
Languages: Afrikaans, English, Ndebele, Pedi, Sotho, Swazi, Tsonga, Tswana, Venda, Xhosa and Zulu
Unemployment: 25%Currency: ZARConversion: ZAR = NOK 0.7GDP: 2.7% (1st quarter 2012)Inflation (CPI): 6.10%Exports: R52.2 billion (April 2012)Imports: R62 billion (April 2012)Seasons:Summer Oct to Mar (15C to 35C)Winter May to Sept (0C to 20C)
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BRICS
• South Africa is increasingly gaining prominence on the international stage and is becoming a more active participant in events such as the International Monetary Fund, the World Bank and the G-20.
• Recently the 2010 World Cup was hosted and the COP 17 held in Durban in 2011.• World Economic Forum’s Global Competitive Index provides a comparison:
3. A Globally Competitive Economy
South Africa
Rank(out of 139)
Score(1-7)
GCI 2010 - 2011 54 4.3GCI 2009 - 2010 (out of 133) 45 4.3GCI 2008 - 2009 (out of 134) 45 4.4
Basic requirements 79 4.4Institutions 47 4.4Infrastructure 63 4.0Macroeconomic environment 43 5.0Health and primary education 129 4.1
Efficiency enhancers 42 4.4Higher education and training 75 4.0Goods market efficiency 40 4.5Labour market efficiency 97 4.1Financial market development 9 5.3Technological readiness 76 3.5Market size 25 4.8
Innovation and sophistication factors 43 3.9Business sophistication 38 4.4Innovation and sophistication factors 44 3.5
Norway
Rank(out of 139)
Score(1-7)
GCI 2010 - 2011 14 5.1GCI 2009 - 2010 (out of 133) 14 5.2GCI 2008 - 2009 (out of 134) 15 5.2
Basic requirements 17 5.6Institutions 6 5.8Infrastructure 29 5.0Macroeconomic environment 18 5.4Health and primary education 24 6.3
Efficiency enhancers 12 5.1Higher education and training 12 5.6Goods market efficiency 23 5.0Labour market efficiency 15 5.0Financial market development 5 5.4Technological readiness 9 5.6Market size 44 4.3
Innovation and sophistication factors Business sophistication 14 5.2Innovation and sophistication factors 18 4.5
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Business Structures
South Africa comes from a background where centralized power was held in
the hands of a few corporations who dominated the Johannesburg Stock
Exchange.
The post-apartheid leadership of Mandela and Mbeki sought to reduce this
influence by introducing B-BBEE (Broad Based Black Economic Empowerment)
by encouraging large SA conglomerates to sell off some of their local business to
local black consortiums.
Despite the intentions of B-BBEE, the economy is still primarily in the hands of
white ownership.
Monopolies exist in the food, agro-processing and forestry, the infrastructure
and construction, industrial products (chemicals and metals) and financial
services sectors. The Competition Act has prioritized these sectors in order to
promote and maintain competition.
International businesses who avoided South Africa in the apartheid years also
re-entered the market creating a diverse landscape.
The role of the trade union movement has a strong influence on labour and
working conditions.
Foreign companies wanting to do business must do research on the
environment and the companies with they hope to engage with.
Financial figures for private companies are not readily available and it is
recommended that due diligence is undertaken to mitigate risk.
Zwelinzima Vavi
General Secretary
Congress of South African
Trade Unions (COSATU)
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Management StyleTraditional South African business tended towards the accumulation of power and decision-making in the hands of a few senior managers.
Post-apartheid leadership has changed this and with the increasing number of multi-nationals entering the market, hierarchies are breaking down and decision-making has undergone a change.Managers need to be seen to be in command of the facts and be seen to be involving teams / business units.
A respectful and dependable leadership approach is favoured.
Corporate culture has changed and consists of a rainbow nation of cultures as BBBEE was enforced.
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The big Mac index gives an indication of a country’s price level
Key Sectors
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Sector priorities
ICT
• Wireless• Mobile• Satellite• Telecom• Software• Hardware
South Africa is one of the fastest growingmobile technology markets in the world
ICT Sector Characteristics
High level of growing competition; Innovation of products and services (2nd country
globally to introduce prepaid services); Opportunities for Norwegian companies involved in
the development of new applications & systems, e.g.
Wireless applications Biometrics Financial Sector – mobile money / payment
systems Asset tracking and security SIM-based metering Use of ICT to address infrastructure
shortcomings, e.g. E-education / e-Schooling E-Government and E-health
Why Consider South Africa?
IT spending is expected to increase from USD 9.5 billion (2010) to USD 14.4 billion (2014).
Spending influenced by telecoms, banking & mining sectors.
Driven by continued improvement in ICT infrastructure and bandwidth availability (installation of undersea cables).
Internet penetration in SA is the highest on the continent. Mobile Internet is expected to increase to 36.5 million by 2014).
Mobile has become ubiquitous. All of the different classes within the diverse South African economy are relying upon Mobile for typical communication (voice and SMS) but also more and more for News, Information and Entertainment.
% o
f popula
tion
AMPS ‘09
Success Stories
“Norphonic’s VoIP Mining Telephones proved to be immenselypopular at our stand this year, demonstrating that the mining industry is serious about its role in improving communicationsand safety for exposed mining workers”. Albert Bower, Managing Director at Becker Electronics, Norphonic’s partner in South Africa(introduced in March 2010, through BMMP)
Boost recently appointed a Senior Business Development Manager to manage their business in South Africa. They currently have the Times, Avusa Media, The Times, The Sowetan & Kaizer Chiefs as customers. (introduced in 2008, through BMMP)
The two weeks in South Africa have been two very productive weeks for Vidamo and a real break-through. I must first honour the BMMP programme as a very well organized concept and with remarkable good research and matchmaking from the team. The results for Vidamo has been over all expectations and we are know in time-to-market phase where we have no time to lose. We are entering into several partnerships and with support from the BMMP we seem to be able to be a dominant player within short time in the South African mobile universe. Haakon Haarberg, CEO
Sector priorities
Oil & Gas
Petroleum and maritime network office launched in Cape Town in August 2010
8 Norwegian companies
Examples of Norwegian companies involved in this sector
Oil and Gas
Sector priorities
• Oil and Gas• Solar• Hydropower• Wind• Distribution• Transmission• Generation
Energy and Environment
•SA generates two-thirds of Africa’s electricity
•SA power suppliers provides the fourthcheapest electricity in the world
• Gov has prioritised Renewable Energy, and aim for 10 000 GwH to be delivered by 2013;
• Focus on energy from: • biomass,• wind, • solar and • small-scale hydro.
Opportunities : Energy sector
Scatec Solar in South Africa
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• 75 MW, enough to cover the electricity demand of 35.000 households
• Produce in exess of 145 million KWh
• Covering an area of 140 football fields
20 year Power Purchase Agreement
• Represents CO2 abatements of approx 125.000 tonns per year
• Investment in the range of 1,5 mrd. NOK
• Green Business Opportunities exist in:
•Industrial Waste Water treatmentOpportunities for Technologies and Equipment, particularly on a municipal level;
•Waste Technologies:Huge opportunity for alternatives to Landfill which is a growing problem;Waste to Energy technology in high demand; •Recycling technologies in demand
Opportunities : Energy sector
Energy sector
Examples of Norwegian companies involved in this sector:
Sector priorities
• Foodstuff• Vegetables & Fruit• Beverages• Raw Materials (metal scrap)• Semi Manufactured Products• Engineering Products
TRADE
Trade
Examples of Norwegian companies involved in this sector
Business MatchMaking Programme 2010-2012 (BMMP)
A gateway to new markets
IntroductionBMMP is owned and financed by the Norwegian Agency for Development Cooperation (Norad).
Innovation Norway administrates the BMMP for three countries.
PurposeBMMP aims at encouraging cooperation between businesses,
and contributing to increased business activity through transfer of Norwegian technology, competence, capital and production know-how.
Target groups and Sector focus
Maritime Marine Oil and Gas
Renewable Energy
ICT Environ-mental
technology
Trade
Focus on SMEs, but also larger companies can participate.
BMMP is open for all sectors. However, we focus on sectors where Norway has strong competence.
Forms of cooperation
• Joint Venture
• Establishment of a fully
foreign-owned company
• Licensing agreements
• Project based cooperation
(long term or large projects)
• Outsourcing
• Trade
Photo: Anders Nielsen/Innovation Norway
Who we are
Bjørn Eriksen – Commercial Counsellor Head of Innovation Norway office Commercial Counsellor at the Norwegian Embassy Second posting in South Africa Economic and technical background Experienced in business development and internalization
Beverley Lewis – Market Advisor Bachelor Degree in Business Administration Facilitates & manages NORADs Matchmaking Program ICT sector responsible
Andre Kruger – Senior market advisor -Cape TownAndre has worked with Norwegian businesses for more than 10 years through the Match Making ProgrammeResponsible for petroleum and maritime sector
Rae Koetsie – Personal Assistant• Office administration•Office Accounting