2.
South Africa at a glance 3. SADC and South Africa ANGOLA 4. 2004 Macroeconomic interventionsto accelerate growth and ensure social inclusion
ASGI-SA
Macro-Economic Policy 5. Achieving sustained and balanced growth Further, [c]onsistently prudent macroeconomic policies have succeeded in reducing the fiscal deficit, stabilising debt levels, and lowering inflation and interest rates;and the countrystands out among its peers due to its democratic and transparent institutions and entrenched political stability Economic advantages which create a positive environment Standard and Poors, August 2005 Cheap electricity Abundant mineral & natural resources A tested and reliable legal system A relatively large labour force Established industrial & financial infrastructure 6. Macro-Economic Stability Fiscal Policy Source: SARB 0 50000 100000 150000 200000 250000 300000 350000 400000 450000 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Gov. Revenue Gov. Expenditure 7. South African Economy Source: SARB 12,5% 12% 15,75% Prime Rate 4,6% 4,3% 9% (CPI) Inflation (CPIX) 25,5% 26,5% 20% Unemployment 5,0% 3,7% 3,2% GDP Growth 22,4% 20,2% 21,8% Total Foreign Debt / GDP R398,5 US$58,9 R281,8 US$43,6 R 69, 8 Merchandise exports (billions) R 35 994 US$ 5 324 R29 422 US$4 561 R 12 507 GDP per capitaR1 726 US$ 255 R1 374 US$ 213 R 482 GDP (billions) 2006 2004 1994 8. SAs Export Performance by Country - 2006 Source: SARS 1.4 9.3 10.Italy1.5 10.0 8. Spain 1.5 10.2 7.Belgium 1.7 11.6 9. Switzerland 2.0 14.0 6. China 2.6 18.0 5. Netherlands 3.0 26.8 4. Germany 4.7 31.7 3. United Kingdom 6.1 41.2 2. United States 6.1 41.3 1. Japan US$b Rb 9. Business Environment Infrastructure Source:ABSA 10. SAs Export Performance by Country 50,000.6 320,004.0 Total exports to all countries 1,310.5 8,387.0 China Ranked 9 1,360.1 8,704.5 Spain 1,361.5 8,713.9 Belgium 1,509.9 9,663.4 Australia2,216.8 14,187.5 Netherlands 3,234.5 20,701.0 Germany 4,747.8 30,385.9 United States 5,006.1 32,039.3 United Kingdom 5,146.2 32,935.5 Japan 2005 (US$m) 2005 (Rm)Country 59,513.2 380,884.3 Total exports to all countries 1,519.0 9,721.8 Belgium 1,558.7 9,975.5 Spain 1,596.0 10,214.5 Switzerland 2,122.6 13,584.6 China Ranked 6 2,697.1 17,261.5 Netherlands 4,117.8 26,354.1 Germany 4,889.3 31,291.6 United Kingdom 6,282.1 40,205.7 United States 6,380.2 40,833.0 Japan 2006 (US$m) 2006 (Rm) Country 11. SA-CHINABilateral Trade 12. SA-CHINABilateral Trade 7,295.8 46,693.2 Total Imports 5,254.7 33,629.9 Top 10 Products 181.6 1,162.3 H87: Vehicles other than railway, tramway 183.3 1,173.0 H73: Articles of iron or steel 217.9 1,394.3 H95: Toys, games, sports requisites 239.0 1,529.3 H94: Furniture, lighting, signs, prefab 248.7 1,591.9 H90: Optical, photo, technical, medical, etc 357.6 2,288.6 H61: Articles of apparel, accessories, knit or 444.8 2,846.9 H64: Footwear, gaiters and the like, parts488.6 3,127.0 H62: Articles of apparel, accessories,1,350.6 8,643.8 H85: Electrical, electronic equipment 1,542.6 9,872.8 H84: Boilers, machinery, etc US$m RmTop 10 Products Imports from China to SA 2006 2,122.6 13,584.6 Total Exports 1,932.7 12,369.0 Top 10 Products 29.9 191.6 H71: Pearls, precious stones, metals, coins 48.3 309.4 H51: Wool, animal hair, horsehair yarn and 49.5 316.6 H84: Nuclear reactors, boilers, machinery 50.6 323.9 H29: Organic chemicals 65.9 422.1 H75: Nickel and articles thereof 70.8 453.2 H74: Copper and articles thereof 104.0 665.8 H76: Aluminium and articles thereof 306.0 1,958.1 H27: Mineral fuels, oils, distillation product 361.3 2,312.3 H72: Iron and steel 846.3 5,416.1 H26: Ores, slag and ash US$m Rm Top 10 Products Exports from SA to China 2006 13. Business Environment Legal and Financial Markets
14.
Overall government plans for infrastructure spendingtotals some R416 bn/$ 59,4bnover the next 3 yearsInfrastructure Development To be spent by the three spheres of govt 50% To be spent through Public Private Partnerships 5% To be spent by development finance institutions 3% To be spent by State Owned Enterprises. 40% 15.
Core national programmes of SOEs R40bn/ $ 6,3bn for a range of core projects railways, ports, infrastructure & operations and petroleum pipeline
R 150 bn/ $21,4bnin the next 5 years for infrastructure investments and refurbishments, raised from cash flow and off its balance sheet: Infrastructure Development 16.
Core national programmes of SOEs Air Transport infrastructure
Infrastructure Development Water Infrastructure 17. An IDZ is located adjacent to aport allowing importation of rawmaterials, plant machinery &equipment; and the export offinished products; IDZs are considered part of the Customs Territory of South Africa. SARS Customs will performspecific controls within the CCA to provide forExpedited Services Coega ELN RCB JIA Customs Territory of South Africa Customs Controlled Area INDUSTRIAL DEVELOPMENT ZONES Industry & Service Area Customs Secured Area Services Enterprises OneStop Center IDZ 18. East London IDZ Multi-Level Car Terminal Containerisation Dry Dock & Ship Repair Grain Elevator 19. Johannesburg International Airport IDZ 20. RICHARDSBAYIDZ 21. NEW DEEPWATER PORT OF NGQURA
22. STRATEGIC GEOGRAPHIC POSITION TO GLOBAL SHIPPING ROUTES 23. Freight growth future requirements Excluding primary export haulage Million tons 2003 (Million tons 2020 MSA forecast) Source: CSIR and DOT 2003 24. Rail and port volumes and investmentPort Elizabeth East London Maputo Gauteng Mega Industrial Zone Sishen Beit Bridge Richards Bay Durban Saldanha Cape Town 17.8 334 Volume (mt) 0.6 19.5 Value (Rbn) Gauteng Mega Domestic Zone Rail Road 25. Leveraging SOE capex 26.
WHAT IS B-BBEE? *Black people include all African, Indian and Coloured South African Citizens (Source: Broad-based Black Economic Empowerment StrategyDepartment of Trade and Industry, March 2003) 27. Broad-Based Beneficiary Base The Poverty Barrier The Skills Barrier The Business Barrier The Opportunity Barrier Employment Equity/Job creation Corporate Social Investment Skills Development Preferential Procurement Ownership And Management Equitable Economic Opportunities Enterprise Development
Emerging black middle class &investors Black entrepreneurs Black workers, professionals, graduates, school-leavers Black unemployed & rural poor 28. Economic Implications of Broad-Based BEE
More economic participants Increased economic growth Mainstream economy BEE Upliftment Second economy 29. Promulgation of BEE Framework 2001 BEE Commissions Report 2003 Publication of the BB-BEE Strategy 2004 Promulgation of BB-BEE Act 2005 Release of the Codes of Good Practice Provision of clearly defined BEE framework coincides with increase in Business Confidence Business Confidence 30. Elements of Broad-Based BEE TransformingtheFirst Economy Addressing challengesof the First andSecond Economy Addressing challengesofSecond Economy Ownership Management Employment Equity Skills Development Preferential Procurement Enterprise Development Direct participation in Economic Activities (Shareholders and Management Team) Development of Human Capital (Current and prospective employees) Development and Investment in Affirmable Enterprises (Suppliers and communities) 31. Identified and approved ASGISA provincial projects National Livestock North West OTT Logistics hub and IDZ Gauteng Dilokong Platinum Limpopo Moloto Corridor (rail) Mpumalanga Cape Flats Infrastructure Western Cape Biofuels, Makhathini casava and sugarKZN Biofuels Free State Diamond and gem stone jewellery, National Livestock, biofuels,Northern Cape Mzimvubu Catchments & Biofuels Eastern Cape Project Province 32. Lead sectors for fast-tracking
33. Investment Opportunities Source: DTI/TISAHotels and self-catering holiday resorts, Adventure-, Eco-, Sport- Conference- and cultural tourism, gaming, infrastructure development, leisure complexes and world class golf courses, h arbour & waterfront developments,transfrontier conservation areas, cruise liners & transportation. Tourism Manufacturing of: automotive electronics, microchips and telecommunication equipment.Electro Technical
Business Process Outsourcing & IT Enabled Services
Chemicals and Allied Industries Interiors, Engine Parts/Components, Electronic, Drive Train Components, Body Parts, Aluminum Components and Diesel particulate filters. Automotives Fisheries and Aquaculture, Floriculture, Fruit and Vegetable Processing Plants, Juices, Meat Processing, Wine Production, Confectionery, Indigenous teas and Natural Fibres. Agro-processing Sub-sector Sector 34. Investment Opportunities Aerospace:Rotor and fixed wing aviation equipment and services, Helicopters and aircraft components, Aviation training services for African airlines, IDZ at Johannesburg International Airport, warehousing for aircraft parts. Rail:Rolling stock and services for the domestic market, estimated R7 billion Gautrain which includes infrastructure development and rolling stock, Rail infrastructure of the African continentthrough NEPAD and Rehabilitation of low density rail line. Marine:Development of boat yards and wet docks/floating docks, Joint ventures with local shipyards, manufacture of boats, yachts, catamarans and fleet racing boats, custom-made vessels (tugs) and training schools. Aerospace, Rail and Marine Aluminum smelter capacity, Capital equipment: machine tool manufacturing and petrochemical equipment, downstream processing and value-adding of iron, carbon steel, aluminum, platinum group metals and gold, ferro-alloys, gold and stainless steel. Mining and metal based industries
Clothing, Textiles, Leather and Footwear Sub-sector Sector 35. Investment Opportunities Source: DTI/TISA
Film
Capital Equipment Sub-sector Sector 36. Incentives Prospective IDZ operator companies must apply for permits to develop and operate an IDZExemption from VAT when sourcing goods and services from South African customs territory and duty-free imports of raw materials and inputs for export Industrial Development Zone Development must be a significant technological advance and have commercial advantage over existing product 50% of the direct cost incurred in development Support Programme for Industrial Innovation Investments of less than R100m; benefit decreases with size of investment Cash grant of up to 10% of qualifying assets Small and Medium Enterprise Development Programme ( Temporary suspended ) Main Conditions Benefit Incentive 37. Incentives The minimum qualifying infrastructure development cost is R15m Infrastructure projects intended to service IDZ, shall qualify for a grant of 30% of the qualifying infrastructure development cost Critical Infrastructure Fund Only new machinery, equipment acquired from abroad and required to establish a manufacturing project in SA will be consideredForeign entities may qualify up to a maximum of R3m Foreign Investment Grant( Temporary Suspended ) Main Conditions Benefit Incentive 38. the dtis Investment Services
39.
the dtis Contact Details 40. Thank You
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