As the EU’s largest trading partner in Africa and a member of both the BRICS and CIVETS economic groups, South Africa is an attractive target for UK businesses looking to expand their international operation
Not only does UKTI identify South Africa as a key high-growth market, but they also describe it as “the ideal destination for the investor who has an eye on building a global empire.” And as the country celebrates a significant milestone in 2014, marking 20 years of democracy, there couldn’t be a better time to explore this market of opportunity.
A diverse country with a number of origins, cultures and languages, South Africa offers different business opportunities to a wide range of people. And ranked as the 18th most attractive destination for foreign investment, there are many advantages to doing business with South Africa. These include, but are not limited to, its abundance of natural resources, well developed banking system, good infrastructure (with plans to upgrade this further), reasonable tax structure, similar business culture to the UK and short time difference of one or two hours.
After a long, albeit slightly challenging history, bilateral trade currently stands at almost £10bn. This strong figure has been helped in part by a Trade, Development and Co-operation Agreement (TDCA), which was signed in 1999, and entered fully into force in 2004, to promote a close relationship between the EU and South Africa. Under the Agreement, the EU provides duty-free access for about 99% of South African industrial products and about 75% of its agricultural products.
British businesses are encouraged to take advantage of new developments in the country as UKTI focuses on high-value opportunities worth about £290 billion over the next 15 years, including a major programme to upgrade and expand the electricity infrastructure – projected spend of £28 billion over the next five years for a new generation of power stations (nuclear energy is also under consideration), and a Renewable Energy Programme valued at £21 billion to end 2025. What’s more, Cape Town has been designated as the World Design Capital for 2014 focusing strongly on socially responsive design and urban redevelopment.
South Africa’s position as the largest economy in sub-Saharan Africa and the only African member of the G20 have helped the country become a player in the global trading system, topping the African market for UK exports in 2012. However, as the British Trade Commissioner to South Africa warns: there’s no room for complacency as the competition for UK goods and services will get tougher as the world’s attention turns to Africa as a whole.