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SOUTH AFRICAInspiring New Ways

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MAP OF THE PROVINCES

9 Provinces:

• Capitals:• PTA – Administrative• Cape Town – Legislative• Bloemfontein - Judicial

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WHY SOUTH AFRICA?

• Economic powerhouse of Africa

• Covers just 3% of the African continent and contributes 25% of its GDP

• GDP growth rate: 2.1% + large scale infrastructure investment to create growth and jobs

• Gateway to other sub-Saharan African markets

• 45th most competitive country / ease of Doing Business: ranked 35 out of 183 countries

• English is main business language and similar systems and business cultures

• Suitable time difference

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THE TRADING RELATIONSHIP – OUR GREATEST SYNERGY

• Over £9.6 billion annually in bilateral trade

• UK in Top 5 trading partners

• Local partnerships and Black Economic Empowerment

• 4 out of 5 South African companies in Europe are

based in the UK

• There are opportunities in various sectors for

British business such as:

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Advanced Engineering Food & Drink

Agribusiness ICT

Creative Industries Life Sciences

Infrastructure & Energy Ports

Education & Skills Retail

Professional Services

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SWOT ANALYSIS

Strengths

•Abundant supply of natural resources

•Well-established & modern infrastructure

•Well developed financial and legal services

•Strong Legal and Financial frameworks

•Accountability of private institutions

•Stock exchange amongst the Global Top 10

•Govt spending on Education in 2012/13 was £16 bn

which is 19% of total govt expenditure.

•Fast growing black middle class

Weaknesses

• High unemployment

• Economic Integration/Poverty

• Skills shortage

• Infrastructure bottlenecks in energy, transport & water due to lack of govt capacity

• HIV Aids

• Crime

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POLITICAL & ECONOMIC CONSIDERATIONS

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Political

•Broad-Based Black Economic Empowerment

•Young, relatively stable, multi-party democracy, dominated by one political party

•2012 is an important year for SA politics

Economic

•Recovered from recession

•Prudent macroeconomic policies, targeting infrastructure-led growth

•Job creation

•Strong business environment attracts investors – according to World Bank survey easiest BRICS country to do business in

•Economy is diversified with strong services sector

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FOCUS ON EDUCATION

• South Africa underwent a major transformation in education following the end of Apartheid in 1994.

• Huge inequalities still exist.

• Lack of quality teachers, poorly functioning schools, backlog in infrastructure, absenteeism and strong unionisation mean the state system is failing large parts of the population.

• Two education ministries, Department of Basic Education (DBE) & Department of Higher Education and Training (DHET).

• January 2012 the Government launched its Green Paper on Post- School Education and Training outlining a broad policy for expanding and improving access, strengthening institutions, improving infrastructure, raising the quality of teaching and building coherence between basic education, further education and the labour market.

• 50 State Further Education Colleges.

• Numerous private and industry institutions.

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HOW TO ACCESS THE MARKET

• Skills shortage make the opportunities look obvious. But the space is very crowded.

• South African solutions, anti colonial sentiments, bolstering own economy, expensive imports.

• Local relationships are critical.

• Broad Based Black Economic Empowerment (BBBEE) , Preferential Procurement Framework, Preferred Suppliers at Provincial level.

• Government is criticised for changing the system too often.

• May choose to work with private institutions in the first instance

• Sector Education Training Authorities (SETAs)

• National Skills Fund

• Further Education Training institutes need management skills.

• Need to be clear about what you are offering

• No quick wins

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UKTI IS REPRESENTED IN 3 MAJOR CENTRES FOR BUSINESS

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Johannesburg (covering PTA), Cape Town and Durban

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HOW UKTI SOUTH AFRICA CAN ASSIST YOUR COMPANYOur Services

• Bespoke research, market entry advice & introduction to potential partners

• In-market programme arranging

• Event Management

• Targeted functions with key & relevant contacts

• Business networking events

• Product launches

For further information visit www.ukti.gov.uk/southafrica

• Ernst & Young Africa Attractiveness – www.ey.com 2012 Africa Attractiveness Report

• Grant Thornton Established a presence in SA - www.gt.co.za Type your title and date here 00/00/0000

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KEY EXAMPLES OF UK COMPANIES OPERATING IN SOUTH AFRICA

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HMG PROMOTING BRITISH CAPABILITIES AROUND THE WORLD