Infrastructure development is a critical anchor of South Africa’s strategy of progress. South Africa’s phenomenal expansion over the past number of years has resulted in roads, railways, airports and ports developing to reach new levels of efficiency.
Ports, Road and rail
South Africa lies on the world’s major shipping routes, and is a natural stop en route to countries such as Europe, Asia, Australia and Africa. South Africa has seven commercial ports, and the largest and best equipped harbour network in Africa.
The South African government is implementing a R8.2 billion investment program which will see major ports, rail and road improvements over the next few years. South African rail networks ranks 8th in the world in terms of freight carried. It is the 10th longest in the world and Transnet, the state corporation managing the rail, has significant development programs underway to ensure that the network remains the best maintained in Africa.
Construction is well underway to enlarge and upgrade many of South Africa’s airports. All of these upgrades will be completed well in advance of the 2010 deadline.
South Africa is a region of relative water scarcity, characterised by seasonal rain. The Northern section of the country experiences summer rain whereas the southern region experiences rains in the winter months. Seasons opposite to the Northern Hemisphere gives agricultural producers a huge potential to export to this region.
Until recently, ESKOM, South Africa’s electricity supply parastatel, boasted not only the world’s cheapest electricity but also sufficient surplus power to feed the rest of the sub-continent. Due to rapid growth however, South Africa is experiencing an energy crisis. To alleviate the situation Eskom plans to double its capacity from 40 000Mw to 80,000Mw over the next two decades. Nuclear power is to make up half of that increase. Electricity prices are expected to increase by approximately 30% per year for the next several years, but will still be globally competitive. Plans to generate electricity through alternative sources are also underway.
Banking and Financial Services
South Africa has a highly competitive banking and finance industry. They are as technologically sophisticated as any in the world and are able to service even the most demanding needs of business and foreign investors. The country’s bankers, lawyers, tax consultants, financial advisors and chartered accountants are able to advise foreign banks on legal issues and assist them with all regulatory steps within the investment process. The South African Reserve Bank oversees the banking services industry, while the Financial Services Board governs the non-banking financial services industry.
South Africa’s principle financial service markets comprise the Johannesburg Stock Exchange (JSE). The Securities Exchange and the Bond Exchange of South Africa. Once approval is obtained for loans, commercial banks also monitor and report on receipt and usage of loan funds. The JSE is ranked among the ten largest in the world, providing opportunities for investment into large South African companies.
There are several well established banking institutions in South Africa, with four major groups controlling the bulk of the total assets. Flexible working relationships exist between local and foreign banks. Financial institutions offer a range of banking activities, including trade finance, foreign exchange trading, offshore banking and trust management.