South Africa - International Franchise Association

Although unemployment remains high (official figure of about 25 percent), skilled labor can
be difficult to find in many, if not most, technical and professional segments due to
emigration and the state of the education system. In addition, HIV/AIDS affects
approximately one in ten South Africans and impacts labor availability, productivity and
medical costs.
In the 2011 index of perceived public-sector corruption, Transparency International
ranked South Africa 64 out of 182 countries. South Africa’s ranking was class-best
among the BRICS.
U.S. firms should be aware that crime against businesses and individuals is a concern. High
telecommunications and security expenses add to the cost of doing business in South Africa,
and while recently installed fiber optic cable systems have reduced telecom costs somewhat,
at least on a retail basis, broadband service is relatively limited in terms of the consumer
market. Power generation shortages could restrict opportunities for energy-intensive
industries, until additional power generation comes on-line between 2013 and 2016.
Market Opportunities Return to top
Opportunities for U.S. exporters and investors in South Africa reflect the growth of its
consumer base and its efforts to upgrade and develop its infrastructure to match and further
fuel economic growth
Factors benefiting U.S. exporters include:
• A sophisticated banking sector;
• The strong performance of the rand versus the U.S. dollar;
• Infrastructure improvements;
• South Africa’s position as a gateway to other countries in Southern Africa;
• U.S-branded goods are known for their quality;
• South African Government-owned utilities such as Eskom (electric power) and
Transnet (transportation) have formalized capital expenditure plans amounting to
more than $70 billion over the next seven years.
In general, the best prospects for exports are in capital goods, though opportunities exist in a
wide range of consumer products and services as well.
Of particular note are:
• Electrical Power Systems;
• Telecommunication Services;
• Aviation;
• Automotive Components;
• Transportation, Infrastructure and Civil Construction;
• Franchising;
• Renewable Energy;
• Safety/Security Equipment;
• Pollution Control Equipment;
• Mining Equipment;
• Medical Equipment and Healthcare Services;