Economic Overview

Gateway to the region

Gateway to the entire Southern African region, South Africa is a major industrial power positioned at the southern tip of the subcontinent, physically larger than the combined countries of Germany, France, Italy, Belgium and Holland. This is a country that is well known for its abundance of sunshine and friendly people and as an ideal host nation.

The Constitution of South Africa comprises national, provincial and local spheres of government that are both interdependent and interrelated. In terms of this constitution, the country is divided into nine self-governing provinces, each with its own legislature, premier and members of the executive council. Each province features its own distinctive landscape, vegetation and climate, with variances therein.

Banking and financial aspects

South Africa's highly competitive banking and finance industry is as technologically sophisticated as any in the world, with the high-tech first-world service sector able to accommodate the most demanding needs of business, shipping agencies and foreign investors. The country's bankers, financial advisers, lawyers, tax consultants and experienced chartered accountants are able to advise foreign banks on legal issues and guide them through regulatory requirements with ongoing auditing services.

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 JSE Securities Exchange, the SA Futures Exchange, and the Bond Exchange of South Africa. Once approval is obtained for foreign loans, commercial banks monitor and report on receipt and usage of the loan funds. The well-established Johannesburg Stock Exchange (JSE) is ranked among the ten largest in the world, providing opportunities for private investment in large South African companies, with volumes and foreign purchases having increased dramatically. It also offers the opportunity to smaller, newer companies to seek investors through the Development Capital Market as well as a Traded Options Market for dealings in financial futures.

The financial market sees several established banking institutions, with four major groups controlling the bulk of the total banking assets. Flexible working relationships exist between local and foreign banks in this private enterprise system, and associations and alliances have continued to grow, with an increasing number of foreign banks in operation through fully active representative offices. Ideally located to service both European and southern African clients comprehensively, financial institutions are able to offer a full range of banking activities, including trade finance, foreign exchange trading, offshore banking and trust management. Commercial banks provide assistance to exporters in securing payments, while certain major financial institutions have international trade divisions offering more specialised services. The specific aim of small business units lies in assisting entrepreneurs, with innovative development initiatives offered.