As one of the largest economies in Africa, South Africa is a major power and world leader in the production and export of minerals, exhibiting
convincing manufacturing strengths.
Sound economic and social policies have ensured the international re-integration of the economy and the creation of an environment conducive to sustained export growth and healthy net capital inflows. South Africa is numbered in the top seven best-performing economies in the world and is ranked third in terms of industrial production growth.
Since the dawn of democracy, South Africa’s Gross Domestic Product has grown at almost 3% per annum. In spite of the prevailing unpredictable global economy and operating environment, together with South Africa’s categorisation as an emerging economy, the local economy bounced back to 2,8% in 2010 after plunging to -1,7% in 2009. The recession marked the first drop after 56 quarters of continuous expansion - the longest period of expansionary growth in the history of South Africa.
Key reasons behind this above-average performance included the increasing competitiveness of South African industry and an improvement in the domestic demand for goods and services. Export diversification was also a major factor which contributed to progress, with manufacturing - a dominant and robust sector in this diversified economy - retaining its strength. Other strong sectors include finance and business services, mining, commerce and agriculture, while the tourism industry and attendant conferencing capabilities play an increasingly important role in the development of entrepreneurial activities. Additionally there exists a superior well-developed transportation and communications infrastructure.
Foreign direct investment has multiplied by 21 fold, compared with the previous five years.
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 also monitor and report on receipt and usage of loan funds. The well-established Johannesburg Stock Exchange (JSE) is ranked among the 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 opportunities 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 aim of small business units lies in assisting entrepreneurs, with innovative development initiatives offered.