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This publication is available at https://www.gov.uk/government/publications/overseas-business-risk-south-africa/overseas-business-risk-south-africa
1. Political Overview
South Africa is a young, relatively stable democracy, dominated by one political party. Cyril Ramaphosa recently replaced Jacob Zuma as president in February 2018 following his election as President of the ANC. The ANC’s 2014 National Election victory at the polls secured 65.9% of the popular vote for the party. This victory came with the support of the tripartite alliance which consists of the South African Communist Party (SACP), the Congress of South African Trade Unions (COSATU) and the ANC. National Elections will take place next year (2019).
2. Economic Overview
The South African economy is forecast to have grown at around 1% in 2017, an upward revision from the 0.7% previously forecasted. This is expected to improve further in 2018 and 2019. South Africa is the most sophisticated and developed economy in Africa and has some high class companies in finance, real estate and business services, manufacturing and wholesale and retail trade. South Africa is the ‘gateway to Africa’ for investors due to its comparative sophistication, ease of doing business (compared to African counterparts), continental expertise and ability to act as a base for critical services for doing business on the rest of the continent.
3. Key Economic Developments
Unemployment remains an immense challenge with an official figure of 26.7%, and wider definitions of unemployment taking it above 35%. Two thirds of all those unemployed are below the age of 35. South Africa is the world’s most unequal country. Poverty is deep, structural and worsening. 40% of the population live on less than $1.75 a day. The National Treasury’s forecast growth rate falls far short of the 6% rate analysts believe the country needs to tackle its pervasive social problems.
4. Business Environment
South Africa’s business environment is challenging, but still one of the best in Africa. Problems include the skills deficit, poor labour relations, lack of electricity and corruption. But a well developed transport infrastructure and robust financial and legal frameworks exist. South Africa’s overall performance in the World Bank’s Ease of Doing Business Index dropped from 39th in 2013 to 82nd in 2017, at a time of subdued GDP outlook. The main contributor to this score is the country’s poor and limited access to electricity. There are still challenges for South Africa in attracting further investors, but these are not insurmountable, and sentiment is improving under President Ramaphosa.
Please see the World Bank’s Ease of Doing Business report for South Africa.
5. Human Rights
Human rights in South Africa are protected under its 1996 constitution, which has been hailed as one of the most progressive in the world. It guarantees economic, social and cultural rights. The country has a strong commitment to human rights and has statutory oversight bodies such as the South African Human Rights Commission which protects the rights guaranteed under the Constitution.
South Africa is signatory to various international human rights instruments including the Universal Declaration of Human Rights; African Charter on Human and Peoples’ Rights; the International Covenant on Economic, Social and Cultural Rights; and the UN declaration on sexual orientation and gender identity.
Despite South Africa’s strong constitutional protections for human rights and its relative success at providing basic services, the government continues to struggle to meet demands for economic and social rights. Issues such as unemployment, corruption, and threats to freedom of expression remain a concern for many citizens. Excessive force by police is a persistent problem as well as concerns about the treatment of migrants, refugees, and asylum seekers, and resultant xenophobia violence. South Africa continues to play an important but inconsistent role in advancing the rights of lesbian, gay, bisexual and transgender people
6. Bribery and Corruption
Corruption in South Africa includes the private use of public resources, bribery and improper favouritism. It often takes the form of individuals who enrich themselves through corrupting the awarding of government tender contracts, mostly based on personal connections and corrupt relationships.
Please see our anti-corruption strategy.
Bribery is illegal. It is an offence for British nationals or someone who is ordinarily resident in the UK, a body incorporated in the UK or a Scottish partnership, to bribe anywhere in the world. South Africa is a signatory to the OECD Anti-Bribery Convention. It should be noted that UK bribery legislation also applies to UK registered companies and UK nationals committing acts of bribery wholly outside the UK.
Please see the information provided on our Bribery page
Terrorists are likely to try to carry out attacks and there is a very high level of crime in South Africa. Please consult FCO travel advice for up-to-date information
The Centre for the Protection of National Infrastructure provides protective security advice to businesses.
8. Intellectual Property
Intellectual Property (IP) rights are territorial, they only give protection in the countries where they are granted or registered. If you are thinking about trading internationally, you should consider registering your IP rights in your export markets. South Africa is a signatory to various international IP treaties, the notable of which are the World Trade Organisation (WTO) Agreement on Trade- Related Aspects of Intellectual Property Rights (TRIPS Agreement), Berne Convention for the Protection of Literary and Artistic Works, Paris Convention for the Protection of Industrial Property, World Intellectual Property Organisation (WIPO) Treaty and the Patent Cooperation Treaty.
In general, South Africa provides adequate protection of IP rights. However, infringement is common, particularly of trademarks and copyright. Often, the State does not have sufficient enforcement capacity. In view of the fact that IP rights are private rights, the IP rights owner or holder bears the onus and costs of enforcing such rights. Currently, there are certain reforms being undertaken which include the controversial Copyright Amendment Bill and draft IP policy.
Further information can be viewed at the South African Companies and Intellectual Property Commission
Contact the DIT team in South Africa for more information.