Introduction

South Africa is a country of 44 million people that is rich in diverse cultures, people and natural heritage.  Enjoying remarkable macroeconomic stability and a pro-business environment, South Africa is a logical and attractive choice for U.S. companies to enter the African continent.  It is the most advanced, broad-based and productive economy in Africa, with a 2006 gross domestic product (GDP) of $587.5 billion and a real growth rate of approximately 5 percent. 

Some quick facts regarding South Africa’s economy and its foreign trade:

• The United States is the third largest source of South African imports (9.4%), after Germany (17.1%) and China (10.2%), and it is followed by Japan (8.5%) Saudi Arabia (6.6%) United Kingdom (6.6%) and France (5.2%) 

• U.S. exports rose 14 % in 2006.  In the first ten months of 2007, U.S. exports climbed another 25 % compared to the same period in 2006.   

• The United States is the largest portfolio investor in South Africa and the second largest source of foreign direct investment (FDI) in South Africa, after the U.K. (Total U.S. FDI is $5 billion with total FDI in South Africa at the end of 2005 amounting to $ 76.9 billion.

• The mature nature of the South African economy is reflected in the mix of economic sectors: agriculture (incl. fishing and mining): 9%, manufacturing industry: 24%; and the services sector: 66%.

• The national retail consumption patterns reflect the disparate nature of the economic status of its citizens, ranging from basic needs (e.g., condensed milk) to high-end durable consumer goods (e.g., SUV’s).

Market Opportunities     

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 its economic growth.

Factors benefiting U.S. exporters include:

• A stable currency that has recovered since the crash in 2001; 
• U.S. branded goods continue to gain market share;
• South African Government-owned utilities such as Eskom (electric power) and Transnet (transportation) have formalized capital expenditure plans for over $50 billion over the next five years; and
• The awarding to South Africa of the 2010 FIFA World Cup Soccer championship has resulted in over $2 billion in improvements and investment in sporting facilities and other infrastructure.