The Embassy of South Africa in Israel

Investment opportunities in South Africa

South Africa today is one of the most sophisticated and promising emerging markets globally. The unique combination of a highly developed first-world economic infrastructure and a huge emergent market economy presents attractive opportunities for investors.

The South African economy has been growing markedly over the past few years: In 2004 it grew 3.4 percent, and the minister of trade and industry predicts that it will grow by 4.3 percent in 2005. consumer confidence is up, real estate prices are rising, inflation has declined substantially and thousands of new jobs have been created. The South African Department of Trade and Industry (DTI) is working towards a transformed and adaptive economy that is characterized by a higher level of economic growth that generates employment and reduces levels of inequalities by the year 2014. The long-term, ten-year, goals of the DTI are to generate growth, employment and equity.

Market opportunity
There are many lucrative possibilities arising from South Africa’s wealth of natural resources and almost unlimited export and import opportunities. Since 1994, South Africa has emerged as a sophisticated and promising investment destination. The unique combination of a highly developed first worked economic infrastructure and a huge emergent market, has given rest to a strong entrepreneurial and dynamic investment environment, with many global competitive advantage and opportunities. In addition to its traditional sources of wealthy – mining and tourism – the South African government is now promoting call centers, Information Technology and

Wireless development.

The number of South Africans with mobile phones outnumbers those with landlines. This makes South Africa an emerging country with the highest penetration of wireless technologies in the world. The country is now taking the lead in pre-paid systems, creative innovation and cos-effective banking via cell phone.

Call centers
The South African call centre industry has doubled in the past two years, with major international firms outsourcing business to the country.
South Africa is an attractive location for call centers because it has a large population of native English speakers, is basically in Europe’s time zone (give or take an hour or two), has a developed telecommunications infrastructure, a favourable exchange rate and a large pool of potential employees. It’s no wonder, then, that in the province of Gauteng (capital: Johannesburg), which already controls 60 percent of the industry, fcall center operations are expected to grow by 40 percent in the next six months and to double within three years.

Niche software and niche application enhancement

Aside from their strong work ethic, South Africans are well known for lateral thinking and the development of ideas and concepts that are very much out of the box. The high cost of often non-ideal imported systems has encouraged the local marketplace to find innovative and cost-effective solutions. It should come as no surprise, then, that the local IT industry constantly develops new software that exceeds the expectations of the world market. The country’s advances in the field of security software and the banking sector serve as examples of this creative thinking. What may come as a surprise, however, is the relatively low cost at which these world-class products are developed and marketed.

Pilot laboratory
The diversity of the South African market makes it an ideal test laboratory for innovation. In a global market where it is no longer acceptable or profitable for high – volume new products to cater to a single culture or language, South Africa holds a unique advantage: its rich diversity of cultures and languages allows products to be thoroughly tried and tested for a global marketplace. As an added advantage, adaptable South Africans can be trusted to be receptive to new ideas and responsive in the monitoring process. Development cycles are practically halved and labor costs significantly reduced when, for example, software is developed in South African day, with overnight modifications and updates while America sleeps. The South African Department of Trade and Industry is taking an active role in the development of a broader, global South African economy. South Africa still faces many hurdles in closing the gap between its haves and have nots – between its developing economy and its developed economy – but given its recent growth and improved credit rating, it would seem that this country offers significant opportunities for foreign investors.