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South Africa International Finance Country Report

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Brief Description of South Africa. The Boers: Dutch Settlers. The Boer War: (1899- 1902) ... There are huge expectations for the new South Africa. Major Exports ... – PowerPoint PPT presentation

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Title: South Africa International Finance Country Report


1
South Africa International Finance Country Report
  • Leann Bustamante
  • Miriam McDonough
  • Lindsay Surig

2
Brief Description of South Africa
  • Republic of South Africa
  • Size Less than 2x Texas
  • Capital Cape Town
  • Population 43, 647, 658 Growth rate- .02
  • Ethnic Groups black (75,2), white (13.6),
    colored (8.6), Indian (2.6).

3
Brief Description of South Africa
  • The Boers Dutch Settlers
  • The Boer War (1899- 1902)
  • 1990s- End of Apartheid

4
General Economic Importance
  • Middle income, developing country
  • Well-diversified economy
  • Natural Resources
  • Financial, Legal, Communication, Energy and
    Transport, Mining sectors
  • Stock Exchange ranked among 10 largest in the
    world

5
General Economic Importance
  • Economic Problems
  • Unemployment rate
  • Problems with respect to Apartheid Era
  • Crime and Corruption
  • HIV/AIDS

6
General Economic Importance
  • Imports/Exports

7
Recent Economic History
  • External Accounts
  • 1998- 1.6
  • 1999- virtual balance
  • 1998- Measures to reduce unemployment
  • 2000- Free Trade Agreement with EU
  • 2001- South African Development Community (SADC)
    trade protocol
  • 2000- President MBEKI vow to promote economic
    growth and foreign investment
  • 2001- Government slow down (result of
    international economy)

8
2001 GDP Figures
  • GDP - 412 billion
  • GDP growth rate 2.6
  • GDP composition by sector
  • agriculture 3
  • industry- 31
  • services-66
  • Inflation Rate- 5.8

9
Political Stability and Structure
  • Apartheid ? Democracy
  • Reformed structure 2002
  • Organization for African Unity ? African Union
  • AU focus
  • Changed from fight against poverty and human
    rights
  • To promote democracy, good governance, and
    economic growth

10
Assistance
  • AU and President Thabo Mbeki continue to seek
    assistance to implement their ideas
  • Future assistance will be focused on countries
    that demonstrate a political and financial
    commitment to good governance and the rule of
    law, investing in their people, and pursuing
    policies that spur economic growth and alleviate
    poverty implementation. We will not work with
    governments which disregard the dignity and
    interests of their people.

11
Stability
  • Increasing levels of stability
  • The political structure seems strong enough to
    hold the diverse region together.
  • There are huge expectations for the new South
    Africa.

12
Major Exports
  • 32.3 billion dollars in exports
  • Export commodities gold, diamonds, platinum,
    metals, minerals, machinery, and equiptment
  • Export partners EU with 33, United States with
    20, Japan with 6, and Mozambique with 2.5

13
Major Imports
  • 28.1 billion dollars in imports
  • Larger exporters than importers
  • Expected of a growth country
  • Imports include machinery, rice, equipment,
    chemicals, petroleum products, and scientific
    instruments
  • Major importing partnersEU with 41, United
    States with 11.4, Saudi Arabia with 7.3, and
    Japan with 7

14
Currency
  • Rand
  • Over 10 years had devalued by 2/3
  • 2001 fell 25 against the dollar, yen, and the
    pound
  • Favorite object for speculators
  • Underrated by 15 - 20

15
Exchange rates
  • Rand per US dollar from 1997-Jan2002
  • 11.58786 (January 2002), 8.60918 (2001), 6.93983
    (2000), 6.10948, (1999), 5.52828 (1998), 4.60796
    (1997).

16
Trade Relationship with the United States
  • South African shipments are entitled to
    specialized treatments under
  • Generalized System of Preferences
  • African Growth and Opportunity Act
  • United States shipment are entitled to Most
    Favored Nation Status

17
Trade Relationship with the United States
  • 1994 U.S.-South Africa Binational Commission
  • 2002 U.S.-South African Cooperative Forum
  • Between 1996 and 1999, foreign investment has
    increased significantly

18
Other Major Trading Partners
  • South African Customs Union
  • Botswana, Lesotho, Namibia, and Swaziland
  • Free Trade Agreement
  • European Union
  • South African Development Community Free Trade
    Agreement
  • Fourteen countries in the region

19
South African Trade by Country (Rand 000)
20
Investment Potential
  • Positives
  • Offers a market with a steadily growing economy
  • Provides easy access to the other markets in
    Africa
  • Labor costs that are low
  • Well developed financial institutions and capital
    market
  • Strong macroeconomic policies

21
Investment Potential
  • Negatives
  • Unemployment and crime rates are high
  • Education and health care systems are extremely
    poor

22
Investment Potential
  • South African Government has conducted a number
    of investment promotion efforts
  • Attractive investment destination for capital
    goods, technology, foreign investment, and joint
    ventures

23
South Africa
  • Questions or Comments?
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