South Africa: the new reality
11 April 2011
South Africa's ascension to the BRICS grouping is recognition of the country's huge potential and rightly places it alongside the leading economies of tomorrow.
South Africa's economy is smaller than those of Brazil, Russia, India and China, but it is also the gateway to the African continent, allowing it to punch well above its weight by linking the BRIC economies to more than 1-billion consumers.
Africa is the fastest growth region after China and India; McKinsey & Company have identified a $2.6-billion revenue opportunity from the continent. Africa boasts unexploited mineral wealth, 60% of the world's uncultivated agricultural land and the youngest age profile of any continent.
South Africa's joining BRICS reflects the reality that the country is a first-tier, not a second-tier, emerging market, and means that BRICS can now truly lay claim to represent the emerging world. In fact, South Africa is 27th biggest economy in the world, with a gross domestic product that the International Monetary Fund puts at $354-billion.
South Africa's New Growth Path
South Africa is growing for the future. Building on the achievements of the last 15 years, the New Growth Path (NGP) sets out a bold vision for creating an even more competitive, fair and socially cohesive economy. The NGP puts employment at the centre of economic policy. It identifies how greater efficiencies can be achieved in the economy, and the investments needed to create a truly advanced, 21st-century infrastructure
The NGP will create large-scale, sustainable jobs in key sectors through a collaborative approach. This will spur trade, innovation and economic growth of up to 7% per year – ensuring South Africa remains at the forefront of fast-growing emerging economies and an attractive investment destination.
South Africa is open to increasing trade and investment among the BRICS. Moreover, it is a viable emerging market with huge potential as an innovative hub, a sound investment destination and a leading emerging market economy.
South Africa is keen to work with businesses, governments and stakeholders in the BRICS countries to create a partnership model resulting in mutually beneficial investment opportunities for all.
Investment gateway into Africa
The country's modern financial systems provide an ideal gateway for investments into the rest Africa. Eight out of the 10 largest companies in Africa are based in South Africa, and the World Investment Prospects Survey rated the country as a top-20 economy for foreign direct investment.
Moreover, South Africa's robust recovery from the global recession has led Fitch Ratings to raise its outlook for the country from "negative" to "stable".
Plenty of other factors make South Africa an ideal trade and investment destination. One is its mineral wealth: the country has the world’s largest deposits of gold, chromium, platinum and manganese.
The quality of South African institutions, its strong intellectual property protection, the accountability of its private institutions, and a stable and well-regulated financial sector all contribute to the ease of doing business in the country.
Johannesburg's JSE Securities Exchange is the 14th largest equities exchange in the world, with a total market capitalisation of some R2.3-trillion ($341-billion). In 2010, Wal-Mart made a $2.3-billion offer for 51% of South Africa's Massmart in the US retail giant's second-biggest investment in over a decade.
Key player in global institutions
South Africa is a key player in global institutions and is confidently playing an increasingly critical role in the fast-changing governance landscape.
The country is a member of the International Monetary Fund, the World Bank, the World Trade Organisation and the United Nations system, including the International Atomic Energy Agency.
South Africa plays a pivotal role in reshaping global governance and financial and trade architecture. This is reflected in its membership of the G20 group of advanced and emerging economies which, in line with the shifting balance of global economic power, has begun to supersede the old G7/8.
South Africa has a stable democracy, a transparent system of governance, supported by prudent fiscal policies and a strictly regulated financial sector. With strong relations with international organisations and growing economic influence, the country is seen as an emerging power and influential mediator.
SAinfo reporter and MediaClubSouthAfrica.com – get free high-resolution photos and professional feature articles from Brand South Africa's media service.