www.brics5.co.za
DIRCOza
@theDIRCOza
thedircoza
26 – 27 March 2013 The Fifth BRICS Summit, Durban, South Africa
FIFTH BRICS SUMMIT 26 – 27 MARCH 2013, DURBAN, SOUTH AFRICA
BRICS and Africa: Partnership for development, integration and industrialisation
South Africa South Africa is one of the sophisticated and the most promising emerging markets in the world. The unique combination of a well developed first world economic infrastructure and a rapidly emerging market economy has given rise to an entrepreneurial and dynamic investment environment with many global competitive advantages and opportunities. South Africa’s Department of Trade and Industry (the dti) is proactive in ensuring the viability of the country’s economic sectors and enterprises.
the dti Customer Contact Centre: 0861 843 384 International callers: +27 12 394 9500 Local fax: 0861 843 888 International Fax: +27 12 394 9501 Postal address: the dti, Private Bag X 84, Pretoria, 001 Website: www.thedti.gov.za
- Invest in a dynamic economy
CONTENTS
Contents 6
Welcome
8
Foreword
10
Publisher’s note
14
BRICS: Looking forward
16
Proposed science and technology platform for BRICS
17
BRICS – Championing a new paradigm for economic cooperation
18
PICC – an infrastructure plan destined to change the face of South Africa
22
About BRICS
SOURCES Department of Trade and Industry, Brand South Africa, StatsSA, Census 2011, South Africa The Good News, Department of International Relations and Cooperation, MediaClubSouthAfrica. SPECIAL THANKS Department of International Relations and Cooperation, Brand South Africa, Wonderland Collective, Kwintessential, Weblingo, Creative Expressions, Barry Hiles. DISCLAIMER Although the publisher has made every effort to ensure that
28
Benefits from partnership
34
BRICS – Laying down a future road map for intense cooperation
36
About South Africa
40
Fast facts on Brazil, Russia, India and China
43
South Africa: Economic overview
46
BRICS – Why South Africa’s citizens should care
48
2013/14 Budget summary
51
BRICS: Promoting investment potential
52
BRICS Development Bank to be the centrepiece of the summit
54
RENMINBI: New choice for global trade and investment
56
Looking to the East to accelerate economic growth
57
WNS acquires Fusion Outsourcing
58
DAFF offers opportunities for investment
64
SIZAGRAPH: A leader in renewable energy
66
DBSA on regional integration
+27 21 524 2274
72
2013 African airport of the year
+27 86 599 3074
74
The blue economy: BRICS maritime agenda
79
Investment in mining
80
DENEL – Defence and technology
84
SA film industry in the spotlight
88
Eastern Cape
90
Chinese automaker starts building in SA
91
SA – an attractive international tourism destination
94
Free State
96
Gauteng
99
Joburg, Africa’s business hub
100
KwaZulu-Natal
102
Limpopo
104
Mpumalanga
106
Northern Cape
112
Western Cape
114
North West
118
Invest in the North West Province
PAGE 04 / BRICS SUMMIT PUBLICATION
the information in this book is correct, the publisher does not assume and hereby disclaim any liability to any party for any loss, damage or disruption caused by errors or omissions.
TIME MEDIA PUBLISHING www.timemedia.co.za info@timemedia.co.za +27 21 388 5522
TIME MEDIA STAFF Dali Chiwara – CEO Mia Bass - Finance Controller Sam Slinger – Content Manager Mishqa Bassardien – Creative Intern JK Bassadien, Lead – Business Development Zaid Kriel – Sub Editing Catherine Van Dyk – Creative Direction WONDERLAND COLLECTIVE Lexi Fontein – Designer PRINT AND DISTRIBUTION Tandym Printers PHOTOGRAPHY Department of International Relations and Cooperation Brand South Africa Wonderland Collective MediaClubSouthAfrica Time Media
EXPLORE
DURBAN Durban is a vibrant and dynamic city of contrast with a potent and exciting mix of cultures. Whilst in the city, experience the beach promenade with its restaurants on the water’s edge, luxury hotels and modern shopping malls. Tour the city on the Ricksha Bus. Enjoy live music and fresh seafood at Wilson’s Wharf on the glistening harbour or dance the night away at Florida Road, the epicentre of Durban’s nightlife. After exploring uShaka Marine World and taking a journey on Moses Mabhida Stadium’s Sky Car, head to the Valley of 1000 Hills for a unique cultural experience and end off with a
LOGO GRAPHICS 031-564 3425
authentic Shisanyama Experience at a Township Restaurant. The experiences are endless and unforgettable...
DURBAN TOURISM - THE TOURISM AUTHORITY OF ETHEKWENI MUNICIPALITY TOURISM INFORMATION OFFICES: Durban Tourism (Florida Rd) - Tel: +27 31 322 4164 uShaka Office - Tel: +27 31 337 8099 Beach Information Office - Tel: +27 31 322 4205 Green Hub Office - Tel: +27 31 303 8476 Sapphire Coast Tourism (South) - Tel: +27 31 903 7498
Umhlanga Tourism (North) - Tel: +27 31 561 4257 Gateway Information Office - Tel: +27 31 514 0572 Airport Office - Tel: +27 31 322 6046 Inanda Tourism Office - Tel: +27 31 519 2555 1000 Hills Tourism (West) - Tel: +27 31 777 1874
like durbanthewarmestplacetobe
w w w . d u r b a n e x p e r i e n c e . c o . z a
WELCOME
President’s Welcome FIFTH BRICS SUMMIT, 26 TO 27 MARCH 2013 DURBAN, SOUTH AFRICA
BRICS AND AFRICA: PARTNERSHIP FOR DEVELOPMENT, INTEGRATION AND INDUSTRIALISATION
L
et me welcome you all to South Africa and to the city of
among emerging market economies. The BRICS member states reach
Durban in the beautiful KwaZulu-Natal. This province is known
across Asia, Europe, Latin America and Africa, ensuring that the
for its beauty, warm and friendly people, diverse and colourful
group links emerging powers and raises the voices of these countries
culture as well as stretch of golden beaches. It is known for its
as a whole in the world.
rich history of bravery and military conquest, displayed in the
early years of our history, under the reign of the legendary King Shaka,
Throughout our various interfaces with our BRICS partners, we have
after whom the airport you landed at, is named.
always made it clear that our membership of this formation is not only intended to advance our own economic development alone, but that
We are welcoming you to a province which was home to some of
of the entire African continent. This is why we have undertaken to
the greatest leaders, our country’s first Nobel Peace Prize Laureate,
craft a more dynamic trade and investment strategy that will ensure
Chief Albert Luthuli, and also at some point, the legendary Mahatma
sound development of Africa. This is all reflected in the theme of our
Gandhi. Both were distinguished fighters for freedom, justice and
summit – “BRICS and Africa: Partnership for development, integration
human rights for all.
and industrialisation”.
This is also the city and province in which the founding President of a
I am positive that this summit will be a success and will translate
free and democratic South Africa, our icon, President Nelson Mandela,
many of our areas of convergence and common interest into reality.
cast his vote for the first time on 27 April 1994, launching a new era
We look forward to outcomes that all member states can be proud
of freedom and democracy in our country. We are therefore truly
of. I also wish to extend a kind invitation to our current and potential
honoured to host you in this province and country, at the fifth Summit
investors to explore the various opportunities presented by BRICS and
of the BRICS countries.
utilise them meaningfully.
When we were invited to join this formation in December 2010, we
We trust that you will enjoy your stay in our beautiful country.
were inspired that our vision to strengthen South-South relations would become a reality. This is a vision we have set ourselves to
JACOB ZUMA
achieve through promoting development and enhancing cooperation
PRESIDENT OF THE REPUBLIC OF SOUTH AFRICA
PAGE 06 / BRICS SUMMIT PUBLICATION
FOREWORD
Foreword
BY MAITE NKOANA-MASHABANE
A
s the youngest member of the grouping of emerging economies
In the recently issued World Economic Forum’s Report on Global
of BRICS (Brazil, Russia, India, China and South Africa), we are
Competitiveness that benchmarks the performance of 144 nations, including
privileged to attract the attention of the world to South Africa and
South Africa, the country performed particularly well against the report’s
Africa in the hosting of the fifth BRICS Summit on our shores. Our
financial pillars. With regard to financial market development, South Africa
country has extensive experience in hosting big events, including
ranks first among the BRICS nations, and third overall in the world. Other key
the 2010 FIFA World CupTM, the recently concluded Africa Cup of Nations,
areas where South Africa performed well in comparison to its fellow BRICS
Rugby and Cricket World Cups, United Nations Climate Change Conference
nation members were the Legal Rights Index, the Regulation of Securities
(COP17) and the Global African Diaspora Conference. We hope that you find
Exchanges, the Efficacy of Corporate Boards and the Strength of Auditing and
time in your busy schedules to tour our beautiful country.
Reporting Standards, where South Africa was placed first against each pillar. Again, these are critical areas that can encourage inward investment.
When South Africa accepted the invitation to join the group of emerging economies, critics again had much to say on why South Africa was not a
Our interaction with fellow BRICS states is premised on three levels of
suitable brick within BRICS. Many of these voices have now been silenced as
engagement: firstly, national, where we advance our national interests; secondly,
the facts speak for themselves.
regional, where we promote regional integration and interaction with specific emphasis on the African Union mandate given to President Jacob Zuma to
Our membership of this body has indeed expanded BRICS’ geographic and
promote infrastructure development across the continent; and, thirdly, on a
inter-continental reach, including its global representivity and inclusiveness.
global level, where we advocate for a more inclusive global governance system.
South Africa itself has a population of 50 million and an economy worth approximately US$ 527 billion. Our per capita income level at purchasing power
We want to ensure that our membership of BRICS benefits the entire continent
parity compares favourably with BRICS partners estimated at US$ 11 000 (after
and this summit constitutes another high-level opportunity to further support
the Russian Federation at $16 700 and Brazil at $11 845).
key priority areas of the African Agenda. Africa is emerging as one of the fastestgrowing markets with the potential of future growth due to the demographic
South Africa’s comparative advantage within BRICS pertains to South
basis underpinning this growth and the new consumer market that is emerging.
Africa’s considerable non-energy in situ mineral wealth. In a recent report
The BRICS countries now constitute the largest trading partners of Africa and
commissioned by the US-based Citigroup bank, South Africa was ranked as
the largest new (not total) investors. The BRICS investment portfolio in Africa is
the world’s richest country in terms of its mineral reserves, worth an estimated
very encouraging and promising. Over the past decade, we have seen a seismic
US$2,5 trillion. South Africa is the world’s largest producer of platinum,
acceleration of commercial and strategic engagements between the BRICS and
chrome, vanadium and manganese, and the third-largest gold miner, as well as
Africa. BRICS has nourished Africa’s economic emergence and elevated the
offers highly sophisticated mining-related professional services, contributing
continent’s contemporary global relevance.
significantly to the BRICS resource pool. The theme for the summit is “BRICS and Africa: Partnership for development, South Africa is investing R300 billion ($35,6 billion) into expanding and
integration and industrialisation”. We are determined to ensure the summit
improving its railways, ports and fuel pipelines, as a catalyst to help unlock
outcomes live up to this theme and produce an implementable programme of
the world’s greatest mineral wealth. Africa will also continue to be buoyed by
action. Working together we can create a better South Africa, a better Africa
the exploding global demand for oil, metals, minerals, food and other natural
and a better world.
resources. Likewise, the African continent, which is arguably one of the world’s largest unexplored resource basins, has an abundance of riches, including 10% of the world’s oil reserves, 40% of its gold ore and 95% of platinum. The demand from BRICS countries for these commodities has been a critical source to support growth on the continent. PAGE 08 / BRICS SUMMIT PUBLICATION
MAITE NKOANA-MASHABANE MINISTER OF INTERNATIONAL RELATIONS AND COOPERATION REPUBLIC OF SOUTH AFRICA
africa – the cornerstone of south africa’s foreign policy Our struggle for a better life in south africa is intertwined with our pursuit of a
better africa in a better world. Regional and
continental integration is the foundation for africa’s
socio-economic development and political unity. the strengthening of the african Union (aU) and its structures is a strategic priority in deepening
continental integration process and infrastructure development, the
paving the way for improved intra-africa trade. In the past few years, the Department of International Relations and Cooperation has been at the helm of a number of south africa’s
milestones, including the successful COP17/CMP7, our election to the UNsC for a second term and our recent inclusion into BRICs. at the top of our agenda is the need to ensure that
international
our continent remains a zone of peace, stability and economic development, translating into the creation of a better and a better
south africa, a better africa
world.
international relations & cooperation Department: International Relations and Cooperation REPUBLIC OF SOUTH AFRICA
PUBLISHER’S NOTE
Publisher’s Note IT IS WITH GREAT PRIDE THAT TIME MEDIA, IN COLLABORATION WITH THE DEPARTMENT OF INTERNATIONAL RELATIONS AND COOPERATION, PRESENTS
THE OFFICIAL FIFTH BRICS SUMMIT PUBLICATION
T
his publication endeavours to market South Africa’s economy
Time Media thanks the Department of International Relations and
to the world and is a noteworthy addition to the programme
Cooperation, all its contributors, staff and associates in producing this
promoting foreign direct investment into the country –
publication. We trust that the success stories in it inspire you to accelerate
particularly into those sectors identified by the South African
investment into South Africa.
Government as priority sectors for growth and development.
Opportunities such as the trade exhibition, associated with the BRICS Summit and hosted by the Department of Trade and Industry, providing one-on-one interaction, is a vital catalyst for economic activity in the current global economic climate. Potential investors who participate in such events are more likely to invest their money in concrete projects that they are acquainted with, versus those they have only contemplated
DALI CHIWARA
abstractly from afar.
CEO – TIME MEDIA
Through the successful hosting of the 2010 FIFA World CupTM, COP17 Summit and the 2013 Africa Cup of Nations – won by Nigeria – it is clear that South Africa is a vibrant destination that is illuminated as a premier trade, investment, business and tourism hub.
PAGE 10 / BRICS SUMMIT PUBLICATION
A 26-country, US$1-trillion tripartite free trade area of East, Southern and Central Africa – expanding the African market to 600 million people “BRICS and Africa: Partnership for development, integration and industrialisation”
THE FIFTH BRICS SUMMIT. 26 – 27 MARCH 2013. DURBAN, SOUTH AFRICA. www.brics5.co.za
REPUBLIC OF SOUTH AFRICA
EDITORIAL CONTRIBUTION
BRICS: Looking forward BY PRAVIN GORDHAN MINISTER OF FINANCE, SOUTH AFRICA AS SOUTH AFRICA HOSTS THE FIFTH BRICS SUMMIT, THE WORDS OF KWAME NKRUMAH ARE PERTINENT:
“WE FACE NEITHER EAST NOR WEST, WE FACE FORWARD.” that is underway and the increasingly common agenda that is unfolding among developing countries as well as those developed countries that empathise with the developing world. It is against this backdrop of the shifting economic power that South Africa’s key objectives in BRICS must be understood. As a progressive initiative of leading emerging economies, the BRICS countries are working together to foster deeper economic and political cooperation among themselves as well as with other emerging markets and developing countries. South Africa’s participation in the BRICS is thus premised on four objectives: • firstly, to deepen economic and financial cooperation with Brazil, Russia, India and China as part of the BRICS forum to address South Africa’s domestic economic plans • Secondly, to strengthen relations with BRICS and ensure Africa
M
remains an important part of global production value chains and prevent marginalisation of the continent through the promotion of ore recently, Nkrumah’s sentiments were echoed most recently by President Jacob Zuma during the 2013 State of the Nation Address, during which he reiterated that South Africa placed great importance on relations
regional integration • thirdly, to support and contribute to shaping the reforms of multilateral fora • finally, to establish a knowledge exchange and sharing platform.
with countries of the North and of the South.
We are living in challenging times as the advanced economies
Issues on the BRICS finance agenda for the 2013 summit are illustrative of all four considerations.
continue to show muted growth. Despite this, emerging markets continue to lead global growth. This trend requires us to evaluate
FINANCE ISSUES AT THE 2013 SUMMIT
our partnerships and identify new opportunities. But, forging new partnerships is not about replacing existing ones. It is not about
The BRICS Interbank Cooperation Mechanism agreements that will be
exchanging existing partnerships with the North for those with the
signed by BRICS development finance institutions will address the first
South. Nor is it about replacing actors from the West with those from
objective of deepening economic and financial cooperation. Through these
the East. Instead, it is recognition of the economic transformation
agreements, BRICS countries will seek innovative ways in which finance
PAGE 14 / BRICS SUMMIT PUBLICATION
EDITORIAL CONTRIBUTION
“We face neither East nor West, we face forward”
can facilitate greater trade and investment among the BRICS economies.
CALLING ON THE PRIVATE SECTOR
Similarly, the discussion on the new Development Bank and the Contingent Reserve Arrangement, which aims to forestall short-
In recognition of the key role that the private sector plays in
term liquidity pressures in BRICS countries, will speak to the BRICS’
economic growth and development, we look forward to the
determination to pool our resources towards more measurable
establishment of the BRICS Business Council. As much as the BRICS
mutual development. The proposed Development Bank will finance
governments may work together to increase cooperation between
infrastructure in BRICS and other emerging markets and developing
our countries, it is private enterprises that will drive growth. Through
countries. Infrastructure is one of the major hurdles, for example, to
this initiative, the public sector can make informed decisions by
greater economic linkages among African nations.
engaging actively with the private sector.
The second objective of the role of BRICS in partnering with Africa
Government’s approach to BRICS has been collaborative, driven
recalls the commitment made by BRICS leaders at the Sanya
by the understanding that South Africa’s financial sector is one of
Summit in 2011 to support Africa’s infrastructure development and
the most stable and well-managed globally. We have sought closer
industrialisation. The conversation that will take place between BRICS
collaboration with our stakeholders in the finance family such as
and African leaders will lend impetus to this objective.
the Banking Association of South Africa and the Association for Savings and Investment SA, as well as various development finance
The third objective of reshaping the reforms of multilateral fora
institutions. We continue to encourage ideas and initiatives from
will be addressed during discussions on the ongoing reforms of the
the private sector to ensure that in our engagement with BRICS, we
International Monetary Fund (IMF), including the question of a third
consolidate our position as the financial centre of Africa.
chair for Sub-Saharan Africa on the Executive Board of the IMF. Finally, the launch of the BRICS Think-Tank will, among other things,
The sum of our combined efforts as government, business and civil
play a critical role in facilitating a vibrant exchange of knowledge
society will indeed ensure that South Africa’s membership of BRICS
on how best to address commonly shared concerns about poverty,
effectively demonstrates how international partnership can take our
unemployment and inequality towards a better life for our people.
domestic and continental development agenda forward.
BRICS SUMMIT PUBLICATION / PAGE 15
EDITORIAL CONTRIBUTION
Proposed science and technology platform for BRICS MESSAGE BY SOUTH AFRICA’S MINISTER OF SCIENCE AND TECHNOLOGY, DEREK HANEKOM
South Africa believes that Brazil, Russia, India, China and South Africa’s (BRICS) science and technology platform will be an important cornerstone of the BRICS partnership. The platform will be based on openness and mutual benefit, and promote a whole spectrum of activities, including: • policy dialogues • information sharing, training and personnel exchanges • facilitating access to large-scale research facilities, and • technology transfer. South Africa is fully committed to ensuring the sustainability and success of the BRICS partnership.
PAGE 16 / BRICS SUMMIT PUBLICATION
EDITORIAL CONTRIBUTION
BRICS – Championing a new
paradigm for economic cooperation BY DR ROB DAVIES MINISTER OF TRADE AND INDUSTRY, SOUTH AFRICA
S
outh Africa is hosting the fifth Brazil, Russia, India, China and South
Thirdly, there is a historic opportunity for the BRICS countries to champion a
Africa (BRICS) Summit and the first meeting of BRICS leaders
new paradigm for collaboration for more sustainable, equitable and mutually
on African soil in Durban on 27 March 2013. This historic event,
beneficial development. This should involve closer cooperation among the
convened under the theme “BRICS and Africa – Partnership for
BRICS countries to support our growth, development and poverty objectives,
development, integration and industrialisation”, was preceded by a
building on our respective economic strengths and avoiding destructive
meeting of the BRICS ministers of trade and economic development on
competition. This may be achieved by identifying complementarities in key
26 March 2013.
growth sectors and through a value-chain approach, to cooperate to build the industrial capacities of our respective economies.
South Africa’s membership of the BRICS forum has become a vital element of our global economic strategy, and as the BRICS Chair, South Africa will play a
Finally, the BRICS forum offers a unique opportunity for BRICS countries to
key role in shaping the agenda for economic cooperation.
extend and advance their cooperation in ways that meaningfully promote the economic development agenda of other developing countries and regions.
There are four strategic considerations that anchor our participation in the BRICS forum. Firstly, in the current global economic environment, South
The BRICS countries are already deeply involved in Africa’s economic
Africa seeks to use the BRICS forum to build stronger economic linkages with
transformation process and their presence is growing significantly. This is
the world’s fastest-growing and most dynamic economies. The International
reflected in rapidly growing trade and investment flows as well as economic
Monetary Fund’s latest forecast for 2013 indicates that emerging market and
cooperation activities across a range of sectors. We would want to advance
developing economies will grow by 5,5% this year, compared to growth of
an agenda in the BRICS forum that will see BRICS countries enhance their
1,2% in advanced economies.
cooperation and collaboration to provide more decisive impetus to Africa’s own strategies for inclusive and sustainable development.
While South Africa’s economic links with established trading partners remain important, our prospects for growth and development will depend increasingly
Two years ago at the Sanya Summit, BRICS leaders established the Contact
on diversifying and strengthening our economic links with these dynamic
Group on Economic and Trade Issues to develop and advance joint work
economies of the South and with Africa. The expansion of South Africa’s
programmes on a range of trade, investment and economic matters. The
trade and direct investment with the countries of the South, notably the BRIC
contact group is working to strengthen BRICS coordination in the multilateral
countries, continues and it is striking that the share of the BRIC countries in
arena, notably in the World Trade Organisation, and to advance cooperation
South Africa’s total trade almost doubled from 10% in 2005 to 18,6% in 2011.
on key aspects of intra-BRICS trade issues, small and medium enterprise development, and investment policy and promotion.
Secondly, the BRICS forum provides a platform to address some of the challenges arising from the rapid growth in intra-BRICS trade. A core concern
South Africa will also articulate and promote the African economic development
for South Africa is the structure of trade, whereby our exports to China, India
agenda as agreed by African governments, particularly in respect of support
and Brazil continue to be dominated by low value-added products in exchange
to continental integration, infrastructure development and industrialisation.
for manufactures. One of the priorities for our term as BRICS Chair is to
BRICS partners have already committed to support Africa’s infrastructure
coordinate a joint study to explore ways to promote more value-added exports
development and industrialisation and the eventual establishment of a BRICS-
that will support our industrial development objectives.
led Development Bank would signify meaningful progress in this respect.
In Durban, we are convening the fourth BRICS Business Forum. The Business
Deepened cooperation between BRICS countries, the leading emerging
Forum, which has set the target of US$500 billion in intra-BRICS trade by 2015,
economies in the world, and Africa with its much improved development
plays a significant role in forging beneficial relationships between the business
prospects, abundant natural resources, growing consumer power and
communities of our countries. We will also launch the BRICS Business Council,
favourable demographics offer enormous potential for building Africa-BRICS
which will facilitate the increase of exports of value-added products, as well as
economic cooperation on a sustainable and mutually beneficial basis over the
encourage investments between the five countries.
next decades. This opportunity should be seized. BRICS SUMMIT PUBLICATION / PAGE 17
EDITORIAL CONTRIBUTION
PICC – an infrastructure plan destined to change the face of South Africa
The Department of Economic Development, Republic of South Africa
S
Individual projects are clustered, prioritised and sequenced into strategic integrated projects, the SIPs for short. Over 150 projects, overseen by the PICC, are at various stages of development, with some currently underway across the country, and in various parts of the continent, with many still in the pipeline over the next few years (more details on the SIPs below).
The Presidential Infrastructure Coordinating Commission (PICC), established in 2011 by the President of South Africa, Mr Jacob Zuma, has as its primary mandate the task of planning and coordinating the National Infrastructure Plan across all three spheres of government. The plan is centrally monitored and driven by the PICC.
We can already measure the impact of the infrastructure plan in terms of the level of public investment as a percentage of gross domestic product – which has in the past two years risen to just under 8%, from a level just below 7%.
outh Africa has embarked on its biggest infrastructure expansion programme to date, a plan that is critical to the country’s longterm development, and which will result in a profound shift and reindustrialisation of the economy.
PAGE 18 / Brics Summit publication
The proposed Infrastructure Development Bill aims to further assist government to fast-track key infrastructure projects. Infrastructure development has emerged as a priority not only for South Africa, but in the African Union’s programmes for the continent. It is recognised that infrastructure development will be central to the continent’s development. South Africa’s invitation into the Brazil, Russia, India, China and South Africa (BRICS) network ensures that we are able to advance our infrastructure and economic objectives not only for South Africa, but on the continent as a whole.
EDITORIAL CONTRIBUTION
Regional integration is one of the key objectives of accelerating infrastructure projects on the continent, and will reduce barriers to trade and development. Government has identified several projects, as part of SIP 17, which will be undertaken, or are currently under construction. These include the Lesotho Highlands Water Project Phase 2, the North-South Corridor (championed by President Zuma), as well as the Square Kilometre Array (SKA) project. In addition, there are projects implemented within South Africa, such as the SIP 2: Durban-Free State and Gauteng Logistics and Industrial Corridor that have strong linkages to the region. The improvement of cargo facilities, roads, rail and ports along this corridor will enable faster movement of goods between South Africa and her neighbours. Economic growth for sub-Saharan Africa averaged 5% a year in 2010 and 2011, and the expectation is that it will remain between 1% and 2% above the rest of the world for the foreseeable future. This growth bodes well for South Africa’s economic development – about a fifth of the country’s exports go to the rest of the continent. South African companies, including state-owned, have major investments in the continent. The establishment of a BRICS Development Bank, which will provided much-needed development finance, is key to funding the various projects that will unlock economic potential and foster regional economic development.
ABCs of SIPs There are 18 strategic integrated projects (SIPs) within which the projects are located. The SIPs must transform the economic landscape by unlocking opportunity, creating jobs, strengthening delivery of services and supporting the integration of economies on the continent. There are five geographically focussed SIPs, three spatial, three energy, three related to social infrastructure, two knowledge SIPs, one focussed on regional integration, and one on water and sanitation. SIP 1: Unlocking the northern mineral belt with the Waterberg as the catalyst
• shift from road to rail in Mpumalanga • logistics corridor to connect Mpumalanga and Gauteng. SIP 2: Durban-Free State-Gauteng Logistics and Industrial Corridor The aims of the SIP are to strengthen the logistics and transport corridor between South Africa’s main industrial hubs with the following elements: • improve access to Durban’s export and import facilities • integrate Free State Industrial Strategy activities into the corridor • new port in Durban • aerotropolis around OR Tambo International Airport.
The SIP seeks to unlock the mineral resources in the northern belt through the provision of much-needed infrastructure. The components of the SIP are:
SIP 3: South-Eastern node and corridor development
• rail, water pipelines, energy generation and transmission infrastructure • urban development in Waterberg – first major post-apartheid new urban centre will be a “green” development project • rail capacity to Mpumalanga and Richards Bay
The aim of the SIP is to support economic development in the Eastern Cape, connecting to opportunities and resources in Northern Cape and KwaZulu-Natal. This will spur re-industrialisation of one of the poorest regions in South Africa. The components of the SIP are:
• new dam at Mzimvubu with irrigation systems • N2-Wild Coast Highway which improves access into KwaZulu-Natal and national supply chains • strengthen economic development in Port Elizabeth through a manganese rail capacity from the Northern Cape • a manganese sinter (Northern Cape) and smelter (Eastern Cape) • possible Mthombo refinery (Coega) and transshipment hub at Ngqura and port and rail upgrades to improve industrial capacity and performance of the automotive sector. SIP 4: Unlocking the economic opportunities in North West The objective of the SIP is to accelerate investments in road, rail, bulk water, water treatment and transmission infrastructure to facilitate development of mining, agriculture and tourism. SIP 5: Saldanha-Northern Cape Development Corridor This corridor, with its main focus on expanding iron ore rail capacity, seeks to industrialise the Saldanha area while further supporting
Brics Summit publication / PAGE 19
EDITORIAL CONTRIBUTION
mining development in the Northern Cape. The elements of the SIPs are:
Significant work is underway on urban transport integration.
• integrated rail and port expansion • back-of-port industrial capacity (including an industrial development zone) • strengthening maritime support capacity for oil and gas along the African West Coast • expansion of iron ore mining production and beneficiation.
SIP 8: Green energy in support of the South African economy
SIP 6: Integrated Municipal Infrastructure Project This SIP seeks to develop national capacity to assist the 23 least resourced districts (19 million people) to address all the maintenance backlogs and upgrades required in water, electricity and sanitation bulk infrastructure. The road maintenance programme will enhance service delivery capacity, thereby impacting positively on the population. SIP 7: Integrated Urban Space and Public Transport Programme Coordinate planning and implementation of public transport, human settlement, economic and social infrastructure and location decisions into sustainable urban settlements connected by densified transport corridors. This will focus on the 12 largest urban centres of the country, including all the metros in South Africa.
PAGE 20 / Brics Summit publication
Support sustainable green energy initiatives on a national scale through a diverse range of clean energy options as envisaged in the Integrated Resource Plan (IRP2010) and support bio-fuel production facilities. This includes solar and wind energy, solar water heaters and biofuels.
SIP 9: Electricity generation to support socioeconomic development Accelerate the construction of new electricity generation capacity in accordance with the IRP2010 to meet the needs of the economy and address historical imbalances. Monitor implementation of major projects such as new power stations: Medupi, Kusile and Ingula. SIP 10: Electricity transmission and distribution for all Expand the transmission and distribution network to address historical imbalances, provide access to electricity for all and support economic development.
Align the 10-year transmission plan, the services backlog, the national broadband roll-out and the freight rail line development to leverage off regulatory approvals, supply chain and project development capacity. SIP 11: Agri-logistics and rural infrastructure Improve investment in agricultural and rural infrastructure that supports expansion of production and employment, small-scale farming and rural development, including facilities for storage (silos, fresh-produce facilities, packing houses); transport links to main networks (rural roads, branch train-line, ports); fencing of farms; irrigation schemes to poor areas; improved research and development in rural issues (including expansion of agricultural colleges); processing facilities (abattoirs, dairy infrastructure); aquaculture incubation schemes; and rural tourism infrastructure. SIP 12: Revitalisation of public hospitals and other health facilities Build and refurbish hospitals, other public health facilities and revamp 122 nursing colleges.There will be extensive capital expenditure to prepare the public healthcare system to meet the requirements of the National Health Insurance system. The SIP contains major builds for six hospitals.
EDITORIAL CONTRIBUTION
SIP 13: National School Build Programme A national school build programme driven by uniformity in planning, procurement, contract management and provision of basic services. Replace inappropriate school structures and address basic service backlog and provision of basic services under the Accelerated School Infrastructure Delivery Initiative. In addition, address national backlogs in classrooms, libraries, computer labs and administrative buildings. Improving the learning environment will strengthen outcomes especially in rural schools, as well as reduce overcrowding. SIP 14: Higher Education infrastructure Infrastructure development for Higher Education, focussing on lecture rooms, student accommodation, libraries and laboratories, as well as information and communications technology (ICT) connectivity. University towns will be developed, with a combination of facilities from residence, retail to recreation and transport. It will have the potential to ensure shared infrastructure such as libraries by universities, further education and training and other educational institutions. Two new universities will be built in Northern Cape and Mpumalanga.
SIP 15: Expanding access to communications technology Provide for broadband coverage to all households by 2020 by establishing core points of presence (POPs) in district municipalities, extend new Infraco fibre networks across provinces linking districts, establish POPs and fibre connectivity at local level and further penetrate the network into deep rural areas. SIP 16: SKA and Meerkat SKA is a global mega-science project, building an advanced radio-telescope facility linked to research infrastructure and high-speed ICT capacity and provides an opportunity for Africa and South Africa to contribute towards global advanced science projects. SIP 17: Regional integration for African cooperation and development Participate in mutually beneficial infrastructure projects to unlock long-term socio-economic benefits by partnering with fast-growing African economies with projected growth ranging between 3% and 10%.
The projects involving transport, water and energy also provide competitively-priced, diversified, short- and medium- to longterm options for the South African economy where, for example, electricity transmission in Mozambique (Cesul) could assist in providing cheap, clean power in the short-term while Grand Inga in the Democratic Republic of Congo is long-term. All these projects complement the Free Trade Area discussions to create a market of 600 million people in South, Central and East Africa. SIP 18: Water and sanitation infrastructure This is a 10-year plan to address the estimated backlog of adequate water to supply 1,4 million households and 2,1 million households with basic sanitation. The project will involve provision of sustainable supply of water to meet social needs and support economic growth. Projects will provide for new infrastructure, rehabilitation and upgrading of existing infrastructure, as well as improved management of water infrastructure.
Brics Summit publication / PAGE 21
EDITORIAL CONTRIBUTION
About BRICS B
RICS is an acronym for the powerful grouping of the world’s leading emerging market economies, namely Brazil, Russia, India, China and South Africa. It aims to achieve peace, security, development and cooperation. It also aims at contributing significantly to the development of humanity and establishing a more equitable and fair world order. The first BRIC Summit took place in Yekateringburg, Russia, where the elected leaders of the four countries formally declared the membership of the BRIC(S) economic grouping. South Africa was invited to join the the grouping in December 2010, resulting in BRICS. BRICS has since its inception had a positive approach to international issues in a cooperative spirit. The countries have individually emerged to become new locomotives for global growth. China has recently been ranked as the second-biggest economy in the world; India currently stands as the 10th-largest economy in gross domestic product (GDP) in nominal terms, and is the fourth-largest economy in terms of GDP at Purchasing Power Parity (PPP). In 2011, Brazil became the world’s sixth-largest economy and Russia is currently the ninth-biggest economy. South Africa is ranked as the 26th-largest economy. BRICS countries coordinate their positions and actions in international organisations, as seen in the United Nations (UN) and its various specialised agencies, etc. In the midst of the current global economic crisis, many countries in the world have weathered its effects due to economic cooperation with BRICS countries. Expansion of BRIC(S) into BRICS South Africa was endorsed with membership of this economic and political entity in December 2010 and on 14 April 2011, South African President Jacob Zuma attended the third BRICS Summit in Sanya, China. Being part of this grouping is in line with South Africa’s foreign policy objective of strengthening South-South relations. The present context of international relations and cooperation between Asian, African and Latin American countries – collectively known as countries of the South – remains critical, and has become more important than ever before.
PAGE 22 / Brics Summit publication
South Africa’s membership of BRICS is premised on its regional, continental and global role as well as its domestic achievements in the “proudly South African manner”. South Africa joined BRICS with three objectives in mind: • to advance its national interests as outlined in the President’s State of the Nation Address • to promote its regional integration programme and related continental infrastructure programmes • to partner with key players of the South on issues related to global governance and its reform. South Africa’s membership of this body has expanded BRICS’ geographic and intercontinental reach, including its global representivity and inclusiveness. Statistics • In 2011, the BRICS’ share of GDP based on PPP amounted to about 20 % (estimated US$13,7 trillion). • BRICS countries have increased their share of global GDP threefold in the past 15 years. • BRICS’ share of global output will increase from 18% (according to market exchange rates), to 25% to 26% over the next 10 years and even to onethird by 2030. • In PPP terms, it is about 30% of the world’s GDP at the moment. By 2020, it will be 37% to 38% and reaching 45% by about 2030. • BRICS countries occupy 30% of the global territory. • They are home to 45% of the world’s population. • The contribution to global economic growth over the last decade has reached 50%, which makes this group of states the leading power in global economic development. • BRICS accounted for approximately 11% of global annual foreign direct investment (FDI) flows in 2012 (US$465 billion). • BRICS countries account for 17% of world trade. • BRICS’ combined foreign reserves are estimated at US$4 trillion. • Some analysts predict that BRICS could become as big as the Group of 7 (the United States of America [USA], Japan, Germany, France, Britain, Canada and Italy) by 2027. • South Africa has a population of more than 50 million and an economy worth approximately US$527 billion. Its per capita income level at
PPP compares favourably with BRICS partners, estimated at US$11 000. South Africa in BRICS South Africa’s comparative advantage within BRICS pertains to the country’s considerable non-energy in situ mineral wealth. In a recent report commissioned by the US-based Citigroup bank, South Africa was ranked as the world’s richest country in terms of its mineral reserves, worth an estimated US$2,5 trillion. South Africa is the world’s largest producer of platinum, chrome, vanadium and manganese, the third-largest gold-miner, and offers highly sophisticated mining-related professional services, contributing significantly to the BRICS resource pool. South Africa is investing R300 billion (US$35,6 billion) into expanding and improving its railways, ports and fuel pipelines, as a catalyst to help unlock the world’s greatest mineral wealth. Africa will also continue to be buoyed by the exploding global demand for oil, metals, minerals, food and other natural resources. Likewise, the African continent, which is arguably one of the world’s largest unexplored resource basins, has an abundance of riches, including 10% of the world’s oil reserves, 40% of its gold ore and 95% of platinum. The demand from BRICS countries for these commodities has been a critical source to support growth on the continent, notably during the recent financial crisis.South Africa’s financial market development and sophistication, also as a source of exceptionally sophisticated professional services and financial expertise, is globally recognised. The World Economic Forum’s 2011/12 Global Competitiveness Index displayed a high level of confidence in South Africa’s financial market development, ranking the country in fourth place globally on this measure. The regulation of the Johannesburg Stock Exchange was ranked number one in the world, as was the strength of South Africa’s auditing and reporting standards. Additionally, South Africa is ranked second for both the soundness of banks and the efficacy of corporate boards. South Africa’s excellence in science, technology and innovation is also recognised, e.g. it being awarded the majority stake in hosting the Square Kilometre Array. BRICS countries supported South Africa in obtaining the majority stake.
EDITORIAL CONTRIBUTION
Bilateral trade between South Africa and its BRICS partners grew substantially in 2011 – powered by significant increases in trade and exports between the country and China and India. In 2011, bilateral trade between South Africa and China grew by 32%, with India by 25% and with Brazil by 20%. In 2011, bilateral trade between South Africa and Russia also recovered, after a decline of 44% in 2010, but is still below the R4,2 billion in bilateral trade recorded in 2008 between these two countries. Bilateral trade with China last year totalled R188 billion, with India R55 billion, with Brazil R18 billion and with Russia R3,8 billion. Among BRICS members, South African exports to China grew the most, at 46%, while exports to India grew by 20%, to Brazil by 14% and by 7% to Russia. South African exports to China have grown rapidly, after increases of 20% in 2010 and 42% in 2009. In terms of the balance of trade, South Africa has run a trade surplus with Russia in the last two years of R1,3 billion and R1 billion respectively, after running trade deficits in 2008 and 2009. While South Africa has continued to run a trade deficit with China over the last four years, that deficit has narrowed by over 50% from R48 billion in 2008 to less than R18 billion in 2011. South Africa’s trade deficit with Brazil also narrowed in 2011, to R6,1 billion – almost R2,5 billion less than the deficit recorded in 2008. South Africa enjoys recognition as a dedicated and committed global and regional player. South Africa’s constructive role in global governance structures as well as its position within organisations of the South, notably the African Union (AU), the Group of G77 (G77) and China and the Non-Aligned Movement (NAM), is appreciated by BRICS and other like-minded partners. South Africa is also the only African country represented in the Group of 20 (G20), which has become an important role player in the reform of the financial and economic global governance architecture. South Africa has always been at the forefront of promoting more inclusive formations and more equitable participation of notably emerging markets and developing economies in the world system and its decision-making structures. This belief stems from our core conviction that Africa has to be repositioned in the global system to assume its rightful place. South Africa, together with other African countries, initiated the dialogue with the Group of 8 (G8) in 2000, which led to the subsequent endorsement of the AU’s New Partnership for Africa’s Development (NEPAD) by the international community at large.
processes for peace elsewhere in the world and continues to be approached in this regard. BRICS and Africa South Africa’s invitation to join BRICS recognises the country’s contribution to shaping the socio-economic regeneration of Africa, as well as the country’s active involvement in peace, security and reconstruction efforts on the continent. The BRICS countries constitute the largest trading partners of Africa and the largest new (not total) investors. The past decade has seen a seismic acceleration of commercial and strategic engagements between BRICS and Africa. BRICS has nourished Africa’s economic emergence and elevated the continent’s contemporary global relevance. The exponential growth potential of economic cooperation between BRICS and African countries is deemed considerable. The recession and recovery period has enhanced this shift. In 2010, Standard Bank economists predicted BRICS-Africa trade would “see an additional increase in the velocity of BRIC-Africa engagements, with trade and investment spearheading the commercial charge”. According to Standard Bank, BRICS-Africa trade will increase threefold, from US$150 billion in 2010 to US$530 billion in 2015. Between 2010 and 2015, BRICS’ share of Africa’s total trade will increase from one-fifth to one-third and BRICS FDI stock in Africa will swell from around US$60 billion in 2009 to more than US$150 billion by 2015. While South Africa’s share was not absorbed into these projections at the time, South Africa’s trade with Africa accounts for 17% of South Africa’s total trade, 21% of its outward investment and when broken down, 14% of its total exports to the world, as well as 24% when including the Southern African Customs Union. The International Monetary Fund (IMF) also conducted a study, which indicated that the trade and investment from BRICS to low-income countries was deemed as a critical factor to protect them from the shock of the global recession. BRICS leaders have expressed support for infrastructure development in Africa and its industrialisation within the framework of NEPAD. The leaders reiterated the highest importance attached
to economic growth that supports development and stability in Africa, as many of these countries have not yet realised their full economic potential. The BRICS leaders undertook to take their cooperation forward to support Africa’s efforts to accelerate the diversification and modernisation of its economies, through infrastructure development, knowledge exchange and support for increased access to technology, enhanced capacity-building and investment in human capital, including within the framework of NEPAD. BRICS Summits South Africa is hosting the fifth BRICS Summit in March 2013 in Durban, completing the first cycle of BRICS summits. The opportunities presented in hosting this prestigious summit are considerable. Previous summit were held in: • Yekaterinburg, Russia, on 16 June 2009 • Brasilia, Brazil, on 15 April 2010 • Sanya, China, on 14 April 2011 • New Delhi, India, on 29 March 2012. South African considerations for business South Africa’s national agenda is aimed at achieving inclusive economic growth for its people as well as the people of the continent. This objective is strongly complemented by the exponential and accelerator growth potential which BRICS engagement has delivered to the country and its neighbours. The potential for growing trade and investment, as well as intra-African trade and investment, must be further maximised. South Africa will utilise its chairpersonship of BRICS in 2013 to vigorously pursue support for these goals. South Africa’s membership of BRICS will: • promote trade and investment • enhance industrialisation • promote job creation. South Africa will benefit and will continue to benefit from being a member of the BRICS grouping. The South African Government has pledged its commitment to continuously engage and support business in South Africa and also work tirelessly in tandem with its BRICS counterparts to forge stronger partnerships to deliver prosperity and progress to the people of South Africa. These relationships are also viewed as mutually beneficial for our BRICS partners.
At the last BRICS Summit, President Zuma once again strongly articulated this view, also in light of the issue of the World Bank Presidency, where Africa had put forward an exceptionally merit-based candidate and BRICS leaders called for a World Bank leadership that must commit to transform the bank into a multilateral institution that truly reflects the vision of all its members, including the governance structure that reflects current economic and political reality. South Africa’s own unique historic political transformation process to become a constitutional democracy is perceived as a unique contribution to the world. The country has facilitated similar
Brics Summit publication / PAGE 23
EDITORIAL CONTRIBUTION
• Regionally, South Africa provides direct access to the rest of the continent and is situated between the East, the Americas, Europe and the Middle East. South Africa has many geostrategic and related structural advantages, making it an excellent investment destination and ideal “gateway” partner in the African growth story. • Complementary to this existing and strong consumer market are the exciting regional integration initiatives taking place on the continent. Negotiations are underway to establish a 26-country, US$1-trillion African Tripartite Free Trade Area (T-FTA) for East, Southern and Central Africa within three years, which will expand this market to 600 million people. This regional integration initiative will put us in the same market-size bracket as our BRICS counterparts. • Another related and exciting new initiative is that of the Southern African Development Community (SADC) Regional Infrastructure Master Plan (RIMP), which could involve cross-border projects with a combined investment value of up to US$500 billion. The RIMP was finalised and presented at the SADC Summit, held in Mozambique, Maputo, in August 2012. The plan proposes the development of regional power, transport, water, communications, tourism and metrology infrastructure over the 15-year period, from 2012 to 2027. The intention is to align the implementation of the plan with the establishment of a SADC development fund, or bank, with an initial capitalisation of between US$600 million and US$1 billion. • At present, intra-regional trade comprises less than 20% of total trade and the bulk of that trade takes place between South Africa and the other 14 SADC member states. Once the plan has been officially endorsed, the SADC Secretariat will conduct roadshows in BRICS and other countries, targeting Brazil, China, Europe, India, Japan, the United Kingdom and the USA to expose potential investors to the opportunities available within the RIMP. The Project Preparation Development Facility has already been established at the Development Bank of Southern Africa. • The growth rate for sub-Saharan Africa is estimated at around 5,5 % for 2012; and The Economist of 6 January 2011 predicts that between 2010 and 2015, seven out of the top 10 fastest-growing economies in the world will be African. There are many reasons for this sustained growth. These include greater stability and the increasing prevalence of democracies, global demand for Africa’s commodities and improved economic regulatory and governance regimes. South Africa is also cognisant that the African “demographic dividend” is already recognised by economists as the future locus for growth. • According to Standard Bank’s research, the five enduring factors driving this are a growing, younger and more affluent population; urbanisation; improved information and communications technology (ICT): sustained demand for Africa’s natural resources; and a deepening financial sector as Africans take up financial services personally and for business. In 2010, BRICS accounted for 13% of global demand in the ICT sector, with spending of about €328 billion. • As South Africa is one of the leading investors among developing countries on the continent, South African companies can take advantage of this unique position, through partnering with BRICS companies to explore commercial opportunities in Africa. For example, the
PAGE 24 / Brics Summit publication
•
•
•
•
•
•
Brazilian company Vale has partnered with South Africa’s Rainbow Minerals in an agreement worth more than US$1,2 billion to build a copper mine in Zambia. Tata Power has formed an equal joint venture with South Africa’s Exxaro Resources, named Cennergi (Pty) Ltd, to develop and operate power-generation projects in South Africa initially and will later have projects in Botswana and Namibia. There certainly is a wide scope for cooperation in various projects within the existing BRICS structures. President Zuma addressed BRICS’ captains of industry prior to the last BRICS Summit and emphasised that South Africa’s participation in BRICS was designed to help the country achieve inclusive growth, sustainable development and a prosperous South Africa. The BRICS Business Forum’s joint statement called on the respective governments to deepen economic engagement of which trade and investment were identified as the pillars of such an engagement. The target for intra-BRICS trade was set to be enhanced from the present level of US$230 billion to at least US$500 billion by 2015. The business leaders called for improvement of the quality of trade by focussing on more value-added trade in the three sectors of manufacturing, services and agriculture. South Africa’s service sector comprises two-thirds of our economy (65,9%), which compares favourably with our BRICS partners and provides niche opportunities. The BRICS Business Forum further cited opportunities in sectors such as, but not limited to, agriculture, energy, infrastructure, mining beneficiation and healthcare. The country already enjoys comparative advantages in these cited sectors. Domestic economic priorities, such as increased beneficiation at source, could be pursued through joint partnerships and ventures. At the Delhi Summit, other possible areas of cooperation, ranging from energy to construction and water provision, were also discussed. President Zuma urged in his State of the Nation Address that the triple challenge of poverty, unemployment and inequality required single-minded attention. The New Growth Path is geared at achieving inclusive growth and creating jobs. Six jobs drivers were identified to help the country achieve the much-needed growth leading to jobs. These are infrastructure development, agriculture, mining and beneficiation, manufacturing, the green economy and tourism. To facilitate the success of these drivers, business should focus on enhancing intra-BRICS business cooperation and coordination by promoting opportunities in the following areas:
Cooperation on economic opportunities in infrastructure development • South Africa has begun working intensively on its infrastructure strategy through the Presidential Infrastructure Coordinating Commission (PICC). South Africa is on course to spend in excess of R860 billion on infrastructure by March 2014. Infrastructure is therefore at the heart of how the country will change the lives of its people in the next decade.
• Beyond the South African programme, is the NEPAD infrastructure programme that South Africa champions as mandated by the AU, especially the North and South road and rail projects. Cooperation on skills development • The PICC is developing a skills plan for each major project, setting out the number of engineers, artisans, technicians and technologists needed. Work is being done with universities and further education and training colleges to speed up the production of these critical skills. • Business is urged to invest in skills development in their companies to promote youth training and empowerment through their engagement with BRICS countries. The new development bank • South Africa is excited by the plans for a new BRICS-led development bank, which would further facilitate cooperation among members of the BRICS business community. The bank will reinforce the BRICS grouping by utilising surplus reserves. It will also encourage investment in a more sustainable and productive manner. • South Africa will co-chair with India the joint working group under the auspices of the respective BRICS finance ministers to ensure that this initiative’s feasibility be thoroughly investigated as well as benefit South Africa and Africa to the fullest extent possible. • President Zuma has signalled that South Africa can negotiate new types of mutually beneficial developmental agreements with BRICS countries on infrastructure development. Promoting intra-BRICS trade • Agreements signed during the BRICS Summit under the auspices of the BRICS Inter-Bank Cooperation Mechanism include the Master Agreement on Extending Credit Facility in Local Currency and the Multilateral Letter of Credit Confirmation Facility Agreement. • These measures are intended to increase commercial transactions, since currently, businesspeople have to convert local currencies into dollars before reconverting them into the currency of the trade partner, and this escalates transaction costs. • Another exciting initiative that has been launched is the Alliance of Exchanges, which will entail cross-listing of equity index derivatives and trading in the local currency. • Companies are encouraged to facilitate engagement with their counterparts in BRICS countries. • South Africa seeks to increase its exports of higher value-added products and encourage inward investment to support beneficiation and industrial development objectives. The work in BRICS is increasingly focussed on cooperation to achieve these ends. Cooperation on another crucial infrastructure project is underway • The proposed high-capacity marine cable system linking the BRICS countries requires collective involvement. This will address the connectivity challenges which have featured as impediments to intra-BRICS trade.
LOST IN TRANSLATION? Cecilia BermĂşdez Horsten and Simona Gallo Mosala, the people behind Kwintessential Africa not only cover over 8 languages between the two of them and have over 20 years experience in the business, they also have a Masters in Practical Anthropology and a Phd in Socio-Economics from the University of Cape Town: they deeply understand the culture that creates and develops a language; they make sure their team translates your concepts and thoughts - not just words. As a dynamic international company owned and run by a multi-cultural team, Kwintessential puts strong emphasis on cultural diversity, for translations and interpreting that are truly global.
COMPANY PROFILE Kwintessential was founded in 2003 in London, England at a time when the process of globalisation had cemented itself as the future and companies were increasingly needing to work across cultural and linguistic borders. The company was established to ease the process of international business and multilingual business transactions through support services covering any needs falling under the umbrella of language and culture. It has now grown dramatically in both size and scope to offer a number of services such as translation, interpreting, transcription, multilingual subtitling and voice-overs. These services are provided by a team of offices across the globe including the USA, Argentina, England, Dubai and South Africa/Namibia. We cover all needs, all time zones, all languages and all cultures. We truly are the provider of cross-cultural and multilingual solutions. Our Cape Town office, established in 2009, and our Windhoek office, established in 2011, are
run by a team of dedicated Project Managers and Linguistic Consultants. We respond to clients quickly and efficiently, we work only with the best translators and interpreters in the continent and are proud to complete assignments of the highest quality tailored to the individual needs of our clients.
INTERPRETATION Kwintessential offers professional services for all of your language-related needs for anything from small meetings to large conferences. We work out your exact language requirements for your event and provide you with the best quotation for your needs. Kwintessential arranges liaison, consecutive and simultaneous interpretation. We provide professional interpreters and handle the distribution of preparatory documentation to the interpreters. We guarantee high-quality services and ensure confidentiality.
TRANSLATION Our qualified, highly experienced translators provide standard, technical and sworn translations across a wide range of languages and areas of speciality. We offer translations between all South African official languages and among the other languages we currently offer to clients are other African, European, Middle Eastern and Asian languages such as French, Spanish, Portuguese, Italian, German, Russian, Greek, Arabic, Hebrew, Dutch, Polish, Scandinavian languages, Kiswahili, Mandarin, Japanese and Korean. Should new language pairs be required we will source them. Our application and screening process ensures that only the best translators and interpreters are commissioned by our company.
Services offered Multi-lingual services including translation, interpretation (liaison, consecutive and simultaneous), transcription, multilingual subtitling and voice-overs. Customer care Each project is overseen from beginning to end by a dedicated Project Manager who will ensure that your specific needs are met. Pricing Our prices are competitive and we provide free quotations upon request, based on the length and complexity of each assignment. Confidentiality Kwintessential ensures the confidentiality of all material received and we are also happy to sign non-disclosure agreements.
Namibia Office Tel: +264 61 249 021 Fax: +264 88 640 0589 Cell: +264 81 758 9966 chorsten@kwintessential.co.za South Africa Office Tel: +27 84 198 0006 Fax: +27 86 560 1456 Cell: +27 79 240 2821 info@kwintessential.co.za
MetropolitanRepublic/9983/E
This is not a tablet. It’s a library. We’re partnering with organisations and individuals who are as committed to our communities as we are. Every day, we’re developing and launching products and services that make sure that everyone who has a mobile phone has access to books, e-learning and other innovative educational facilities. It doesn’t matter where you are, everywhere you go, you can learn something new with MTN.
Welcome to the New World.
EDITORIAL CONTRIBUTION
Benefits from partnership
Brazil • In 2011, Brazil ranked 26th as an export
• Marco Polo has invested more than
African mining company, Africa Rainbow
plant in South Africa.
Minerals (ARM), has formed Konoco, a project situated in Zambia, which is
partner and 15th as an import partner of South Africa globally. Total bilateral trade
• Brazil mining company, Vale, and South
$10 million in a bus and coach manufacturing
• Brazil’s largest construction company,
between South Africa and Brazil amounted
Odebrecht, established a regional office in
to R17,5 billion in 2011, which was 18,6%
South Africa in September 2011.
expected to start extracting copper by 2013. • As a result of the success of the current A-Darter programme, it is possible that the
higher than in 2010. • South African investments into Brazil were led by
Brazilian Air Force will undertake further
South African businesses, which include among
joint development projects with South
together with Brazilian joint venture
others, Naspers, Sappi, Standard Bank, AngloGold
Africa. However, although some preliminary
partner, Invepar, won a R70-billion
Ashanti, Anglo American, Acx do Brasil-Acerinox
discussions have taken place, no formal
($9,2-billion) concession to overhaul and
(Columbus Steel), SAA, Distell, Dimension Data,
negotiations have started and no decisions
operate the busiest and most valuable of
DexBrasil, Volcano Agro-sciences, Bosch Projects,
have been made. The A-Darter is a fifth-
the three Brazilian airports, Guarulhos, in
Barrows and the Smollan Group.
generation infrared homing air-to-air
• The Airports Company South Africa,
missile, being jointly developed by South
São Paulo for the next 20 years. • South Africa and Brazil are improving industrial
Africa and Brazil under the leadership of
cooperation in a number of sectors, including
Denel Dynamics. Although classified as
Marco Polo, Odebrecht and Vale, with additional
rail equipment, renewable energy, defence,
short-range, it has a longer range than
Brazilian investors entering the market.
aerospace and biofuels.
most missiles in its category.
• Investors from Brazil into South Africa include
PAGE 28 / Brics Summit publication
EDITORIAL CONTRIBUTION
• ethyl acrylate
(nickel and associated metals), EVRAZ
tourism arrival markets. Tourism grew with
• butyl acrylate
Group SA (steel, alloys and vanadium) and
1% between 2010 and 2011 to 54 183. There
• residual lyes from the manufacturing of
OAO Severstal (steel).
• Brazil is one of South Africa’s top 20
was also a phenomenal 68,4% growth in
wood pulp
arrivals from Brazil during the first six
• chemical wood pulp (dissolving grades)
months of 2012.
• cast glass and rolled glass
Russian market are: SABMiller (brewery),
• float glass or polished glass in sheets.
Anglo American/Mondi Group (paper and packaging), Naspers (international media),
• In 2011, South Africa exported the following
Bateman and Shaft Sinkers (engineering),
commodities to Brazil:
Russia Mining and minerals: • coal and briquettes • petroleum oils and oils obtained from bituminous minerals
• South African companies active in the
Anglo American Platinum (mining) and Standard Bank (banking and finance).
• There was substantial growth in total trade between South Africa and Russia between 2010 and 2011 from R2,8 billion to R3,6 billion.
• According to The Presidency, Russia has expressed interest in cooperating with South
Africa in the construction of nuclear power plants.
• chromium ores and concentrates
South African exports increased from
• titanium ores and concentrates
R2,1 billion in 2010 to R2,2 billion in 2011.
• ferro-manganese
Russia is South Africa’s 41st-biggest export
export markets. In 2011, Russia was South
• ferro-vanadium
destination.
Africa’s sixth most important importer of bulk wine and 18th-largest importer of
• ferro-chromium • zirconium ores and concentrates • sulphates of nickel
• Russia is one of South Africa’s main wine
• South Africa’s exports basket to Russia is
South African packaged wine.
dominated by primary sector products, particularly the agricultural sector consisting
• South Africa wants to cooperate with
Other:
of citrus fruits, apples and pears; mineral
Russia in engineering, especially with the
• paraffin wax
products; machinery; equipment; vehicles;
training of South Africans in Russia.
• fenole
chemical products; precious and base metals;
• new pneumatic tyres of rubber
raw hides; textiles; and footwear. The Russian
• wire of iron or non-alloy steel
Federation’s exports basket is concentrated
a hoisting equipment company, secured a
• flat-rolled products of iron or non-alloy
more on fabricated products.
R13-million contract from Russia to deliver one of the biggest cranes ordered from the
steel • flat-rolled products of stainless steel
• At the beginning of 2012, Condra which is
• Mutual investment projects in progress
South Africa-based crane group to date.
• aluminium plates, sheets and strips
in both countries are mainly engaged in
The maintenance crane will be installed at
• spark-ignition reciprocating or rotary
mineral resources. A number of major
a power generation plant in Russia’s Ural
Russian companies operate in South Africa,
mountains. The hoist will be manufactured
• natural sands
among them Renova Group (manganese
at Condra’s Germiston factory, owing to
• unsaturated acyclic hydrocarbons
and alloys), OJSCMMC Norilsk Nickel
the complexity of assembling this part of
internal combustion piston engines
Brics Summit publication / PAGE 29
EDITORIAL CONTRIBUTION
the crane. The girders and end carriages
deal makes Denel Aviation the only company
sells through a network of independent
were manufactured at the plant in Bulgaria.
in sub-Saharan Africa accredited to perform
dealers, of which Barloworld is one. From
maintenance, repair and overhaul services for
December 2012, VostochnayaTechnica
models produced by the Russian manufacturer.
LLC‚ the Barloworld Russian dealer‚ will
Regulator signed a cooperation agreement
Russian Helicopters has about 280 helicopters
provide sales‚ service and support for all of
with Russian regulator Rostechnadzor. The
in service across Africa. The Russian Helicopters
the former Bucyrus mining products in its
agreement covers radiation and nuclear
agreement would significantly expand the
service territories within Russia.
safety and security. Rostechnadzor is Russia’s
company’s business in Africa.
• In 2012, South Africa’s National Nuclear
• In 2011, South Africa exported the following
technical and technology regulator and is responsible for Russia’s nuclear industry.
• In November 2012, South African industrial
commodities to Russia:
firm Barloworld said it would pay $50 million for Caterpillar’s Bucyrus distribution.
Agriculture:
and manufacturer Russian Helicopters signed an
Caterpillar, the world’s largest maker of
• fresh grapes
agreement that will result in the two creating a
mining equipment, last year acquired
• fresh apples
servicing hub for Africa. The Russian Helicopters
Bucyrus for $7,6 billion. Caterpillar typically
• fresh pears and quinces
• In September 2012, state arms company Denel
• fruit and vegetable juices Mining and minerals: • manganese ores and concentrates Other: • aluminium plates, sheets and strips • machinery for sorting, screening, separating, washing, crushing, grinding, mixing or kneading mineral substances • electrical apparatus for switching or protecting electrical circuits • glaziers’ putty, grafting putty, resin cements, caulking compounds and other mastics.
India • In 2011, bilateral trade between South Africa and India stood at R53,7 billion. South Africa was exporting goods to the value of R24,4 billion to India and importing goods
PAGE 30 / Brics Summit publication
EDITORIAL CONTRIBUTION
from India to the value of R29,3 billion.
• Bajaj, the main Indian motorcycle
(Pty) Limited, will be a 50:50 joint venture
Trade between South Africa and India is set
manufacturer, has opened four outlets
between Exxaro and Tata Power through
to reach $15 billion
around Johannesburg to target the
its subsidiary Khopoli Investments. Based
(R116 billion) per year by 2014.
untapped South African bike market. • In October 2012, Sanlam acquired a 26%
• India ranks among the top 10 investing countries in South Africa.
in South Africa, Cennergi will focus on acquiring and developing electricity-
stake worth R2 billion in a major Indian
generation projects in South Africa,
financial services company, Shriram Capital
Botswana and Namibia, starting with
Limited (SCL).
renewable energy projects in South Africa.
• The top exported products to India include: coal, briquettes, solid fuels, manganese
• In September 2012, the Indian Government-
• In August 2012, PetroSA and Indian oil
ores, copper ores, ferrous waste, scrap and
owned Bank of India (BOI) opened its first
and gas exploration company Cairn India
scrap of iron.
branch in South Africa in Johannesburg.
Group signed a farm-in agreement for
BOI said that the growing trade between
crude oil and natural gas exploration in
South Africa and India meant that banking
the Orange Basin on the west coast of
include: Tata (automobiles, information
requirements of businesses in both
South Africa.
technology, hospitality, and ferrochrome
countries would increase.
• Major investors from India in South Africa
• Tourist arrivals from India increased by
plant), UB Group (breweries, hotels), Mahindra (automobiles) and a number
• In July 2011, Tata Motors South Africa, the
26,2% between 2010 (71 587) and 2011
of pharmaceutical companies, including
joint venture between India’s Tata Motors and
(90 367). It is South Africa’s 15th most
Ranbaxy and Cipla.
Tata Africa, opened a R110-million assembly
important tourism market. To increase
plant at Rosslyn outside Pretoria. Light,
tourism numbers in the future, the
• South African investments into India were
medium and heavy trucks are assembled at
Southern African Tourism Association is
led by SAB Miller (breweries), Sanlam and
the plant, at a rate of 3 650 vehicles a year.
boxes), Adcock Ingram (pharmaceuticals) and Rand Merchant Bank (banking).
training more than 1 000 Indian travel agents and tour operators in India to
Old Mutual (insurance), Altech (set-top • FirstRand Bank India in Mumbai, a branch of FirstRand Banking Group South Africa, is
ensure they have the skills and experience to market South Africa.
the first bank from the African continent to • In May 2011, India revealed plans to invest R39 billion (US$5,7 billion) in education
be granted a full-scale commercial banking licence in India.
• In 2011, South Africa exported the following commodities to India:
and development in Africa as part of the Africa-India framework for enhanced cooperation.
• South African-based diversified resources
Agriculture:
company Exxaro and India’s Tata Power
• fresh pears and quinces
have launched a joint venture company
• wool
• In 2012, Indian firm WNS, one of the world’s
that aims to take advantage of renewable
largest call-centre players, acquired South
energy projects in South Africa and on the
Mining and minerals:
African firm Fusion Outsourcing for £10 million.
continent. The new company, Cennergi
• coal and briquettes
Brics Summit publication / PAGE 31
EDITORIAL CONTRIBUTION
• diamonds
Manufacturing:
• platinum
• waste from the manufacture of iron or steel
• silver
• parts and accessories of motor vehicles
• ferro-chromium
• containers specially designed and
• ferro-manganese
equipped for carriage by one or more
• manganese ores and concentrates
modes of transport
• chromium ores and concentrates
• machinery for sorting, screening,
China • In 2011,South Africa’s exports to China reached an all-time high, valued at R85 billion, displaying a 45% increase in exports from 2010. • South Africa’s agricultural, forestry and fishery
• lead ores and concentrates
separating, washing, crushing, grinding,
exports to China increased by 42% between
• copper ores and concentrates
mixing or kneading for mineral substances
2010 and 2011. China is now South Africa’s
• iron ores and concentrates Chemicals:
• centrifuges, including centrifugal dryers,
fourth-largest export market after ranking
filtering or purifying machinery and
seventh during 2010. The top five major
apparatus for liquids or gases
products exported by South Africa to China
• phosphoric acid and polyphosphoric acids
• aluminium waste and scrap
during 2011 were wool, wood pulp, grape wines,
• antimony oxides
• unwrought aluminium
fish meal and sheep skins. Exports of wood pulp
• butan-1-ol (n-butyl alcohol)
• copper waste and scrap
and grape wines also increased substantially by
• phenol (hydroxybenzene) and its salts
• iron or non-alloy steel products
143% and 111% respectively during 2011.
• butanone (methyl ethyl ketone)
• non-alloy pig iron
• 4-methylpentan-2-one (methyl isobutyl
• float glass or polished glass in sheets
• chemical wood pulp
from South Africa, taking up 48% of the total
• tanning extracts of vegetable origin;
value of wool exported from South Africa.
ketone)
• polyvinyl chloride, not mixed with any other substances
• China remains the largest importer of wool
tannins and their salts, ethers, esters and other derivatives; wattle extract.
• Although South Africa only supplies 3% of the Chinese wine market, China has now become one of South Africa’s top 10 export destinations. South African wine exports to China were expected to increase by at least 71% during 2012. Leopard’s Leap Wines has partnered with Yangzhou Perfect – a subsidiary of organic products company Perfect China – to produce and distribute L’Huguenot, a new brand that was specifically created for the Chinese market. The joint venture, aptly named Perfect Wines of South Africa, will see Leopard’s Leap holding a 49% stake, with the rest held by Yangzhou Perfect. The first shipment in October 2011 consisted of 1,3 million bottles, packed into 106 containers. It was the largest consignment of wine ever from South Africa and the biggest China had ever received. • The South African companies which participated in the 2011 South African expos in China generated on-the-spot export sales of value-added products worth R8 million and estimated future export sales over the medium term (next three years) of about R400 million. The expos seek to expand the basket of export products into China, and change the current structure of trade to comprise more value-added products over the long term. • In October 2012, South African expos were hosted in Beijing and Shanghai and produced long-term mutual benefits and positive leads for South Africa’s business delegation which exhibited their products at the annual event. Of the 63 companies that participated and represented various sectors, agroprocessing, especially wine, proved to be the most popular product.
PAGE 32 / Brics Summit publication
EDITORIAL CONTRIBUTION
for the remainder of the year. The plant was
Food:
Cape, clinched R1,5 million worth of sales
scheduled to produce 107 200 engines in 2012,
• crustaceans
and secured 70 trade leads.
of which 50 200 engines were for the locally
• Simonsvlei, a wine producer in the Western
built Polo and Polo Vivo models, while 57 000
Construction:
engines were destined for three export markets,
• natural sands of all kinds
identified a potential agent to market and
namely India, Mexico and China, with the latter
• cement clinkers
distribute their products in China
being VWSA’s biggest engine export market.
• Xchem Chemicals has successfully
Metals and mining: • Transnet has awarded a contract for 95 electric
• In 2012, China African Precious Metals
• coal and briquettes
locomotives to a group led by China’s CSR
(CAPM) took control of Pamodzi Gold’s
• platinum
Zhuzhou Electric Locomotive (CSR). The first
Orkney mine. CAPM is 74% owned by
• iron ores and concentrates
10 locomotives will be assembled in China while
Superb Gold Ltd, with 26% owned
• diamonds
the remainder will be manufactured in South
by a Broad-Based Black Economic
• manganese ores and concentrates
Africa. The trains will be used in Transnet’s
Empowerment consortium,
• copper ores and concentrates • lead ores and concentrates
general freight business, with the first batch to be delivered by December 2013. The last
• In October 2012, South African firm COAL
• zinc ores and concentrates • chromium ores and concentrates
batch is planned for September 2014. Seventy
of Africa (CoAL) sold $100million in shares
per cent of the deal will go to CSR and 30% to
(24% stake) to China’s Beijing Haohua
• titanium ores and concentrates
the South African consortium Matsetse Basadi.
Energy Resource Group.
• zirconium ores and concentrates • cobalt ores and concentrates
Chinese manufacturer First Automobile Works has invested $100 million to build a vehicle and truck assembly plant in Coega in the Eastern
• Chinese company SinoSteel creates nearly 4 000 jobs for local people.
Chemicals:
Cape. The construction phase, which started at the end of 2012, would create an estimated
• ferro-chromium
• FirstRand has a Chinese Representative
• butan-1-ol • propan-1-ol (propyl alcohol) and propan-2-
1 000 jobs. An additional 500 permanent jobs
Office located in Shanghai. Through
would be created when the first phase of the
this office, it facilitates the financing of
truck assembly facility was commissioned.
cross-border trade between Africa and
• titanium oxides
Further employment would be created in the
Asia, including the provision of banking
• polymers of propylene or of other olefins in
second phase, when FAW started production of
products and services to financial
30 000 passenger cars a year.
institutions in the region.
ol (isopropyl alcohol)
primary forms Agriculture:
• BMW South Africa’s Rosslyn Plant outside
• During the first six months of 2012, China
• raw hides and skins of bovine or equine animals, sheep or lambs
Pretoria exported its 3 Series vehicles to
became one of South Africa’s top five
China at the end of 2012, after receiving a
source markets of overseas tourists with
• shorn wool
China Quality Certification Clearance Permit
a total of 60 272 Chinese tourists visiting
• cotton
from the authorities. While these Chinese
South Africa. This was the result of the
exports will start at a small level, the plan is
introduction of South African Airways’
Other:
for this market to ultimately make up around
(SAA) direct flights between Beijing and
• chemical wood pulp
10% of the total export volume. In 2012, BMW
Johannesburg in January 2012. Tourist
• shuttle cars for use in underground mines
South Africa’s Rosslyn Plant expected to
arrivals from China increased by 24,3%
export around 3 900 units to China.
between 2010 (68 309) and 2011 (84 883).
or low-construction flame-proof vehicles • aluminium tubes and pipes • aluminium plates, sheets and strip • aluminium waste and scrap
• In July 2012, Volkswagen Group South Africa’s
• The People’s Republic of China is one of
(VWSA’s) engine plant in Uitenhage, Eastern
seven members that joined the Square
• flat-rolled products of stainless steel
Cape, received an additional export order from
Kilometre Array (SKA) Organisation in
• copper waste and scrap
China. The additional order of more than 12 000
London on 23 November 2011.
• nickel plates, sheets, strip and foil
engines meant that the engine plant was running at full capacity with three working shifts a day
• In 2011, South Africa exported the following
• aluminium.
commodities to China:
Brics Summit publication / PAGE 33
EDITORIAL CONTRIBUTION
The fifth BRICS Summit –
Laying down a future road map for intense cooperation BY PINAK CHAKRAVARTY
B
RIC(S) is the only grouping
key roles in their economic growth. Each
cities, statistical authorities and competition
whose name was coined by a Wall
country, however, had different experiences
authorities. BRICS development banks are also
Street-based finance company
in promoting the development of the
cooperating with each other with the aim of
in 2001, while predicting a shift
manufacturing sector and increasing its
increasing intra-BRICS trade and investment
in global economic power, away
share in the GDP. Their growing middle class
flows. BRICS countries are also engaged in
from the developed G7 countries towards
is another aspect of strength among BRICS
discussion on swap arrangements among
the developing world. It was, however, the
economies. It is believed that by 2020 the
the BRICS national currencies as well as
shared will of BRICS countries to engage with
middle class in BRICS countries will surpass
reserve pooling arrangements. Three sectoral
one another as well globally, in articulating
that of the G7.
forums – BRICS Think-Tanks, Business Forum and Financial Forum – have also been set up.
and addressing issues of concern for the developing world and engaging in the
Between 2001 and 2010, BRICS countries
These meet prior to a summit and provide
global quest for solutions to contemporary
maintained an average growth rate, which
inputs into the summit agenda.
challenges that led to the formalisation of the
was twice as high as the Organisation for
grouping BRIC, now BRICS, in 2006.
Economic Cooperation and Development
India has committed itself to further
(OECD) countries’ average. Even in the
strengthening the BRICS cooperation
Over the last two decades, the BRICS
aftermath of the worst global economic and
framework. The BRICS Delhi Action Plan,
economies have contributed a substantial
financial crisis, BRICS countries, particularly
annexed to the Delhi Declaration issued by
part of the global gross domestic product
India and China – though they also witnessed
the leaders at the Fourth Summit in New Delhi
(GDP), world manufacturing (value added)
slower growth rates owing to weakening global
in March 2012, laid down the broad contours
and global manufacturing exports. As per 2012
demand – maintained their robust growth rates
of cooperation under India’s Chairmanship of
International Monetary Fund (IMF) estimates
and emerged as engines of economic growth,
BRICS. It provided an enabling framework for
of GDP at market prices, among the members
which helped global economic recovery. In
cooperation in identified areas.
of the G20, India holds the 10th position while
the recovery process, there are lessons for the
Brazil, China, Russia, and South Africa hold the
BRICS economies.
India’s initiative relating to a new BRICS–led Development Bank, for mobilising resources
7th, 2nd, 9th, and 19th positions, respectively. In terms of PPP, India occupies the 3rd
Since 2006, BRICS has evolved a number
for infrastructure and sustainable development
position and China, Russia, Brazil and South
of mechanisms of cooperation. BRICS
projects in BRICS and other emerging
Africa holds 2nd, 6th, 7th and 19th positions.
foreign ministers and finance ministers meet
economies and developing countries, is a
regularly. Regular meetings of the ministers
crucial initiative that has attracted wide
Structural economic transformation to
of agriculture, trade and health are held to
attention. The bank’s role would be to
enhance the role played by the manufacturing
explore new avenues of cooperation. BRICS
supplement the efforts of existing mechanisms
sector has been an important element of the
high representatives responsible for national
such as the World Bank Group and other
BRICS countries’ development strategies,
security have met to exchange views on a
multilateral development banks. BRICS finance
particularly in Brazil, China and India.
range of security-related issues of mutual
ministers and technical experts are exploring
While growing exports played a significant
interest. A meeting of BRICS speakers
the feasibility and viability of this idea.
role in the economic growth of the BRICS
was also held on the sidelines of the G20
countries, domestic consumption, investment
Speakers’ Meeting in Seoul in May 2011. Other
In the run-up to the fourth BRICS Summit
and productivity growth are now playing
BRICS tracks include meetings on friendship
in Delhi in March 2012, India hosted the first
PAGE 34 / BRICS SUMMIT PUBLICATION
EDITORIAL CONTRIBUTION
meeting of the Economic Research Group to
Research Foundation, in consultation with its
trust and understanding. It has facilitated the
bring economic content of BRICS cooperation
BRICS counterpart think-tanks, has worked on
evolution of convergent positions on many
into sharper focus. The Prime Minister of India,
the “Long-Term Vision for BRICS” at the fifth
global issues such as reform of international
Dr Manmohan Singh, proposed at the fourth
summit in Durban in March 2013.
financial institutions, support for a democratic and multipolar world order, World Trade
summit in New Delhi that in view of common challenges presented by urbanisation for all
A number of BRICS activities/meetings have
Organisation, sustainable development, and
BRICS countries, we should encourage sharing
been held under India’s chairmanship since the
certain regional and political issues.
of experience in areas such as urban water
fourth New Delhi Summit in March 2012.
supply and sanitation, waste management,
BRICS foreign ministers met on the sidelines
BRICS countries are together working
storm water drainage, urban planning, urban
of the United Nations General Assembly in
in an environment wherein supply-side
transport and energy-efficient buildings.
New York in September 2012. BRICS Trade
constraints, including the challenges of the
Pursuant to this suggestion, India hosted the
Ministers met in Puerta Vallarta, Mexico, in
global economic slowdown, volatility in
first BRICS Urban Infrastructure Forum in New
April 2012 on the margins of the G20 trade
financial flows and food and energy security
Delhi on 1 February 2013, which facilitated
ministers’ meeting. BRICS health ministers
are prevailing trends. Maintaining the pace
sharing of experiences on water supply and
and BRICS high representatives responsible
of high economic growth and reconciling
sanitation, effective solid waste management
for national security met in New Delhi on
developmental needs with the imperatives
for improved environment and urban transport.
10 to 11 January 2013. Other meetings include
of sustainability and inclusiveness, are major
meetings of finance ministers and central bank
challenges for BRICS countries.
India coordinated a BRICS study with special
governors on the sidelines of G20 meetings/
focus on synergies and complementarities
other multilateral (World Bank/IMF) meetings;
The BRICS process is relatively new. It is
which was released at the Delhi Summit.
two meetings of CGETI (Contact Group on
exploring new forms of cooperation. We wish to
This was initiated at the suggestion of Prime
Economic and Trade Issues); a preparatory
strengthen cooperation under BRICS in a gradual
Minister Dr Manmohan Singh at the first
meeting of experts on agro-products and
manner; consolidating on the existing areas and
Summit in Yekaterinburg, Russia, in June
food security issues and the second meeting
simultaneously exploring new areas. Our objective
2009. A mention must also be made of the
of the Agriculture Expert Working Group;
is to project BRICS as a serious and effective
two agreements – a Master Agreement on
BRICS agriculture experts on climate change
grouping in the global discourse.
Extending Credit Facility in Local Currencies
and food security; the second BRICS Senior
and a BRICS Multilateral Letter of Credit
Officials’ Meeting on Science and Technology;
India looks forward to the fifth summit
Confirmation Facility Agreement – signed by
and the second BRICS Friendship Cities and
in Durban in March 2013, where the
the BRICS development banks at the fourth
Local Governments Cooperation Forum in 2012
responsibility of Chairmanship of BRICS
Summit. These are enabling instruments
in Mumbai. India will host the third meeting of
passes from India to South Africa. The
to reduce trade transaction costs and thus
BRICS Competition Authorities in November
Durban Summit will be a historic opportunity
significantly promote intra-BRICS trade.
2013. The BRICS competition authorities have
for the BRICS leaders to review progress so
held regular biennial meetings since their first
far and lay down a future road map for more
meeting in Russia in 2009.
intense cooperation.
formalised by India in their first meeting
BRICS serves as a useful platform for
in New Delhi in May 2009, before the First
consultation, coordination and cooperation
Summit in Yekaterinburg, Russia in June
on issues of mutual interest to all five
2009. The lead Indian think-tank, Observer
constituents in an environment of mutual
Pinak Chakravarty is the Secretary (Economic Relations), Ministry of External Affairs, Government of India & Indian Sherpa to BRICS
BRICS Track-II engagement among the leading think-tanks of the five countries was
BRICS leaders at the fourth summit in India in 2012
BRICS SUMMIT PUBLICATION / PAGE 35
EDITORIAL CONTRIBUTION
About South Africa
S
The warm Mozambique-Agulhas Current skirts
outh Africa is a country where
The country has common boundaries with
various cultures merge to form
Namibia, Botswana and Zimbabwe, while
the east and south coasts as far as Cape Agulhas,
a unique nation, proud of its
Mozambique and Swaziland lie to the
while the cold Benguela Current flows northwards
heritage. The country boasts some
north-east.
along the west coast as far as southern Angola. The contrast in temperature between these two
of the world’s most breathtaking
scenery and features an amazing display of
Completely enclosed by South African territory
currents partly accounts for important differences
bird- and wildlife species, which include the
in the south-east is the mountain kingdom of
in climate and vegetation between the east and
well-known Big Five (lion, leopard, elephant,
Lesotho. To the west, south and east, South
west coasts of South Africa.
buffalo and rhino). South Africa’s biggest asset
Africa borders on the Atlantic and Indian
is its people – a rainbow nation with rich and
oceans. Isolated, some 1 920 km south-east
It also accounts for the differences in marine
diverse cultures.
of Cape Town in the Atlantic, lie the Prince
life. The cold waters of the west coast are
Edward and Marion islands, annexed by South
much richer in oxygen, nitrates, phosphates
Africa in 1947.
and plankton than those of the east coast.
South Africa is often called “the cradle of
Consequently, the South African fishing industry
humankind”, for this is where archaeologists
is centred on the west coast.
discovered 2,5-million-year-old fossils of our
The country’s physical features range from
earliest ancestors, as well as 100 000-year-old
bushveld through deserts and forests, up
remains of modern man.
majestic mountain peaks and down to wide
The coasts
unspoilt beaches and coastal wetlands.
The coastline stretches more than 3 000 km
The land
and is an even, closed one with few bays or
South Africa occupies the southernmost tip of
The oceans
Africa. The country stretches latitudinally from
South Africa’s largest neighbours are the
22° to 35° S and longitudinally from 17° to 33° E.
Atlantic and Indian oceans, which meet at the
The only ideal natural harbour along the coastline
Its surface area is 1 219 090 km2.
southwestern corner of the continent.
is Saldanha Bay on the west coast. However, the
PAGE 36 / Brics Summit publication
indentations naturally suitable for harbours.
EDITORIAL CONTRIBUTION area lacks fresh water and does not offer natural
destination for foreign tourists. Being in the
Frost decreases to the north, while the coast
lines of penetration to the interior.
southern hemisphere, the seasons in South
is virtually frost-free. Along the coast, the
Africa are opposite to those of Europe and
humidity is much higher than inland and at
Rivers and lakes
North America. The country also falls squarely
times may rise to 85%. Low stratus clouds and
Most river mouths are unsuitable as harbours
within the subtropical belt of high pressure,
fog frequently occur over the cool west coast,
because large sandbanks block entry for most
making it dry with anabundance of sunshine.
particularly during summer. The only other area that commonly experiences fog is the “mist belt”
of the year. These bars are formed by the action
along the eastern foothills of the escarpment.
of waves and currents and by the intermittent
Although Durban (east coast) and Port Nolloth
flow, heavy sediment load and steep gradients
(west coast) lie more or less on the same
of most South African rivers. The country has no
latitude, there is a difference of at least 6°C in
The people
commercially navigable rivers and no significant
their mean annual temperatures.
According to Statistics South Africa’s (Stats SA) Mid-Year Population Estimates, 2011, released
natural lakes. Several artificial lakes are used Rainfall
in July 2011, there were 50,59 million people
South Africa has an average annual rainfall of
living in South Africa, of whom 79,5% were
The Orange River is South Africa’s largest
450 mm, compared with a world average of
African, 9% coloured, 2,5% Indian and 9% white.
river. It rises in the Drakensberg mountains,
860 mm. About 65% of the country receives less
Approximately 52% of the population is female.
traverses through the Lesotho highlands and
than 500 mm per year, which is generally
Nearly one-third (31,3%) of the population was
joins the Caledon River between the Eastern
accepted as the minimum amount required for
aged younger than 15 years and approximately
Cape and the Free State. Before it empties
successful dry-land farming.
7,7% (3,9 million) 60 years or older. Of those
mostly for agricultural irrigation.
younger than 15 years, approximately 23%
into the Atlantic Ocean, it forms the border with Namibia. Other major rivers include the
South Africa’s rainfall is unreliable and
(3,66 million) lived in KwaZulu-Natal and 19,4%
Vaal, Breede, Komati, Lepelle (previously
unpredictable. Large fluctuations in the average
(3,07 million) lived in Gauteng.
Olifants), Tugela, Umzimvubu, Limpopo and
annual rainfall are the rule rather than the
the Molopo.
exception in most areas.
Languages According to the Constitution of the Republic of
Relief features
About 21% of the country, mainly the arid west,
South Africa, 1996, everyone has the right to use
South Africa’s surface area falls into two major
receives less than 200 mm per year. Below-
the language and participate in the cultural life
physiographic categories: the interior plateau
average annual rainfall is more often recorded
of his or her choice, but no one may do so in a
and the land between the plateau and the coast.
than above-average total annual rainfall. South
manner that is inconsistent with any provision of
Forming the boundary between these two areas
Africa is periodically afflicted by drastic and
the Bill of Rights.
is the Great Escarpment, the most prominent
prolonged droughts, which often end in severe
and continuous relief feature of the country. Its
floods. In Cape Town, the capital city of the
Each person has the right to instruction in his or
height above sea level varies from about 1 500 m
Western Cape, the average rainfall is highest in
her language of choice, where this is reasonably
in the dolerite-capped Roggeveld scarp in the
the winter months, while in the capital cities of
practicable.
south-west, to 3 482 m in the KwaZulu-Natal
the other eight provinces, the average rainfall is
Drakensberg.
highest during summer.
Official languages The diversity of the unique cultures of
Inland from the escarpment lies the interior plateau,
Temperatures
South Africa means that there are 11 official
which is the southern continuation of the great
Temperature conditions in South Africa are
languages. Although English is the mother
African plateau stretching north to the Sahara
characterised by three main features: they tend
tongue of only 8,2% of the population, it is
Desert. The plateau itself is characterised by wide
to be lower than in other regions at similar
the language most widely understood, and
plains with an average height of 1 200 m above
latitudes, for example, Australia, due primarily
the second language of the majority of South
sea level. The dissected Lesotho plateau, which is
to the greater elevation of the subcontinent
Africans. However, government is committed
more than 3 000 m above sea level, is the most
above sea level; despite a latitudinal span of 13°,
to promoting all the official languages,
prominent. In general, the escarpment forms the
average annual temperatures are remarkably
including the Khoi, Nama and San languages,
highest parts of the plateau.
uniform throughout the country; and there is a
as well as Sign Language.
striking contrast between temperatures on the east and west coasts.
Religion
240 km in the east and south, and 60 km to
Owing to the increase in the height of the
According to the Constitution, everyone has
80 km in the west.
plateau towards the north-east, there is hardly
the right to freedom of conscience, religion,
any increase in temperature from south to north.
thought, belief and opinion. Almost 80% of
At least three major subdivisions are
Temperatures above 32° C are fairly common
South Africa’s population follows the Christian
recognised: the eastern plateau, the Cape
in summer, and frequently exceed 38° C in the
faith. Other major religious groups are the
folded belt and adjacent regions, and the
lower Orange River Valley and the Mpumalanga
Hindus, Muslims, Jews and Buddhists.
western plateau slopes.
Lowveld.
Climatic features
Frost, humidity and fog
not belong to any of the major religions, but
Although the country is classified as semi-arid,
Frost often occurs on the interior plateau
regard themselves as traditionalists of no
it has considerable variation in climate.
during cold, clear, winter nights with ice
specific religious affiliation.
Between the Great Escarpment and the coast lies an area which varies in width from 80 km to
A minority of South Africa’s population do
forming on still pools and in water pipes. The The subtropical location, on either side of 30°S,
frost season (April to October) is longest
(Acknowledgement: South Africa Yearbook
accounts for the warm temperate conditions
over the eastern and southern plateau areas
2011/12, Published by the Government
so typical of South Africa, making it a popular
bordering the escarpment.
Communication and Information System)
Brics Summit publication / PAGE 37
Group Five is a diversified construction, infrastructure concessions and related services group engaged in resources, energy, real estate and infrastructure delivery with a growing international client base in South Africa, the rest of Africa and Eastern Europe
Koeberg Interchange, South Africa
Anvil Kinsevere Mine Project Stage 2 and 3, DRC
Levy Business Park, Lusaka, Zambia
Asbestos-free building components
Skilled and experienced to deliver any aspect of an infrastructural project, including concept development, manufacturing, construction and operations as well as maintenance
We operate in Africa, the Middle East and Eastern Europe I Construction Charter Level 2 BBBEE rating I Winner of DEKRA Ethics Award 2009 I Ranked 4th in JSE SRI Index 2010 I 9th in Financial Mail’s top empowerment companies 2010 I 5th as Best Employer by CRF Institute 2012/13 I Employing 10 500 people in 25 countries I Celebrating 39 years as a listed entity
Moses Mahbida Stadium, South Africa
King Shaka International Airport, South Africa
Education Building PPP, South Africa
Water Treatment, Mauritius
Group Five Corporate and Business Services (Pty) Ltd 371 Rivonia Boulevard, Rivonia, Sandton I PO Box 5016, Rivonia 2128, South Africa I Tel +27 11 806 0111 I Fax +27 11 803 5829 I Email info@groupfive.co.za I Website www.groupfive.co.za
39
1 9 7 4
-
2 0 1 3
Years as a listed entity
EDITORIAL CONTRIBUTION
Fast facts on
Brazil, Russia, India and China
colonial capital, 1549 – 1763) shows an earlier age of plantation wealth,
BRAZIL Population: 184 184 000 Capital: Brasilia; 3 099 000 Area: 8 547 403 square kilometers (3 300 169 square miles) Language: Portuguese Religion: Roman Catholic Currency: Real Life expectancy: 69 GDP per capita: US $7 600 Literacy percent: 86
but today this is a poor region subject to devastating droughts. Millions have left here for jobs in the southeast. However, tourism has begun to boom due to sunny weather, samba music and soft sand beaches. The north, dominated by the Amazon, is the largest region with the fewest people. The Government is making progress in conserving the tropical rain forest and protecting the indigenous people. Tumucumaque National Park, created in 2002, is the world’s largest tropical forest park.
ECONOMY • Industry: textiles, shoes, chemicals, cement, lumber, iron ore • Agriculture: coffee, soy beans, wheat, rice; beef • Exports: transport equipment, iron ore, soy beans, footwear, coffee.
Brazil is the giant of South America with nearly half of the continent’s area and people; worldwide it ranks fifth in both area and population, which is as diverse as it is large. About 54% (103 million) are mainly of European origin, descendants of immigrants from Portugal, Italy, Spain, Germany and Eastern Europe. More than 44% (85 million) are black or of mixed-race, a legacy of the African slave trade. Less than 1% (700 000) are from indigenous groups, mostly Indians in the Amazon region; smaller numbers of Japanese, other Asians and Arabs live in the larger Brazilian cities. The motto “Ordem e Progresso”– Order and Progress – appears on Brazil’s flag. Political progress continues after years of military dictatorship gave way to civilian rule in 1985. Recent censuses reveal social progress, with lower infant mortality rates and higher literacy rates. Brazil’s growing urbanization rate helps economic development
RUSSIA Population: 143 025 000 Capital: Moscow; 10 672 000 Area: 17 075 400 square kilometers (6 592 850 square miles) Language: Russian Religion: Russian Orthodox, Muslim, other Currency: Russian Ruble Life expectancy: 65 GDP per capita: US $9 700 Literacy percent: 100
(some 80% of Brazilians live in urban areas), but creates serious social and environmental problems in cities. São Paulo, with some 10.9 million people, is Brazil’s largest city—
The country has rich mineral and energy resources. The mighty Volga,
and one of the world’s largest metropolises. It is the leading
Europe’s longest river, flows from northern Russia into the Caspian Sea.
industrial producer and financial center, but problems with pollution,
Siberia encompasses more than half the territory but is home to less
overcrowding, and poverty abound. The Southeast region of
than 20% of the population. Siberian workers toil at prying natural gas,
Brazil includes São Paulo, Belo Horizonte, and Rio de Janeiro—the
oil, coal, gold, and diamonds from the frozen earth. Commodities such
economic hub of Brazil, containing more than 40% of the country’s
as fur and timber also earn coveted foreign currency.
population. South of São Paulo is a rich agricultural region with European-style standards of living, where German and Italian
Invading Mongols controlled Russia from 1240 to 1380. In 1547 Ivan IV, a
are still spoken alongside Portuguese. Itaipu, the second-largest
Muscovite prince, adopted the ancient title of caesar (tsar in Russian).
hydroelectric power facility in the world, provides electricity to
He and his successors unified fragmented lands and began taking the
power-hungry São Paulo.
region that is today Siberia.
Brazil’s second most populous region is the northeast region, from
Russia looked westward after 1698, when Peter the Great returned from
Maranhao in the north down to Bahia (the most African of Brazilian
his travels in Europe. Conquering territory along the Baltic Sea, he built
states). The architecture of cities like Recife and Salvador (Portuguese
his mostly landlocked realm a port capital, St Petersburg (known from
PAGE 40 / BRICS SUMMIT PUBLICATION
EDITORIAL CONTRIBUTION
INDIA Population: 1 103 596 000 Capital: New Delhi; 295 000 Area: 3 287 270 square kilometers (1 269 221 square miles) Language: Hindi, English, 14 other official languages Religion: Hindu, Muslim, Christian, Sikh, Buddhist, Jain, Parsi Currency: Indian Rupee Life expectancy: 63 GDP per capita: US $2 600 Literacy percent: 60
The South Asian country of India includes a peninsula extending into the Indian Ocean, and it is a land of great contrasts in geography. The barren, snow-capped Himalaya, the world’s tallest mountain system, rises along its northern border. South of the Himalaya, the low, fertile Ganges Plain is India’s most populous region. The Great Indian Desert lies in the west, but eastern India receives some of the highest rainfall in the world during the monsoon season (June to October). India is second only to China in country population but India is growing faster (by some 17 million a year) and may surpass China by 2030. Although 81% of the people are Hindu, India also has more than 138 million Muslims – one of the world’s largest Muslim populations. Hindu culture evolved out of the mingling of indigenous Dravidian peoples and Aryan-speaking nomads who arrived from Central Asia in 1500 BC Islam spread across the subcontinent starting in the eighth century AD From the 17th century to the mid-20th century, India was the pride of the British Empire. Guided by Mahatma Gandhi, Indians won nationhood in 1947. From British rule they inherited deep poverty but also parliamentary government, the English language, and a farflung rail system, which helped knit the multi-ethnic country into a secular democracy often called the world’s largest democracy. A 1948 cease-fire line, known as the Line of Control, divides Kashmir between India and Pakistan. India claims that Kashmir legally is part of it, but Pakistan says that the mostly Muslim population should vote on which country to join. Diplomatic talks with China work to resolve border disputes in India’s northeast state of Arunachal Pradesh. Mumbai (Bombay) is the largest city and is home to Bollywood, India’s film industry. Bangalore is India’s Silicon Valley. India has a burgeoning middle class and has made great strides in engineering and information technology. 1924 until 1991 as Leningrad), and established Russia’s first navy. Russia entered the 20th century as enormous and imperial. Mikhail Gorbachev took office in 1985 and unveiled sweeping plans for economic restructuring (perestroika), soon followed by unprecedented political openness (glasnost). The Soviet Union dissolved after a failed coup in 1991, producing Russia and 14 independent republics – with Russian minorities totaling some 20 million. Russia seeks to protect
ECONOMY • Industry: textiles, chemicals, food processing, steel, transportation equipment, cement, mining • Agriculture: rice, wheat, oilseed, cotton, cattle, fish • Exports: textile goods, gems and jewellery, engineering goods, chemicals, leather manufactures.
these minorities, maintain its economic influence on resources (like oil), and confront separatism at home (as in Chechnya).
ECONOMY • Industry: mining and extractive industries, machine-building, ship-building, road and rail transportation equipment, communications equipment • Agriculture: grain, sugar beets, sunflower seed, vegetables; beef • Exports: petroleum and petroleum products, natural gas, wood and wood products, metals, fur.
BRICS SUMMIT PUBLICATION / PAGE 41
EDITORIAL CONTRIBUTION
estimated that some 60% of the country’s citizens will live in urban
CHINA
areas.
Population: 1 303 701 000
The first half of the 20th century saw the fall of the last Chinese
Capital: Beijing; 10 849 000
emperor, Japanese invasion, World War II, and civil war between
Area: 9 596 960 square kilometers (3 705 405 square miles)
Chinese Communist and Nationalist forces – ending with the retreat of
Language: Chinese (Mandarin), Cantonese, other dialects and
the Nationalists to Taiwan. The People’s Republic of China from 1949
minority languages
to 1976 imposed state control on the economy. Since 1979, China has
Religion: Taoist, Buddhist, Muslim
reformed its economy and allowed competition, and today it has one
Currency: Yuan, also referred to as the Renminbi
of the world’s highest rates of growth, averaging nearly 10% since the
Life expectancy: 71
late 1970s.
GDP per capita: US $4 700 Literacy percent: 86
Rapid industrial development has increased pollution – with China having four of the world’s 10 most polluted cities when it comes to air quality. The largest producer and consumer of coal, the country is turning away from coal toward clean hydroelectric resources, such as the Three Gorges Dam. In 2003, China became only the third nation (after Russia and the US) to launch a manned spaceflight. The country launched a lunar orbiter in 2007 with the possibility of a manned mission to the moon by 2020.
ECONOMY • Industry: Iron and steel, coal, machine building, armaments, textiles and apparel, petroleum, cement • Agriculture: rice, wheat, potatoes, sorghum, pork, fish • Exports: machinery and equipment, textiles and clothing, footwear, toys and sporting goods, mineral fuels. Source: National Geographic Atlas of the World, Eighth Edition
China is the world’s most populous country with more than 1,3 billion people – 20% of the Earth’s population. Occupying most of East Asia, it is the fourth-largest country in area (after Russia, Canada and the US). China’s geography is highly diverse, with hills, plains, and river deltas in the east and deserts, high plateaus and mountains in the west. Climate is equally varied, ranging from tropical in the south (Hainan) to subarctic in northeastern China (Manchuria). China’s geography causes an uneven population distribution; 94% live in the eastern third of the country. Shandong province, with its mild coastal climate, has more than 90 million people, but Tibet, with its harsh mountain plateau climate, has less than three million. The coastal regions are the most economically developed – acting as a magnet for an estimated 150 million Chinese migrants from the poor rural interior. This figure, from 2008, grows by an estimated 10 million Chinese each year. China has perhaps the world’s longest continuous civilization; for more than 40 centuries its people created a culture with strong philosophies, traditions and values. The start of the Han dynasty 2 200 years ago marked the rise of military power that created an empire – one that provided a golden age in art, politics and technology. Ethnic Chinese still refer to themselves as the “People of Han,” and Han Chinese constitute 92% of the country’s population. Successive dynasties developed a system of bureaucratic control that gave agrarian-based China an advantage over rivals. By 2030, it’s
PAGE 42 / BRICS SUMMIT PUBLICATION
EDITORIAL CONTRIBUTION
South Africa: Economic overview
W
hile much of the world
the JSE, is ranked among the top 20 in the
• electricity and water: 2,6%
staggered in the wake of the
world in terms of size.
• construction: 3,9% • wholesale, retail and motor trade: 16,2%
global financial meltdown, South Africa has managed to
Diversity and growth
stay on its feet – largely due
South Africa’s success in reforming its
• finance, real estate and business services: 21,2%
economic policies is probably best reflected
• government services: 16,7%
by its gross domestic product (GDP) figures,
• personal services: 5,9%.
to its prudent fiscal and monetary policies.
• transport, storage and communications: 9%
The country is politically stable and has a well-
which reflected an unprecedented 62 quarters
capitalised banking system, abundant natural
of uninterrupted economic growth between
resources, well-developed regulatory systems as
1993 and 2007, when GDP rose by 5,1%. With
well as research and development capabilities,
South Africa’s increased integration into the
and an established manufacturing base.
global market, there was no escaping the
The country’s outlook is affected both by
impact of the 2008-09 global economic crisis,
national concerns, such as unrest in and
and GDP contracted to 3,1%.
pressure on the mining industry, as well as
Ranked by the World Bank as an “upper
* Note: Percentages based on 2012 GDP data from Statistics SA.
international sluggishness, with Europe as one
middle-income country”, South Africa is the largest economy in Africa – and it remains rich
While the economy continues to grow – driven
with promise.
largely by domestic consumption – growth is
of South Africa’s chief export destinations.
at a slower rate than previously forecast. It
However, trade and industrial policies
With a world-class and progressive legal
is projected to grow at 2,7% in 2013; 3,5% in
encourage local firms to explore new areas of
framework, South African legislation
2014; and 3,8% in 2015.
growth based on improved competitiveness. China, India and Brazil offer significant
governing commerce, labour and maritime issues is particularly strong, and laws on
According to figures from the National
opportunities. Infrastructure, mining, finance
competition policy, copyright, patents,
Treasury, total government spending will reach
and retail developments across Africa are
trademarks and disputes conform to
R1,1 trillion in 2013. This represents a doubling
helping to fuel a growth trajectory in which
international norms and standards. The
in expenditure since 2002/03 in real terms.
South Africa can participate.
country’s modern infrastructure supports the
To ensure that there is a similar improvement
efficient distribution of goods throughout the
in service-delivery outcomes, the Government
Challenges
southern African region.
is putting in place measures to strengthen the
As the National Treasury is at pains to point
efficiency of public spending and to root out
out, development is not just the pursuit
corruption.
of growth – it is also about creating a
The economy has a marked duality, with a
more equitable future. The South African
sophisticated financial and industrial economy having grown alongside an underdeveloped
Under its inflation-targeting policy,
Government is determined to address its key
informal economy. It is this “second economy”
implemented by the South African Reserve
challenges through the economic integration
which presents both potential and a
Bank, prices have been fairly steady. In
of its previously disadvantaged majority.
developmental challenge.
January 2013, the annual consumer inflation
Unemployment, at a rate of 25%, remains the
rate was 5,4%, dipping from December 2012’s
most challenging of South Africa’s hurdles: it is
Positive outlook
5,7%. Stable and low inflation protects living
at the top of government priorities and at the
In its 2012-13 Global Competitiveness
standards, especially of working families and
heart of its economic policies.
Report, the World Economic Forum ranked
low-income households. The New Growth Plan (NGP), launched in
South Africa second in the world for the accountability of its private institutions, and
South Africa has a diverse economy, with
November 2010, builds on plans to restructure
third for its financial market development,
key sectors roughly contributing to GDP* as
the economy to ensure more inclusive and
“indicating high confidence in South Africa’s
follows:
sustainable growth – and sets a target of
financial markets at a time when trust is
• agriculture: 2,2%
creating five million new jobs by 2020.
returning only slowly in many other parts of
• mining: 10%
The road map to do this is provided by the
the world”. The country’s securities exchange,
• manufacturing: 12,3%
Industrial Policy Action Plan, which proposes
Brics Summit publication / PAGE 43
EDITORIAL CONTRIBUTION
multisectoral interventions across agriculture,
Green economy
Infrastructure
mining, manufacturing, tourism and other high-
One of the most important elements of the
Over the past decade, substantial increases
level services to create substantial employment.
NGP is a green economy, and the potential the
in government social service spending have
creation of a lower-carbon economy has as a
helped reduce poverty, but now the Government
South Africa’s dream of growing an inclusive
potential job generator as well as a spur for
has begun to place a greater emphasis on
economy by drawing on the energies of its people
industrial development.
infrastructure, employment and economic growth.
President Jacob Zuma has committed South
In a massive public-sector investment, South
Africa to slowing its growth in greenhouse
Africa has spent R642 billion on infrastructure
The proposed interventions aim to eliminate
gas emissions by 34% in 2020, and by 42%
development in the past three years – and
poverty and reduce inequality by 2030 by
by 2025. By May 2012, the Government had
plans to spend more than R827 billion over the
expanding economic opportunity for all by:
approved 19 wind, solar and hydropower
next three years to improve access to export
• investing in and improving infrastructure, as
proposals worth R73 million to help boost
markets and reduce costs in the economy.
is given voice through the National Development Plan 2030, launched in August 2012.
well as supporting industries such as mining
clean energy. Money will be spent on improving the energy
and agriculture • diversifying exports
In 2011, the Government entered into the
sector to double electricity generation,
• strengthening links to faster-growing economies
Green Economic Accord, which aims to create
on transport and logistics, hospitals and
• enacting reforms to lower the cost of doing
300 000 jobs in the next 10 years through
clinics, and on education infrastructure as an
investment in the green economy. In 2012,
investment in human capital.
business • reducing constraints to growth in various sectors • moving to more efficient and climate-friendly production systems • encouraging entrepreneurship and innovation.
PAGE 44 / Brics Summit publication
National Treasury allocated R800 million over two years to the Green Fund, which aims to
Investors
provide finance for high-quality, high-impact,
The overall investment environment remains
job-creating green economy projects around
encouraging. A G20 country, South Africa is
the country.
considered a low-risk investment destination
EDITORIAL CONTRIBUTION
for investors looking for a foothold into Africa.
the country’s imports. Other imports include
because of subdued growth prospects, which
As the continent’s largest African investor,
automobiles, chemicals, manufactured goods
it believed would affect public spending and
South Africa sends more than 25% of its
and petroleum.
exacerbate social and political tensions.
manufactured products into the continent. Ratings
Fitch has the country on a stable outlook, and
Through investment incentives and industrial
South Africa is the highest-ranked African country
acknowledges South Africa’s sound banking
financing interventions, the Government
and third-placed among the BRICS economies in
system and its “deep local bond market”. The
actively seeks to encourage commercial activity
the World Economic Forum’s (WEF) 2012 Global
country also outscores the BBB range median on
and attract foreign capital. South Africa earned
Competitiveness Index, ranking 52nd out of 144
all six of the World Bank’s governance indicators.
around R42 billion in foreign direct investment
countries surveyed while placing third overall for
in 2011, which was more than four times the
financial market development.
Unrest in the mining sector also led to downgrades late in 2012 from Moody’s (Baa1)
amount in 2010. South Africa is ranked 35th out of 183
and Standard & Poor’s (BBB).
Principal international trading partners of South
countries for ease of doing business according
Africa (besides other African countries) include:
to Doing Business 2012, a joint publication of
In response to the rating agencies, National
China, the United States, Germany, Japan and
the World Bank and the International Finance
Treasury has emphasised the resilient nature
the United Kingdom.
Corporation.
of its fiscal policy, and its disciplined spending,
Chief exports are metals and minerals.
In January 2013, Fitch, the ratings agency, cut
and enhance the country’s productivity. It said
Machinery and transportation equipment
South Africa’s sovereign credit rating by one
it was working with all parties to address the
make up more than one-third of the value of
notch to BBB. It said it had revised its outlook
issues around the strikes.
which is focussed on infrastructure to support
Brics Summit publication / PAGE 45
EDITORIAL CONTRIBUTION
BRICS – Why South Africa’s
citizens should care
BY MILLER MATOLA, CEO OF BRAND SOUTH AFRICA
T
he hosting of the fifth BRICS
should they care about this global gathering
South Africa has the opportunity to learn
Summit ia a historic moment in the
here in our country, or indeed feel it has any
valuable lessons from the successful examples
grouping’s history. It will represent
actual relevance to their lives?
of nation-building on the part of Brazil, India, Russia and China. Each of these countries was a
the first full cycle of global The bottom line is that everyone should care,
member of the BRIC grouping for 10 years prior
of this powerful group of leading emerging
that is if they have an interest in South Africa’s
to South Africa joining in 2011 and expanding
economies in the world, namely Brazil,
future and its cementing of an increasingly
the group to BRICS as it is known today. Each
Russia, India, China and South Africa. Once
more important strategic role on the global
country has reaped considerable rewards in
again, the BRICS Summit will seek to explore
economic stage.
terms of economic growth and prosperity.
gatherings since the formation
South Africa can look to replicate what has
areas of common ground for each of these major economies, providing an opportunity
Simply put, BRICS is a highly influential and
worked for its fellow BRICS members in terms
to identify new business and economic
powerful club that South Africa should not only
of positioning the country to potential global
cooperation opportunities, while at the same
want to belong to, but which also provides an
investors, strategic partners and visitors – all of
creating a platform to work
unprecedented opportunity for the country
which means new business opportunities, new
together to achieve peace, security,
to maximise the vast potential benefits that
foreign investment, much-needed new jobs, and
development and cooperation for a more
come from being a member. It is an enviable
ultimately economic growth.
equitable and fair world.
position to be in from a nation brand-building perspective, but for ordinary citizens it means
There are definite parallels between South
But, in the current challenging economic
the potential for exponential growth if the
Africa and the other BRICS countries in
environment, when ordinary South African
examples of the other BRICS member countries
terms of its economic growth potential – it
citizens are finding the going tough, why
are to be followed.
simply has to be harnessed, something these
PAGE 46 / BRICS SUMMIT PUBLICATION
EDITORIAL CONTRIBUTION
other countries have managed to achieve.
countries’ membership of BRICS because they
number one in the world for the strength of
If one looks at the example of Brazil, its
can see it ultimately and tangibly benefits
its auditing and reporting standards, number
economy only really started to flourish with
their lives and the lives of their children in
one in the world for the regulation of the
the growth of the private sector and the
the future.
Johannesburg Stock Exchange, second in the world for the soundness of our banks
creation of a genuine entrepreneurial culture in the country. As a result, the middle class
So, what in real terms does membership of
and the efficacy of our corporate boards,
expanded and their powerful purchasing
BRICS mean to South Africa and its citizens
and number four in the world in our financial
potential was harnessed for the benefit of all
and how can the country reap similar tangible
market development. Such ratings are key
sectors of society, creating jobs, stimulating
benefits in the short to medium term? Our
to stimulating the necessary global investor
new businesses and opening up new
country’s key advantage within the BRICS
confidence that is critical to South Africa’s
investment opportunities. Global investors
grouping relates to our mineral wealth – we
future economic growth and sends a positive
began to look at Brazil with new eyes as they
are the largest producer in the world of
signal to our critically important fellow BRICS
saw the opportunity to pursue viable new
platinum, chrome, vanadium and manganese.
members that we are open for business.
business ventures relating to infrastructure
We are the third-largest gold-mining country
This provides another tangible example of
development, retail, and other key business
in the world, and we have a wealth of mining
why South Africans should care about our
sectors. The country’s marketplace opened
and mining-related industry professional
membership of BRICS.
up for the supply of new global products and
services expertise, all of which is needed
services, not just creating new and much–
to support the BRICS resource pool in the
Prior to our membership, South Africa’s export
needed investor interest, but also stimulating
global marketplace. The insatiable demand for
trade with BRICS countries represented just
new jobs and business opportunities for
such commodities from the BRICS countries
6,2% of total exports – in 2011, the year of
ordinary citizens. Brazil’s subsequent
themselves provides a critical source of
South Africa’s BRICS membership entry, this
meteoric rise on the global economic
economic growth for South Africa in the
figure grew to 16,8%. In 2011 alone, South
stage was stimulated by this economic
future. As a result, South Africa is investing
Africa’s trade with BRICS countries grew by a
growth strategy.
in a major infrastructure development
staggering 29% – it continues to grow today
programme to improve its railways, ports
and will be at the forefront of our economic
Similarly in India, the country is currently
and fuel pipelines, recognising that such
growth into the future.
experiencing a period of unprecedented
investment is critical to unlocking the future
economic growth with foreign investment
business potential of its vast mineral wealth.
South African citizens need to recognise and
and joint venture partnerships in such fields
This in turn means jobs for ordinary South
appreciate that if the country is to enter a new
as telecommunications and IT helping to
Africans and the opportunity for a better
era of positive economic growth and pursue
position the country at the forefront of
quality of life overall.
a path that allows it to fulfil its undoubted potential, ultimately creating much-needed
technology hubs around the world. Such positioning and investor confidence is
But it is not just in the field of minerals, natural
jobs and the opportunity for a better life
attracting continuing business and financial
resources and infrastructure development that
for all citizens, membership of BRICS is key.
support into the country, together with major
membership of the BRICS grouping brings
This grouping represents the most powerful
global retail and business brands, all looking
new economic development opportunities
emerging economies in the world and provides
to be part of this economic success story.
for the country. South Africa’s reputation for
unprecedented opportunities for South Africa
Both Brazil and India’s citizens recognise
the sophistication of its financial market
to maximise new business, trade and political
that belonging to the BRICS grouping of
development and the depth of its financial
links in its capacity as the newest member
emerging market economies is critical to their
and professional services expertise make
of this club. South Africa’s citizens need to
countries’ economic success and reputation in
it a preferred business partner for other
genuinely care that we are being embraced
the global marketplace. They recognise that
BRICS country members. This competitive
by BRICS as it represents a powerful new
it helps to stimulate investment, create new
edge in the global marketplace was recently
pathway to stimulating the economic growth
business opportunities and valuable jobs, all
recognised by the prestigious World
that we so badly need if we are to fulfil the
of which contribute to a better quality of life
Economic Forum’s Global Competitive Index
aspirations and dreams of our citizens for a
for ordinary citizens. They care about their
survey for 2011/12. It ranked South Africa
better life for all.
BRICS SUMMIT PUBLICATION / PAGE 47
EDITORIAL CONTRIBUTION
South Africa’s 2013/14 Budget summary
T
he 2013/14 Budget read by the South African Minister of Finance on 27 February contains relatively fewer tax proposals than prior years. However, some of the proposals are quite far-reaching, particularly relating to trusts and corporate gearing. In this brief analysis, we highlight some of the key proposals for tax law changes. Corporate tax • There is no change proposed to the current rates of corporate tax or dividend tax. • Gearing continues to receive detailed attention and three measures are proposed to preclude debt eroding the tax base in certain circumstances, namely: - Re-characterisation of debt instruments as shares in certain circumstances, particularly where they do not have a realistic possibility of being repaid in 30 years, or if convertible into shares at the request of the issuer. - Excessive debt issued to connected persons if the creditor is exempt from tax on the interest. - Acquisition debt used in corporate restructuring (currently regulated by a discretionary regime [section 23K]). It is proposed to replace this with a new regime where interest on “excessive debt” will be allowed to roll over for up to five years. • Certain tax incentives are proposed to be established in certain special economic zones, including: - a 15% corporate tax rate - an employment incentive for workers earning less than R60 000 per annum - an accelerated depreciation allowance for buildings similar to the Urban Development Zone programme • Donations in excess of 10% of taxable income given to public benefit organisations (PBOs) in certain areas are permitted to be rolled over as allowable deductions in subsequent years; • Attention will be given to the rules dealing with share cross issues. Recognition has been given to the fact that there are difficulties with the current anti-avoidance legislation. • Further attention will be given to the mark-to-market taxation regime, which was introduced in 2012, but the implementation of which was deferred. Further refinements will include extending the covered persons and rules to prevent artificial losses from dividend transactions, among others. • The securities tax exemption for certain financial intermediaries is to be extended to maintain a level playing field;
PAGE 48 / BRICS SUMMIT PUBLICATION
• The cost price of trading stock will in future automatically conform to the International Financial Reporting Standards valuation without the need for approval from the South African Revenue Service. • The criteria for eligibility for the research and development incentive are to be adjusted to eliminate alleged misuse. • Dividend cessions and manufactured dividends continue to receive attention. Under consideration is a single unified treatment both for dividend cessions and manufactured dividends and anti-avoidance rules to eliminate shifting of income from taxable to exempt parties. • Corporate restructuring will continue to receive attention both in relation to on-shore and off-shore reorganisations. Individual and employment tax The following individual and employees’ tax points are of interest: • The top marginal rate for individual taxpayers has remained at 40%. • Fringe benefits tax relief is to be provided where low-cost employer provided housing is transferred to employees at below market value. • Medical tax credits will increase marginally and in line with annual adjustments. • Monetary thresholds for exempt bursaries given to employees’ relatives will be increased. • Individuals whose taxable income is from one employer and is below R250 000 a year are not required to submit income tax returns. • Tax-preferred savings and investment accounts will be implemented by April 2015. Returns and withdrawals from these accounts will be exempt from tax. The account will have an initial contribution limit of R30 000 and a lifetime limit of R500 000. These limits will allow for inflationary adjustments. • The deductibility of contributions to pension, retirement annuity and provident funds and employer contributions that constitute fringe benefits is set at 27,5% of the greater of remuneration or taxable income, subject to an annual cap of R350 000. • Contributions to provident funds will be tax deductible, with a view to harmonise the tax treatment of contributions to pension, retirement annuity and provident funds. Future contributions to provident funds will also be subject to the same annuitisation requirements as are applicable to pension and provident funds. • A youth employment tax incentive as well as a tax incentive for employees in special economic zones will be introduced.
• Some further relief on donations to PBOs is proposed. • A special dispensation is proposed to address possible instances of double taxation in share schemes and the deductibility of employer contributions to fund these schemes will be examined. • All non-retirement fund disability and income protection policies regardless of whether they compensate employees for the loss of future income or the loss of personal capital will be uniformly treated for tax purposes, i.e. contributions will not be deductible for tax purposes, but payouts will be exempt from tax. Taxation of trusts Important measures are proposed dealing with the income tax and (in due course) estate duty treatment of trusts. These include the following: • Discretionary trusts will no longer act as flow through vehicles and instead will be taxed at a trust level (i.e. as an entity) with distributions acting as deductible payments to the extent of current taxable income. Tax-free distributions to beneficiaries will be allowed except where they give rise to deductible payments (i.e. there appears to be a symmetry principle). • Trading trusts will also be taxable at the entity level with distributions being deductible to the extent of current taxable income. A trading trust according to the proposal will be one which either conducts a trade or one in which beneficial ownership is freely transferable by beneficiaries. • Distributions from “offshore foundations” will be treated as ordinary revenue. • Concern was expressed regarding the use of trusts to avoid estate duty (which is a longstanding issue), but no further details were provided. The concern is surprising given indicators in previous years that estate duty was on the way out. Property • The real estate investment trust (REIT) tax regime is to be extended: - Currently, a REIT is a listed company or trust that invests in immovable property, receives income from rental and distributes it to investors. A REIT may deduct such distributions if it resides in South Africa and if at least 75% of its gross income is rental income. - It is proposed to extend this regime to unlisted REITs once they are subject to similar regulation to listed REITs. This will be phased in initially to wholly owned entities of private and government pension funds and of long-term insurers.
EDITORIAL CONTRIBUTION
- REIT tax relief will also be extended to other real estate entities if they become subject to property syndication regulation. • The current regime for tax depreciation of immovable property is to be extended to include property which is within the “possession and use” of the taxpayer (e.g. leasehold improvement) so that the ownership requirement will be eliminated. • A tax incentive is under consideration for construction of new housing stock for sale below R300 000.00 per dwelling. Hedge funds • These will fall under collective investment scheme legislation and be regulated accordingly. They will be taxed similarly to other collective investment schemes and unit holders will be required to treat their earnings as ordinary revenue when realised. A similar regime is being considered for interest income funds. International/cross-border tax and Excon • It is proposed that the cross-border withholding regime on interest and royalties be extended to cross-border service fees (subject to treaty relief). All three sets of withholding regimes, namely interest, royalties (which are currently subject to withholding) and service fees will become effective from 1 March 2014. • The deduction of expenditure based on an accrual will be deferred until actual payment, in the case of a cross-border payment between connected persons. • Anomalies continue to receive consideration, including: - complexities associated with the calculation of the acceptably taxed exemption - the threshold for the participation exemption - transfer pricing requirements in management activities for the benefit of foreign branches - headquarter company relief to be refined to make it more effective and easier to understand • Listed South African multinationals will be allowed to treat a single local subsidiary as a non-resident company for exchange control purposes so that treasury operations can remain within South Africa rather than offshore. In addition, these entities may use their foreign functional currency rather than Rand as the starting point for tax calculation. • In relation to controlled foreign company activities, the imputation system will be clarified further. Issues mentioned include: - active offshore research and development activities - international shipping activities. - international pipelines - commodity hedges associated with active operations - intra-controlled foreign company insurance premiums • The exemption from tax on a foreign source of income if subject to foreign tax will be
removed in relation to initial copyright authors. • Currency taxation rules are to be simplified in favour of a “more practical approach”. A longer term shift is being considered towards an IFRS-based approach.
-
-
INDIRECT TAXES - Carbon tax • A carbon tax of R120 per ton of CO 2 will be imposed from 1 January 2015, increasing by 10% per annum. • The tax for passenger vehicles will increase to R90 for every gram/km emissions in excess of 120 gCO 2/km and for double cab vehicles to R125 for every gram/km in excess of 175 gCO2/km, effective from 1 April 2013. • The certified emission reductions tax incentive is extended to 31 December 2020.
- •
•
Transfer duty • No changes are proposed to transfer duty.
-
Fuel levies • The general fuel levy on petrol and diesel will increase by 22,5c/l from 3 April 2012 and the Road Accident Fund levy will increase by 8c/l. • The general fuel levy already includes a new multiproduct pipeline levy (7,5c/l) that will be phased out on 2 April 2013. The net increase in the general fuel levy on 3 April 2013 will therefore be only 15c/l and not the full 22,5c/l. The demand side levy on 95 octane petrol sold inland will be increased later this year.
-
Biofuels production incentive • The cost of the incentive will be 3,5c/l to 4c/l of petrol or diesel, recovered through a levy included in the monthly price determination. Plastic bag and incandescent light bulb levies • The plastic bag levy increases from 4c to 6c per bag from 1 April 2013 and the levy on incandescent light bulbs from R3 to R4 from 1 April 2013. Value Added Tax (VAT) • The VAT rate remains unchanged at 14%. • The following VAT legislation amendments are proposed: - all foreign businesses supplying e-books, music and other digital goods or services in South Africa will be required to register for VAT in South Africa. • Other proposed VAT amendments that are under consideration include: - the VAT treatment of the surrender of goods under the National Credit Act will be brought in line with that of the repossession of goods under an instalment credit agreement - the special time of supply rules between connected persons where the input and output tax is accounted for in the same tax period will be reviewed - where tax invoices are issued in foreign currency, it is proposed that the supplier uses the rate of conversion agreed between
the parties, or if no rate was agreed, the spot rate on the date of the supply a potential mismatch between the output tax and input tax treatment on conversion of a share block scheme to sectional title will be removed a home-owners association will be treated the same for VAT as a sectional title body corporate VAT relief will be provided for goods destroyed, damaged or abandoned on the same basis as that provided under the Customs Act for these goods when they are entered for home consumption the VAT treatment of all pooling arrangements will be reviewed. A national gambling tax at the rate of 1% of gross gambling revenue will be implemented by the close of 2013 (in addition to provincial rates). The following research projects will also be undertaken: a review of the VAT treatment of financial services and VAT apportionment within the financial sector re-evaluation of the application of the default turnover based method of apportionment for the non-financial sector.
Mining • An exemption will be introduced for mining de-watering associations which restore water levels adversely impacted by mining in a manner similar to a mining rehabilitation fund. This is under consideration. Excise duties on tobacco and alcohol • The excise duties on tobacco products, wine, clear beer and spirits are determined in accordance with a targeted total tax burden (excise duties plus VAT) of 52, 23, 35, and 48% respectively. • The excise duties on tobacco products will increase by between 5.8 and 10%, and on alcoholic beverages by between5.7 and 10%. Excise duties of fruit fermented beverages • The structure of tariff heading 22.06 has been amended to align the excise duty provisions for fruit fermented beverages with the requirements of the Liquor Products Act. As a result, only products that are predominantly fruit fermented will be distinctly classified in this beverage category. • Fermented products that are not mainly derived from fruit will be included in the band for beverages that uses the highest excise rate that will be increased to the highest spirits rate in Budget 2014 to allow manufacturers time to comply. Ad valorem excise duties • Video recorders with eight or more input channels and a value for duty purposes exceeding R13 000, will be exempted from ad valorem excise duties with effect from 1 April 2013.
Edward Nathan Sonnenbergs BRICS SUMMIT PUBLICATION / PAGE 49
For more information contact Tamsin Freemantle +27 11 520 7725 | www.jse.co.za/brics | tamsinf@jse.co.za The JSE is one of the top 20 exchanges in the world in terms of market capitalisation and a member of the World Federation of Exchanges.
FOLLOW US ON TWITTER
JOIN US ON FACEBOOK
EDITORIAL CONTRIBUTION
BRICS:
Promoting investment potential BY NICKY NEWTON-KING, CEO OF JSE LTD
O
ver the last decade, the term BRICS has come to symbolise the
for the creation of derivatives, exchange–traded products and other financial
growing importance of the world’s largest emerging economies
products. To be called BRICSMART products, these would be listed on the
and their potential impact on the global economic world order.
respective countries’ exchanges and be traded in the local currencies.
With a large share of the world’s population and huge potential for growth, these economies are becoming increasingly attractive
This development follows on from the first phase of the initiative, which saw the
for global investors. In 2013, according to the International Monetary Fund (IMF),
exchanges cross-list their benchmark equity index derivatives on the various
advanced economies will grow by 1,5% compared to the 5,6 % growth expected
exchanges this past March. This meant that for the first time, investors could
of emerging market economies, of which the BRICS forms a large share.
get exposure to other emerging markets in their local currency.
In a move to further enhance investment in the BRICS nations, in October 2011
Apart from cross-listing products, the BRICS Alliance will be actively exploring
the various BRICS exchanges announced their intention to collaborate. This
other opportunities to promote greater development and understanding
milestone agreement formed the BRICS Alliance and brought together the
between the respective markets. Despite the increased investor appetite for
BM&FBOVESPA from Brazil, the Russian MICEX RTS Group, the BSE Ltd from
emerging market exposure, there is still less understanding of these regions
India, Hong Kong Exchanges and Clearing Limited (HKEx) – as the initial China
and the listed companies within these markets. Much of the work of the BRICS
representative – and the JSE from South Africa. It is important to note that this
Alliance will focus on creating a greater awareness of the investment potential
was not the creation of a platform for the sharing of ideas, but rather a working
within each country.
group tasked with a series of goals to accomplish. One of these goals is the launch of a single index giving investors exposure to all five markets. To be launched in early 2013, this composite index will allow
BRICS SUMMIT PUBLICATION / PAGE 51
EDITORIAL CONTRIBUTION
BRICS
Development Bank
to be the centrepiece of the summit
T
he proposed BRICS Development Bank provides a platform
possibility of having a common currency mainly for trade purposes.
for the economic grouping to challenge the dominance of
The feasibility report has been jointly prepared by the five nations
the United States Dollar in global trade while asserting the
after the idea was discussed at the last BRICS Summit, which was
growing influence of its member countries in the global
held in New Delhi in March last year.
economy, according to Chris Hart, the Chief Strategist at
Investment Solutions.
With Africa said to be suffering from infrastructure funding gaps of up to $90billion a year, it’s easy to see the need for a bank of this
“The establishment of this bank could very well be the platform to
nature. Hart says he is, however, worried about the existing competing
challenge the dominance of the Dollar in global trade,” says Hart. He
interests between these nations.
says although this might set a scene for potential conflict with the US, a move of this nature would see BRICS having considerable influence
However, the disparate interests don’t mean it won’t work out
globally – which is what they should strive to achieve. The BRICS
particularly if you look at the likes of the European Union, because
member countries have proposed the establishment of a development
they know their cause – economic growth and sustainability – they
bank to mobilise funding for infrastructure and sustainable
look past their political indifferences, adds Hart.
development projects in the BRICS countries and other emerging economies and developing countries.
BRICS is expected to still grow beyond these five nations, and the sooner they find common interests and establish themselves the
They also want it to play a key role in promoting intra-BRICS investment,
better. Countries such as Nigeria, Mexico, Indonesia and Vietnam,
economic growth and intra-BRICS trade, which currently exceeds
which are all economically dynamic and populous, are all working
US$230 billion and is projected to exceed US$500 billion by 2015.
hard to be part of BRICS.
Hart says it goes without saying that the much-anticipated launch of the
The summit will also focus on funding for African infrastructure and
Development Bank will be the main draw card at this year’s BRICS Summit.
plans for a business council, which will serve as a think-tank. Hart says he also expects some trade agreements which should see a removal
The summit brings together Brazil, Russia, India, China and South
of trade barriers between these nations.
Africa to discuss the feasibility of establishing the bank and also the
“With Africa said to be suffering from infrastructure funding gaps of up to $90 billion a year, it’s easy to see the need for a bank of this nature.” PAGE 52 / BRICS SUMMIT PUBLICATION
Bank of China Johannesburg Branch Your Financial Partner of Choice in Sub-Saharan Africa
Rabat
Cairo
Abuja Accra Kampala Yaoundé Nairobi Luanda
Kitwe Lusaka Mauritius
Johannesburg Durban
Based in South Africa with business expansion to other African countries, Bank of China Johannesburg Branch has witnessed and participated into the rapid development of economic and trade exchanges between China and Africa. With advantages of BOC Group’s leading position in RMB business, global service network and experienced professional teams, Bank of China Johannesburg Branch, as leading bank of RMB business in Africa and prioritised Bank in regard to China-related business, is providing clients with comprehensive tailor-made RMB service solutions to support your economic and trade activities. Bank of China Johannesburg Branch is serving Sub-Saharan Africa from South Africa by consistently offering financial services of high quality and efficiency. The Branch will carry forward Bank of China’s outstanding century-long heritage to make renewed and larger contributions in enhancing Sino-Africa cooperation and mutual benefit.
www.boc.co.za Tel: + 27 11 520 9600
crc@boc.co.za trade@boc.co.za banking@boc.co.za
EDITORIAL CONTRIBUTION
Renminbi:
New choice for global trade and investment Bank of China, Your Premier Bank of Renminbi Services
C
• seize market opportunities early, increase
hina is the second-largest economy,
investment and settlement, offshore RMB bond
and the world’s largest exporter
investment and issuing, account financing,
profitability, enhance operational capacity and
and second-largest importer. Due
banknote wholesale and distribution, etc. the
improve the ability to operate globally.
to the continuous economic growth
Bank of China subsidiary in Russia has become the major Rouble-Renminbi market-maker in the
BOC kept its global growth plan on course
international trade and the relative stability of
local interbank foreign exchange market. BOC
and improved its worldwide customer services
Renminbi (RMB: official currency of People’s
Hong Kong Limited, BOC Macau branch, BOC
platform and capabilities. In 1993, the BOC
Republic of China, and the primary unit of the
Taiwan branch and BOC (Malaysia) Berhad have
became the first Chinese bank to open a
RMB is the Yuan) value, RMB is increasingly
obtained authorisation from local authorities to
subsidiary institution in Russia. Its Johannesburg
accepted across the world, offering a new
act as the RMB clearing bank in the region.
branch started operation in 2000, and BOC Brazil
of China, and the huge scale of
was established in 2009. BOC extension in India
choice for national governments and enterprises in risk mitigation.
On the business side, BOC provides integrated
will also come into existence in the near future.
RMB solutions for cross-border settlement, Till the end of 2012, the Bank of China had
financing, conversion, treasury operations,
As the first bank from mainland China in
established 613 overseas institutions in 35
investment and bonds, which helps:
South Africa, BOC Johannesburg branch has
countries and in regions of Hong Kong, Macau
• effectively mitigate exchange risk and reduce
consistently dedicated itself to enhancing the
and Taiwan. Within a complete system of cross-border and overseas Renminbi products,
exchange losses • enhance the functions of the overseas
influence of BOC in Africa during the past 12 years. Based in South Africa with business
BOC affiliates can provide central banks and
procurement platform, settlement platform as
expansion to more than 20 African countries,
financial institutions a wide array of Renminbi
well as trade and investment platform to optimise
the branch has witnessed and participated
products and auxiliary services, including
funds portfolio and reduce mismatch risk
into the rapid development of economic and
account opening, RMB clearing and settlement, funds allocation, onshore interbank bond market
PAGE 20 / Brics Summit publication
• cut financial costs using differences in interest rates and exchange rates across the border
trade exchanges between China and African countries.
EDITORIAL CONTRIBUTION
The client base of the Johannesburg the
Based in South Africa, the Johannesburg branch
Acting as BOC headquarters in Sub-Saharan Africa,
branch consists of customers from industries
has expanded its RMB services to more than 10
the Johannesburg branch, together with BOC
such as mining, financial institutions, importing
African countries, with the client base consisting
Zambia Ltd., BOC representative offices in Kenya,
and exporting, media, manufacturing, property
of customers from local enterprises, Chinese
Angola, and “China desks” in Ghana and Uganda,
development, as well as infrastructure, energy and
“going global” enterprises, financial institutions
are proactively supporting and enhancing the
power generation. Through providing financial
and overseas Chinese people. The branch
development of trading partnerships between China
and credit services with good competitiveness,
achieved rapid development in RMB business
and Africa.
Johannesburg branch has been playing an
volume increment, which is testimony to the fact
vigorous and proactive role in the economic
that there are vast opportunities for China and
After many years of stable development, the Bank
and trade development and financial exchanges
Africa’s economic trade cooperation and demand
of China Johannesburg branch has gained good
between China and African countries.
for RMB business. BOC Johannesburg branch has
reputation and special influence among Chinese
yielded remarkable achievements in the aspect of
“going global” enterprises and South African local
BOC Johannesburg branch can provide business
RMB business as:
enterprises. It is continuously providing financial
services in all the categories that commercial
• the first bank that offers RMB clearing in Africa
services of high quality and efficiency to clients,
banks offer, including corporate banking, personal
• performing the first US Dollar/Rand to RMB
and also making a significant contribution to South
banking and financial market services. Our major
African local social and economic development.
services are deposit, loan, trade finance, international trade settlement, RMB business, foreign exchange, treasury business, etc.
foreign exchange spot transaction/forward exchange contract in South Africa
• transacting the first RMB Bulk Salary Remittance in Africa • performing the first RMB investment
In the future, the Bank of China Johannesburg branch will serve Africa from South Africa through the BOC network of existing and upcoming
BOC Johannesburg branch is the leader in providing
transaction from South Africa on Mainland
affiliated institutions. The branch will carry forward
RMB services in Africa. RMB services consist of
China’s Interbank Bond Market
the BOC’s outstanding heritage to make renewed
deposit, loan, trade finance, international trade
• the first bank granted approval from South
settlement, financial planning, foreign exchange, bulk
African authorities for cross-border RMB
salary remittance, Internet banking, global credit line,
finance business under trade finance services in
RMB syndicated loan, cross-border RMB FDI & ODI, overseas RMB bonds issuance, etc. With BOCJHB, all
and larger contributions in enhancing Sino-Africa cooperation and mutual benefit.
local market • the First Bank that launched and provided
products and services available to other currencies
a RMB bilateral loan as a product in
also became applicable to RMB.
South Africa
RMB: New Choice Bank of China, Your Premier Bank of RMB Services.
www.boc.co.za
RMB Services with Bank of China Building on the century-long international experience, Bank of China’s cross-border Renminbi business reflects the world’s economic and financial needs. With its leading position at home and abroad, global clearing network, broad base of financial products and high level of professionalism, Bank of China can provide a comprehensive tailor-made cross-border and offshore Renminbi service solution to support your economic and trade activities around the world.
EDITORIAL CONTRIBUTION
Looking to the East to accelerate
economic growth and diversity in Africa
W
hile the Sino-Africa relationship is not a new agenda, modeling current business trends in Africa on Chinese standards can serve to boost economic development in Africa and strengthen financial links with the global economy. Dating back as far as the fifth century, when Zheng He, a Chinese explorer and diplomat made voyage to Africa, exchanging gifts from the Chinese emperor, including silk, pearl and porcelain in return for ivory, zebras and giraffe, a mutually beneficial relationship between China and Africa has existed. It was not until the mid-1970s that China made a firm reconnection with Africa in the building of a 1 860-km railway that lead to China becoming one of the main donors to Africa, where impressively, during the last decade, two-way trade between China and Africa has reached US$ 166 billion. This proves that the Sino-Africa relationship is no longer just an aspiration but concrete evidence of their cooperation in achieving economic advancement. Although China and Africa differ geographically, historically and culturally, over the years they have shared similar economic challenges, from imperialism, colonialism, liberation to radical social and economic transformation. Some argue that the foreign policy of China towards Africa is a form of neo-colonialism deviating from the Washington Consensus and of exploiting Africa’s natural resources. On the other hand, China’s non-interventionist approach has shown that a developing country, with the correct assistance, can formulate its own solutions to resolve economic and social challenges. As stated by American economist Jeffrey Sachs, “China gives fewer lectures and more practical help”. Besides, Chinese government relations with Africa are distinct and very different from those of the West, their foreign policies being based on five principles, namely: 1. mutual respect for each other’s territorial integrity and sovereignty
PAGE 56 / Brics Summit publication
2. mutual non-aggression 3. mutual non-interference in each other’s internal affairs 4. equality and mutual benefit 5. peaceful co-existence. China’s “Go Out and Economic Reform” policy encouraged and supported successful Chinese enterprises to expand their investments in Africa. The Chinese government also actively stimulated Chinese private entrepreneurs to start up businesses in Africa and introduced measures and mechanisms to assist their companies in engaging with African business leaders. Did you know? In the last 30 years, having implemented a highly successful reform and growth experience, the chinese gross domestic product maintains an average 10% increase per annum. Lending its support at the highest political level, China signed the Bilateral Investment Promotion and Protection agreements with over 30 African nations. In addition, China also signed the Avoidance of Double Tax Agreement with over 11 African nations, promoting effective bilateral trade between Africa and China. Furthermore, the Chinese Government aids investors by means of the Forum on China-Africa Cooperation (FOCAC), as well as by paying state visits to foreign African countries whereby negotiations concerning Chinese development assistance and investments can take place. The FOCAC thereby serves as a pragmatic platform, providing a framework to improve relations with Africa by facilitating multilateral dialogues between China’s and Africa’s heads of states, ministers, government officials and entrepreneurs. Since the establishment of FOCAC in 2000, significant achievements include: - The establishment of trade and economic cooperation zones in Africa in Mauritius, Nigeria, Egypt, Ethiopia, Zambia and Tanzania. - The formation of the US$ 5 billion China-Africa Development Fund in 2006, which encourages bilateral Africa-Sino development projects and
investments. Since the inception of the fund, more than 30 projects have been established in Africa in the agricultural, power and energy, construction material procurement, mining, manufacturing and logistics sectors. - The cancellation of all interest-free government loans due at the end of 2005 by the poorest and least developed countries in Africa. - A recent decision at the 2012 fifth FOCAC Summit in Beijing, where China pledged US$ 20 billion in credit over the next three years to African governments to support infrastructure, agriculture, manufacturing and the growth of small businesses. The Sino-Africa Partnership will speed up both economic and social development in Africa. However, Africa will need to improve and increase its capacity by addressing bottlenecks in service, improving infrastructure, training of skilled laborers, and providing access to finance. The lack of skilled workers will remain a critical factor in ensuring that Africa can operate and maintain the infrastructure that has been built by their development partners. While the demand for raw material and commodities continues to push up prices, Africa is in a strong position to negotiate with its trading partners to improve sustainable development and growth. Ultimately, it is incumbent upon African leaders to take ownership of the long-term development for their own countries,using their raw material resources wisely to improve the lives of their citizens. Without fundamental structural changes, growth and developmental goals will not be reached in keeping up with the United Nations millennium development goals for 2015. As pointed out by Duncan Green, head of research at the British aid organisation Oxfam, “Whatever role China ultimately plays, perhaps the most important element it introduces is competition. The West has for too long relied on one set of ideas aimed at fixing Africa’s problems.”
KENNY CHIU
General Manager: Business Development Edward Nathan Sonnenbergs China
EDITORIAL CONTRIBUTION
WNS acquires Fusion Outsourcing in a major new agreement
W
NS, a globally leading high-end business process solutions
Johann Kunz, Managing Director, Fusion Outsourcing commented:
provider listed on the New York Stock Exchange, acquires
“Fusion Outsourcing has established itself as a leading customer service
Fusion in an effort to expand its delivery footprint. WNS
specialist – both locally and globally. We are all excited to see the
has 25 delivery centres across seven international locations.
positive impact that WNS will have on our business; implementing its
Fusion’s rich talent and strong cultural work ethic will be
worldwide expertise and best practices to support Fusion’s ongoing
key to WNS’s growth strategy
expansion.”
Fusion Outsourcing announced its acquisition by leading global Business
Keshav R Murugesh, Group CEO, WNS Global Services, added: “Expanding
Process Outsourcing (BPO) company, WNS, on 21 June 2012. As part of the
our global delivery footprint and entering emerging growth markets are key
agreement, Fusion Outsourcing will operate as one of WNS’s international
pillars of our investment strategy. We believe that establishing operations in
delivery centres. It will benefit from expanded service offerings; access to
South Africa addresses both these objectives.
international best practices and expertise; new best-of-breed systems and processes; as well as support from other global teams.
WNS currently has several existing clients interested in services being delivered from South Africa to take advantage of the English-language
Following its launch in 2004, Fusion Outsourcing has experienced rapid
capabilities, rich talent and strong cultural work ethic. In the long term,
growth and is now one of South Africa’s leading BPO-providers, offering
we view this growing economy as an exciting end-market of global BPO
the complete suite of contact centres services to more than 16 customers.
services, especially in the areas of finance and accounting and insurance-
Listed on the New York Stock Exchange, with over 24 000 employees and
specific services. We are pleased to welcome the Fusion team into the
200 global clients (many on the Fortune 500), WNS will help drive the next
WNS family, and look forward to working together to take the company to
phase of Fusion’s growth.
greater heights.”
BRICS SUMMIT PUBLICATION / PAGE 57
EDITORIAL CONTRIBUTION
South Africa’s Department of Agriculture, Forestry and Fisheries (DAFF) offers
opportunities for investment T
he DAFF has made massive inroads
products were afforded an opportunity to
The first group of students will be awarded
in Brazil, Russia, India and China.
display their products and seek market share
their degrees during the second half
and buyers.
of 2013.
The South African Minister of In 2011, South Africa was invited to join the
SHORT-TERM COURSES
Tina Joemat-Pettersson, has dedicated
BRIC(S) countries. One of the outcomes of
The National Aquaculture Strategic
her term to the uplitment and support of
the BRICS Cooperatives Leadership Forum
Framework (NASF) and part of the
smallholder sectors and the development
was the signing of an Exclusive Agency
implementation of the South Africa China
of women and youth in agriculture, forestry
Agreement between Chongqing Agriculture
JWG Action Plan, the Aquaculture Human
and fisheries. To date, farmers have received
Products Group and the South African wine
Resource Development Plan, have been
assistance through being beneficiaries of
cooperatives for the supply of wine as well as
successfully implemented since 2006.
tractors, implements, seeds and fertilizer.
in the area of aquaculture products.
South Africa has sent a number of students
The Minister was named the 2011 Africa
In terms of agriculture cooperation, a Joint
Centre in Wuxi, for various short courses of
Minister of Agriculture, beating countless
Working Group (JWG) has been established
which Integrated fish farming dominates.
other ministers from the continent. In 2012,
between the Ministry of Agriculture, Forestry
Participants included farmers, technicians,
Minister Joemat-Pettersson was knighted by
and Fisheries and the Ministry of Agriculture
aquaculture managers and officials.
the French for her contribution to agriculture.
(MoA) at Director-General level. During the
Agriculture, Forestry and Fisheries,
to the Fresh Water Fisheries Research
JWG meeting, progress is discussed, new
During 2012, South Africa participated
The year 2013 marks the celebration of 15
areas of cooperation are agreed upon and
in the Aquaculture Extension System
years of diplomatic relations between South
relations are further strengthened.
Development and Management, short courses on aquaculture for developing countries,
Africa and China and it is envisaged that a number of events will be undertaken to mark
HUMAN RESOURCE DEVELOPMENT
courses on mariculture culture technology
this relationship. South African agriculture,
(CAPACITY-BUILDING) PROGRAMME
for developing countries, seminars on
through the Ministry of Agriculture, Forestry
Since the establishment of the JWG, a
management of China-aided agriculture
and Fisheries, enjoys bilateral relations with
Memorandum of Understanding (MoU)
technology demonstration centres and
the Chinese Ministry of Agriculture in two
between the DAFF and China Agriculture
seminars on aquaculture and technical
areas, namely agriculture cooperation and
University, Jilin University and Nanjing
extension for developing countries.
market access.
University was signed.
Taking a historical glance at the two country’s
South Africa has a total of 22 students
South African provinces have also taken full
relationship gives us an impression of how
studying full time in China for postgraduate
advantage of the programmes offered by
the relationship reached this epoch. In July
degrees (Masters and PhD) in various
China and the opportunities that exist therein.
2012, China hosted the Forum on China-
disciplines of agriculture and related fields.
The province of KwaZulu-Natal (KZN) in
Africa Cooperation (FOCAC) and as part
Upon finalisation of their studies, the acquired
South Africa signed a twinning agreement
of its activities undertaken by the Chinese
knowledge and skills will be applied and
with Fujian Province in May 2004, wherein
Government to promote value-added
contribute to the issues of food security,
agriculture was identified as an area for
products from Africa. A number of Chinese
poverty alleviation, job creation, research and
cooperation. The mushroom project was
importers of South African agricultural
development in South Africa.
initiated in January 2005 between the
TECHNICAL COOPERATION
PAGE 58 / BRICS SUMMIT PUBLICATION
EDITORIAL CONTRIBUTION
KZN and Fujian Agriculture and Forestry
some of the major cities in China, for example
The seminar afforded emerging exporters
University. This initiative is based on
Shanghai (which is considered the economic
an opportunity to learn about exporting
technical exchanges (training) as well as
hub of China), Beijing and other second-tier
processes as well as insight into the Russian
technology transfer (Juncao Technology),
cities. In addition to the wines, dry fruits
market. Thirty-seven South African companies
which has been adapted to the South
(raisins), Bokomo cereals, Ceres fruit juices,
across the spectrum, including agriculture,
African environment. This technology and its
rooibos tea, seafoods, protea flowers, citrus
participated.
methodology to produce mushrooms are also
and tablegrapes (through protocols) are also
applied in China, Papua New Guinea, Japan,
available in China.
The fifth ITI and World Cup Legacy Exhibition was held in Moscow from 2 to 7 December 2012
Brazil, Fiji, Iraq and Australia. RUSSIA
and, among others, 10 companies mainly from
INVESTMENT IN AGROPROCESSING
As one of the BRICS countries, Russia, with
the Western Cape and Mpumalanga promoted
The Comprehensive Strategic Partnership
a population of 143 million people, is one of
their agricultural products, ranging from
Agreement (CSPA), signed between South
the fastest-growing economies in the world
wines, exotic teas, macadamia nuts and luxury
Africa and China in 2010, created a platform
and offers opportunities for South Africa and
leather works.
for South Africa, through the Department
its companies. One thing is certain: a major
of Trade and Industry (dti), to organise and
competitive and massive agricultural power
A World Food Expo was held in Moscow
host expos in China. The dti expos are of
is emerging and the target set by the Russian
from 17 to 19 September 2012, attracting
multisectoral nature, but draw a sizeable
Federation could not be clearer: 20% of the
participants from Europe, South America
number of agricultural exhibitors, with
world market in the next 10 to 15 years.
and North Africa. Five South African companies, all from the citrus industry,
the wine sector having a strong presence.
participated in the programme.
The CSPA is seen as a means of further
The mandate and core business of the
strengthening the political, economic and
Sub-Programme: International Relations
technical exchanges between the two
and Trade is to “Coordinate and facilitate
At the ITAC 11 Session, South Africa and
countries.
the strengthening of international relations
Russia agreed to consider opportunities in
and trade through bilateral engagements,
the development of table-grape farming
In addition to the above, the dti has
negotiations, development and
and wine-making in the Russian Federation
participated in the following exhibitions: SIAL
implementation of appropriate policies
based on South African experience. Pursuant
and Food Hotel China (FHC) for a number
and programmes�.
to this agreed cooperation, a South African delegation comprising the Minister-
of years, thus creating a platform for South African agriculture producers seeking new
Trade and Investment South Africa (TISA)
Counsellor: Agricultural Affairs and the
markets for their products. What is evident
hosted the fourth Investment and Trade Initiative
Russian-based representative of the South
is that South African wines are available in
(ITI) Seminar in Moscow from 26 to 29 March 2012.
African Table-Grapes industry (SATGI) visited
BRICS SUMMIT PUBLICATION / PAGE 59
EDITORIAL CONTRIBUTION
the Krasnodar region from 29 to 31 January 2013
phytosanitary certificates for the export of
FISHERIES
to explore possibilities of technical collaboration
specific types of products between South
With the conclusion of ITAC 11, both parties
in increasing the production of table-grapes in the
Africa and the member states of the Customs
agreed to consider the text of the MoU on
region. Krasnodar is the main table grape-growing
Union, namely Russia, Kazakhstan and
cooperation in the field of fisheries, which
region in Russia, producing 50% of the 30 000
Belarus.
sought to set up a framework for cooperation in the various aspects of the fisheries sub-
tons harvested locally. The annual consumption of table-grapes in Russia is estimated at 300 000
The World Food Expo 2013 will be held in
tons and there is great potential to produce
Moscow from 16 to 19 September 2013. For
150 000 tons domestically.
the first time, South Africa will have a national
sector. The proposal is in its final stages. INDIA
pavilion. In conjunction with the dti, invites
The Ministry of Agriculture, Forestry and
The Russian delegation pointed out that a
have been sent to South African companies to
Fisheries of South Africa signed an MOU with
major constraint in increasing the production
participate. The Citrus Growers’ Association
the Indian Ministry of Agriculture on 4 June
level was the lack of modern packing and
of South Africa has already confirmed their
2010. The signing of the MoU was followed by
storage facilities. It was their view that, given
attendance.
the development of a Joint Action Plan: June 2011 – May 2013.
their experience, South African companies are well positioned to participate in the pilot
FORESTRY
project to build the first three modern cold
South Africa, together with 34 other
TRADE AND INVESTMENTS
storages at the production sites. The project
countries, participated in the 9th Junior
Work has begun in earnest to organise animal
will be funded by the Krasnodar Regional
Forestry Competition, which was held
and plant health certificates (sanitary and
Government. However, further construction
in Moscow on from 12 to 14 September
phytosanitary) for a number of South African
of cold storages will be undertaken by the
2012. Additionally, South Africa will send a
products to access the Indian market.
farmers themselves. A proposal in this regard
technical team during the first semester of
India is currently processing an animal health
has been sent to the Ambassador, DAFF and
2013 with the aim of receiving the Forestry
certificate, which will allow South African
SATGI for their consideration.
Action Plan that was developed at ITAC 10.
business people to export to India processed
The plan entails fire management, forest
hides and skins. The target market is TATA
Bilateral discussions are nearing conclusion
protection (pest and diseases) and exchange
car manufacturing company. In return, India
on the harmonisation of veterinary and
research programmes.
is making a request for an animal health
PAGE 60 / BRICS SUMMIT PUBLICATION
EDITORIAL CONTRIBUTION
certificate for the export of their water
as Salonika, which is in partnership with
• vaccine development
buffalos to South Africa. According to the
Landini in South Africa, has expressed a desire
• eco-technologies for smallholder farmers.
Department of Animal Husbandry, Dairying
to set up training centres in South Africa. In addition, the Chief Directorate responsible
and Fisheries, their documentation is on its Discussions have begun in earnest and
for Fisheries Development in South Africa had
AgriSETA will be brought on board in
proposed under the 2011 to 2013 Action Plan,
In addition to animal health certificates, South
facilitating the registration of the training
the training of six to 10 fisheries scientists in fish
Africa has already submitted requests for plant
programmes and identification of existing
health management. The office in New Delhi is
health certificates for mango fruit, persimmons,
centres in South Africa.
working with the Department of Agricultural
way to South Africa.
Research and Agricultural Education in developing
organic rooibos and oak liquid tannin. Another tractor and machinery company,
a schedule for training in fish health Management.
Once South Africa secures the plant health
Standard Cooperation, is looking for a distributor
The training will start in India before the end of
certificate, it will be easy to export the
in South Africa. Visits to their plant have
2013.
above-listed products to India. In return,
been scheduled. The company has also been
India has also submitted a request for a
encouraged to display its products during the
The DAFF is well poised to curb one of
plant health certificate for the export of
upcoming NAMPO show in May 2013.
the most urgent issues facing South Africa – household food insecurity. The Minister
mangoes to South Africa. TRAINING AND TECHNICAL COOPERATION
of Agriculture, Forestry and Fisheries has
The Forum of Indian Food Importers has
The Agricultural Research Council (ARC) and
committed herself to working with commercial
expressed an interest to import hake and
Indian Council of Agricultural Research (ICAR)
and smallholder farmers and youth to find
rock lobster from South Africa. We are
are working towards signing an agreement
diversity food production while providing
currently engaging the Department of
before the end of 2013. The areas of focus
opportunities to these groups.
Animal Husbandry, Dairying and Fisheries to
proposed by the ARC are:
negotiate a Trade Protocol on Fisheries. INVESTMENTS A tractor and farm machinery company known
• training of scientists at MSc and PhD level • post-doctoral Research Appointments
For more information on the work of the
• research collaboration on disease
department, please visit www.daff.gov.za.
management
BRICS SUMMIT PUBLICATION / PAGE 61
EDITORIAL CONTRIBUTION
SIZAGRAPH:
A leader in South Africa’s drive for localisation in the renewable energy sector
W
e often hear about the
socio-economic development criteria and
of the company, namely: Dr Sebiletso
job-building benefits of
local content as required in terms of South
Mokone-Matabane (Chairperson), Adv Karen
renewable energy when
African legislation, which is set to rise to
Foulkes-Jones SC (vice-Chairperson),
it draws manufacturers
60% by Bid Submission 4 of the Renewable
Dr Namane Magau, Mrs Nomusa Mufamadi,
and developers to local
Energy Independent Power Producer
Mrs Elizabeth Busiswe Thage, Mr Richard
communities. Less talked about are those
Programme (REIPPP) in 2014 (calculated
Johannisen and Mr Muneeb Gambeno. With
who arrive well before the shovels, factories
in accordance with the criteria as set out
six of the seven directors and shareholders
and jobs. These are the green energy
by South Africa’s Department of Trade and
previously disadvantaged South Africans,
entrepreneurs; the creative thinkers and risk
Industry). Compliance with local content
and five of the seven directors and
takers involved in the rise of clean energy
requirements will ensure that local industry
shareholders being South African women;
ventures in South Africa. We are talking about
obtains a substantial share of the investment
Sizagraph exceeds the guidelines set by
the individuals behind Sizagraph (Pty) Ltd.
coupled with creation of meaningful jobs and
South Africa’s BBBEE legislation. Sizagraph’s
skill transfer. The solar photovoltaic assembly
directors have proven track records in
Headquartered in Johannesburg, South Africa,
plant will create a minimum of 50 full-time
the international business community, an
Sizagraph is on its way to becoming a leading
South African employment opportunities
attribute which will ensure the company’s
BBBEE participant in the South African
and a skills development programme is to be
success in this highly competitive sector.
renewable energy sector. Sizagraph realises
instituted to ensure the transfer of skills to
that for South Africa to win the confidence of
South Africans in relation to the technology
foreign investors as a viable market to invest
being utilised. The local content specifications
in, domestic companies need to lead the way
stipulated in terms of the REIPPP will be
and show trust in the economy.
adhered to (which forms an integral part of the 2011 IRP) and Sizagraph is currently
Sizagraph and ZNShine PV-Tech Co. Ltd
working with local consultants to achieve
(“ZNShine”, headquartered in China), have
maximum results (in terms of the Department
formed an incorporated joint venture, namely
of Energy [DoE] requirements for both
ZNShine Solar SA (Pty) Ltd (“ZNShine
material local content and socio-economic
Solar SA”). ZNShine Solar SA intends to
development in terms of BEE legislation).
become one of the first relevant players in
Solar photovoltaic developers and investors
South Africa in terms of the assembly of
will take a keen interest in ZNShine Solar
photovoltaic panels to serve the newborn
SA’s solar photovoltaic panels due to its
solar photovoltaic industry. The joint venture
compliance with the above-mentioned criteria
is structured with ZNShine PV-Tech Co. Ltd
as well its very competitive value proposition.
(China) holding 51% equity and Sizagraph holding 49% equity in the 100MW solar
As Dr Sebiletso Mokone-Matabane
photo-voltaic panel assembly plant being
(chairperson of Sizagraph) so clearly states,
established in Cape Town, South Africa.
“Sizagraph not only wants to comply with
Production is expected to start by the third
DoE local content and socio-economic
quarter of 2013. The solar photovoltaic panel
development criteria, it wants to exceed it!”
assembly plant is being established in line
Sizagraph comprises five women and two
with the growing need for conformance with
men who are the shareholders and directors
PAGE 64 / BRICS SUMMIT PUBLICATION
Dr Sebiletso Mokone-Matabane Chairperson of Sizagraph
EDITORIAL CONTRIBUTION
ZNShine (based in Jintan, Jiangsu Province,
Sizagraph wishes to extend its continued
when you want to accomplish something
China), a fully vertically integrated
gratitude to Imperial Cygnus Investments
compelling”.
manufacturer, is one of the world’s leading
(Pty) Ltd (“ICI”), a Johannesburg-based
manufacturers of ingots, wafers, solar panels,
renewable energy consultancy, which has
solar lights and solar systems. With annual
been active in the South African renewable
turnovers in excess of US$ 200 million, 100 000
energy sector since 2010. ICI consults to
square meters of production area in China
several multinationals wishing to enter the
and almost 1 000 staff members, it is an
South African REIPPP and as a result, has
established player in the international solar
built a strong platform of competence within
photovoltaic community. To date, ZNShine’s
this particular field. ICI has played a pivotal
main markets have been Europe and the
role in positioning Sizagraph as a leading
United States, with offices in the USA, UK,
BBBEE participant in the renewable energy
Australia, Canada, Germany, Italy, and now
sector by always providing Sizagraph with
South Africa. Boasting an international
well-researched, practical advice. ICI’s success
research and development team, ZNShine
in establishing a high-quality assembly plant
strives for innovation, state-of-the-art
in Cape Town for an international inverter
products and continuous improvement.
manufacturer is indicative of the depth of
example being its Photovoltaic Thermal (PVT)
knowledge and commercial acumen possessed
System – a combination of a photovoltaic
by the ICI team.
PLEASE DIRECT ALL ENQUIRIES AS FOLLOWS:
and a thermal system to achieve higher efficiencies and provide heating, resulting
Optimists look to all the excitement.
in a significant increase of electricity yield,
Pessimists look to all that gets lost. They’re
longer panel lifetime, cost savings and
both right. How you react depends on what
stable performance under high temperature
you have to gain versus what you have to
climates. With its continuous quality
lose. Yet, while pessimists may be emotionally
control of all production processes, it is
calmed by their concerns, it will not aid them
no surprise that ZNShine is one of the first
practically. The pragmatic course is not to
solar photovoltaic panel manufacturers to
hide from the change, but to approach it
be insured by PowerGuard (also insured by
head-on. This is echoed by the Sizagraph
Zurich, BABT, 3E, to name a few).
vice-chairperson, Adv. Karen Foulkes-Jones
Adv. Karen Foulkes-Jones SC, Sizagraph vice-chairperson WEBSITE: www.sizagraph.co.za
SC, who adds: “We have positioned ZNShine Dr Mokone-Matabane adds: “China has
Solar SA for long-term success. Always keep
E-MAIL: info@sizagraph.co.za
always had an excellent relationship with
in the back of your mind that you are going to
LANDLINE: +27 (0) 11 722 9042
South Africa, thus it is no surprise that
have to explain to somebody, someday, what
Advocate Karin Foulkes-Jones SC
it is a Chinese company (ZNShine) that
your career was about. Everything I’ve ever
is providing a catalytic element towards
done is tied to sustainability. It is great to build a
MOBILE:
the achievement of South Africa’s socio-
company because you want to profit. That is fine
Mr Richard Johannisen +27 (0) 82 999 0888
economic objectives”.
on its own level. But it is so much more powerful
Mr Muneeb Gambeno +27 (0) 84 587 6420
BRICS SUMMIT PUBLICATION / PAGE 65
LONDON
FRANKFURT MUNICH
NEW YORK WASHINGTON DC
DAKAR
ENTEBBE COTONOU
ABIDJAN
LAGOS DOUALA
ACCRA LIBREVILLE POINTE-NOIRE LUANDA
Sﾃグ PAULO
BUENOS AIRES
BUJUMBURA
KIGALI
KINSHASA BRAZZAVILLE
NAIROBI DAR ES SALAAM
NDOLA LILONGWE LUSAKA BLANTYRE LIVINGSTONE VICTORIA FALLS HARARE WINDHOEK MAPUTO JOHANNESBURG CAPE TOWN
DURBAN EAST LONDON PORT ELIZABETH
MAURITIUS
BEIJING
HONG KONG MUMBAI
PERTH
Chhatrapati Shivaji International Airport, Mumbai – India
Reg No. 1993/004149/30.
AIRPORT SOLUTIONS - WORLD-CLASS RESULTS Experience gained through managing airports of different capacities has resulted in the development of a broad pool of skills, prompting Airports Company South Africa to seek business opportunities outside South Africa. This has led to the successful partnerships in two consortiums to invest and manage Chhatrapati Shivaji International Airport in Mumbai, India (from 2006) and Guarulhos International in São Paulo, Brazil, the largest international airport in Latin America (from 2012). Each of these airports processes approximately 30 million passengers per annum. India Airports Company South Africa’s involvement at Chhatrapati Shivaji International Airport in Mumbai is a flagship demonstration of the growing economic ties between India and South Africa. It is a shining example of co-ordinating experience and skills for the benefit of two nations. The 30-year concession started in 2006 and is in conjunction with the Airports Authority of India, a 26 percent shareholder. The first six years of the concession have already seen a positive transformation of the airport. To date, a new domestic passenger terminal was completed and inaugurated on 17 April 2010. The Southwest Pier and the overlaying of the runway intersection were also completed, as was the realignment of taxiway B1 to meet code F standards to accommodate large aircraft such as the A380.
The construction of a 24-metre wide channel for widening the Mithi river is nearing completion, while the construction of the Sahar Access Road and the new airport security force building and police station are also well underway. As a result of this successful partnership, the following accolades have been received by Chhatrapati Shivaji International Airport since 2006: • •
• • • •
Rated the third best airport globally and second best airport in India in the 25-40 million passengers per annum category, by ACI for 2011 Rated the best airport in India for airports above 15 million passengers per annum in the Airport Service Quality (ASQ) survey carried out by Airport Council International (ACI) and ranked fourth amongst all airports globally in the 15-25 million passengers per annum category for the second quarter of 2010 Best Managed Airport from CNBC AWAAZ Travel Awards for 2009 The airport’s proposed Air Traffic Control Tower won the ‘Autodesk Hong Kong Building Information Modeling’ Award in 2009 Frost and Sullivan Asia Pacific Aerospace and Defense Awards – ‘Aeronautical Excellence Airport of the Year’ in 2008 Voted ‘Best Airport in Public-Private Partnership’ for two consecutive years (2006 and 2007) by the Air Passengers Association of India (APAI).
Guarulhos International Airport, São Paulo – Brazil
Brazil Airports Company South Africa and Invepar formed a consortium that was awarded a 20-year concession in 2012 to develop, finance, operate and manage Guarulhos International Airport in São Paulo, Brazil. Airports Company South Africa is primarily responsible for airport operation and management within the concessionaire. The consortium with Invepar (of which Airports Company South Africa holds 10 percent) owns 51 percent of the airport concession. A number of milestones have already been achieved since the announcement of the successful bid winners in Brazil in April 2012. In May 2012, the concessionaire (which includes Airports Company South Africa, Invepar and Infraero) signed a contract with ANAC, the Brazilian Civil Aviation Authority. This was followed by the approval of the Operational Transition Plan (OTP) to ensure a successful transition from Infraero as the current airport operator to becoming part of the concessionaire.
Key deliverables during the transition include the uninterrupted transfer of the airport operations from Infraero to Airports Company South Africa as per the implementation timetable, as well as the assessment and improvement of the operational safety, security and environment, in line with the relevant legislation in Brazil. Fundamental infrastructure projects are also planned for completion in March 2014, ahead of the FIFA World Cup in June 2014. One of the priorities for the next two to three years for Airports Company South Africa is to transfer skills and share experience with the Brazilians, especially from an operations perspective. Airports Company South Africa is ideally positioned to provide the necessary expertise to assist in the transformation of existing airport infrastructure, management and service provision to world-class standards. Whether as stand-alone projects or long-term partnerships, Airports Company South Africa can make the difference. www.airports.co.za
EDITORIAL CONTRIBUTION
ACSA –
2013 African airport of the year
A
irports Company South Africa’s
survey, leading to us receiving this distinguished
cargo in and out of all our airports, OR Tambo
(ACSA) OR Tambo International
accolade,” said Tebogo Mekgoe, General
International Airport wishes to acknowledge
Airport was presented with the 2013
Manager of OR Tambo International Airport.
the collaborative team effort by all ACSA airports in South Africa, that has contributed
African Airport of the Year Award for Airport Cargo Excellence. The award
STAT TIMES, an Integrated International
to this proud achievement. Though we also
was attained following a STAT TIMES
Transport Media entity specialising in the air
emphasise that we have not even yet begun
online survey conducted globally, over a month-
cargo industry has been organising Air Cargo
to scratch the surface in moving bulk air cargo
long process, among varied air cargo industry
Africa exhibitions and conferences around
across African regions, we appreciate that
players totalling 42 000 voting readers.
the world since 1986. This 2013 African
what distinguishes our productivity, making our
instalment of the air cargo event was held at
performance special, are our superb levels of
“On behalf of staff, partners and all role
Ekurhuleni’s Emperors Palace from 20 to 22
connectivity, accessibility, and good location,
players who contribute daily to our operational
February 2013.
coupled with excellent air linkages supported by a world-class port network infrastructure in
efficiency at cargo division, OR Tambo International Airport wishes to express gratitude
Mekgoe concluded, “With a logistics platform
to all who voted for us in the STAT TIMES
that moves more than 317 000 metric tons of
PAGE 72 / BRICS SUMMIT PUBLICATION
South Africa.”
BRICS countries occupy 30% of global territory and are home to 45% of the world’s population “BRICS and Africa: Partnership for development, integration and industrialisation”
THE FIFTH BRICS SUMMIT. 26 – 27 MARCH 2013. DURBAN, SOUTH AFRICA.
EDITORIAL CONTRIBUTION
The blue economy:
BRICS maritime agenda BY COMMANDER TSIETSI MOKHELE CHIEF EXECUTIVE OFFICER SOUTH AFRICAN MARITIME SAFETY AUTHORITY (SAMSA)
T
TRADE AND MARITIME TRANSPORTATION
he South African economic
of these sectors that form a triple helix
structure is best defined as a
of economic infrastructure to propel the
tri-pot with its most prominent
development, transformation and growth
Trade is the lifeblood of the South African
two legs being the minerals
necessary to unleash the socio-economic
economy, with about 60% of its wealth
and energy sectors. The third
potential of South Africa. The country has
measured by gross domestic product
leg of the tri-port is the transportation
massive domestic transport needs, but
obtained from trade (i.e. import – export
sector. South Africa is a transport-
given that South Africa is an open, trade-
of goods and services). Maritime transport
intensive economy – the three forming the
based economy whose potential for growth
carries about 98% of all the country’s
strategic economic MINERAL - ENERGY -
lies more in improving on trade, this article
traded volumes of goods with all its trading
TRANSPORTATION COMPLEX (MET-C). It is
focusses on the international transportation
partners, including Africa; Asia; Europe; the
the complex combination and management
system that supports that trade.
Americas; BRICS; and IBSA. The prospects for growth and development of the South African economy, given our relatively small domestic consumption base, lies in our
MARITIME SECTOR’S VISION:
ability to trade; this puts shipping in an undeniable strategic and pivotal role in
To develop, grow and transform the BRICS maritime sector as the engine of economic
the economy ... no shipping, no trade, no
and social development, positioning each member state as the International Maritime
economic growth. In trade terms, South
Services Centre, which provides globally competitive and efficient world-class maritime
Africa contributes 0,7% to total global trade,
services, supported by effective maritime security arrangements and organisations, a
ranking number 46, but in seaborne trade
competitive maritime infrastructure system, ship registry and centres of excellence in
volumes traded over distances to and from
maritime knowledge, research and innovation, thus creating decent job opportunities
markets (tonne-mile terms), it contributes
through public and private enterprise development within a safe, secure and sustainable
about 5,6%, ranking between number 12 and
maritime environment, beneficial to all the BRICS member states.
13 globally. South Africa is truly a sea trade and transportation-intensive economy.
PAGE 74 / BRICS SUMMIT PUBLICATION
EDITORIAL CONTRIBUTION
Merchant shipping, both coastal and international, is intricately integrated with the country’s commercial seaports and supported
INVESTMENTMENT IN THE BLUE ECONOMY: THE BROADER MARITIME SECTOR
3 000-km long coastline with many vibrant coastal towns and port cities ready to receive investments in the cruise and maritime tourism industries; and the naval defence
by the inland maritime railway/road corridors
sector poised to grow in size and influence
and inland terminals, which form the Maritime
South Africa is a maritime nation and a
Trade Gate-Way System of the South African
coastal state with a long coastline, situated
in the African security context. Across all
economy. Yet, South Africa has mostly failed
on a major sea trade and shipping route,
these sub-sectors lies enormous marine
to elevate the maritime sector to a strategic
with an enormous and competitive port
manufacturing, engineering, technology
focal industry status. The country has
infrastructure. The country’s largest province,
and innovation potential – all forming a
lacked even the basic awareness of how the
the 10th Blue Province, made up of South
true South African Blue Economy with
maritime sector contributes to the domestic
Africa’s national sea area – the exclusive
thousands of jobs and hundreds of enterprise
socio-economic well-being and holds pivotal
economic zone – is almost three times larger
opportunities.
geo-strategic and security importance for
than the country’s land area.
CONCLUSION
South Africa. Taking full advantage of our oceans and Yet, all of South Africa’s trade is conducted
inland waterways is essential to national
The fifth BRICS Summit must respond
on foreign ships, facilitated by services
wealth creation (jobs and enterprise
to and lay the foundation for a BRICS
organised in foreign jurisdictions at an annual
development), social progress (quality of
maritime agenda, which ensures mutually
bill of over R120 billion (about 10% of the
life/individual and community development)
beneficial agreements to facilitate joint
total value of imports) in hard currency,
and political and sustainable environmental
investments in the maritime trade of
affecting our balance of payments, giving
systems
goods and services. The priority areas of
away jobs, investment and enterprise
cooperation should be in maritime trade and
opportunities. With 70% of all African Union
The 10th Blue Province is host to a diverse
shipping, the creation of opportunities to
(AU) member states being littoral, over 90%
maritime industrial complex, rich in potential
develop and promote African ship ownership
of the intra-Africa trade as well as trade
for domestic and foreign direct investment.
and greater share of tonnage carrying trade
with the rest of the world is also conducted
South Africa’s Blue Economy consists of
with the BRICS community and the maritime
by sea and carried on foreign-flagged,
shipping and trade industries; enormous
manufacturing sector, including vessel
-owned and -operated ships, with related
marine resources and thriving off-shore
construction (boats, ships and offshore
services dominated by foreign companies.
marine resource industries in minerals;
structures), as well as in the area of maritime
This situation constitutes foreign flight and
fishing and energy (oil and gas); a beautiful
capacity-building.
a security risk to South Africa and African trade.
BRICS MARITIME TRADE: AREAS OF ENGAGEMENT AND COOPERATION The fifth BRICS Summit poses a unique opportunity to engage with the main strategic trading partners of China, India, Russia and Brazil as well as the AU member states in changing this status quo. The AU has adopted the African Maritime Transport Charter and the African Integrated Maritime Strategy; and the Southern African Development Community has the Protocol on Transportation, Communications and Meteorology. These frameworks provide guidance on the engagements with BRICS partners in negotiating cooperation agreements to promote and ensure a greater share of sea-trade benefits for South African and African shipping and trade facilitation services, in particular shipping companies and related enterprises. The package of agreements must include joint beneficial capacity development (education, skills, research and innovation initiatives) and
MARITIME SECTOR ENGAGEMENT AREAS: • Cooperation in trade, ensuring fair and sustainable trade in goods and maritime services. • Cooperation in maritime transportation (national ship and seafarer registry developments). • Cooperation in infrastructure development (in shipping, offshore, ports, multimodal hinterland linkages and inland waterways), including joint investments in maritime industries and technologies. • Cooperation in the establishment of a BRICS maritime bank facility. • Cooperation in capacity-building (maritime education, training, research and innovation). • Cooperation in maritime security, safety and climate change. • Cooperation on international governance and geo-maritime challenges (effective representation and transformation of maritime-related bodies such as the International Maritime Organisation, United Nations Convention on the Law of the Sea and the International Seabed Authority).
initiatives to ensure a share of jobs for South Africans related to the trade.
BRICS SUMMIT PUBLICATION / PAGE 75
CAPABLE and r THE FAW J6 WAS CREATED BASED ON ONE CONCEPT:
DURABILITY!
reliable trucks
With 20 years of experience in the South African market, FAW offers competitively priced trucks that truly tick all the right boxes. This 6-cylinder, turbo-charged, heavy-duty workhorse boasts an impressive 2100 Nm of torque, great fuel efficiency and is backed up by an extensive national service network. For more information visit www.faw.co.za or any of our listed Selling Dealers: Bethlehem (058) 303 9613 | Bloemfontein (051) 432 3332 | Cape Town (021) 987 1909 Francistown (00267) 241 5458 | Gaborone (00267) 316 3200 | Harrismith (058) 622 2486 Isando (011) 392 1530 | Kimberley (053) 836 5500 | Klerksdorp (018) 462 4041 Malelane (013) 790 0341 | Middelburg (013) 246 2471 | Nelspruit (013) 757 0585 Pinetown (031) 700 5167 | Port Elizabeth (041) 463 3338 | Pretoria West (012) 372 1323 Randburg (011) 791 0355 | Shelley Beach (039) 315 0012 | Silverton (012) 804 3699 Vereeniging (010) 590 9916 | Vredendal (027) 213 1090
FAW Vehicle Manufacturer’s SA (PTY) Ltd A member of the China FAW Group Corporation, A FORTUNE 500 company.
FAW Group Co. Ltd is China’s oldest and largest automotive manufacturer, can trace its roots back to July 1953 when the first assembly plant was built. Originally started as First Automobile Works, following state intervention, the First Automobile Works restructured its business model, and the China FAW Group Co. Ltd was established in June 2011.
exported to some 140 countries around the world, which is supported by modern production facilities in Pakistan, South Africa, Tanzania, Brazil.
Over the past five decades the FAW Group has evolved into one of the world’s largest producers of motor vehicles comprising of passenger cars and commercial vehicles. FAW Group has its headquarters in China’s north eastern city of Changchun in Jilin Province.
Over the past 19 years of being active in South Africa with a manufacuring, retail, sales, parts, services a assembly plant in Spartan, Gauteng, FAW SA has established itself as a force in the local commercial vehicle industry and is planning for significant expansion and growth in the years to come.
FAW Groups total assets are currently valued at over $26.1 billion. The company employees in excess of 133,000 staff globally. In 2011 FAW China ranked 165 on the Global Fortune 500 listing with revenue of approximately $ 57 billion and profits in excess of $ 2.1 billion.
The product range of commercial vehicles in SA includes 4 ton Medium Commercial Vehicles, 5 to 8 ton Heavy Commercial vehicles & Extra Heavy commercial vehicles that can be custom built according to clients specifications.
GLOBAL FOOT PRINT The company has rapidly expanded globally, and presently vehicles are being
Over the years, the FAW Group has successfully formed alliances with a number of international automotive manufacturers. FAW SOUTH AFRICA
Following the decision to invest and build a state of the art manufacturing plant in the Eastern Cape area of Coega, the company is gearing up for this massive step forward.
The total investment of approximately R 600 million is one of the most important and significant investments by a Chinese entity into South Africa. The funds will also provide the working capital to operate the factory, which will be on a par with anything in the world. The plant will be built on 400,000 square meters of land, and is expected to manufacture 5,000 trucks and 30,000 passenger cars annually. The truck assembly facility will create job opportunities when the passenger assembly plant is commissioned. It is envisaged that the plant will be completed during 2014, and the first vehicles to be assembled in the new plant will roll off the assembly line in thereafter.
EDITORIAL CONTRIBUTION
Investment in mining
“
South Africa is in it for the long haul”,
regime entail? Based on what has been said above,
responded with a call for a bolder stance in order
South Africa’s Finance Minister Pravin
one would expect for such a regime to include the
to restore some of the lost confidence. Countries,
Gordhan stated in his recent Budget
following basic principles: efficient macro-economic
such as Ghana and Zambia, with growing mining
speech. This implies a desire to create
management, effective investment protection
industries, proclaimed that nationalisation would be
a sustainable economy which, in
mechanisms, the rationalisation and integration
unconstitutional in their countries.
turn, requires the long-term reconstruction and
of fragmented legislative requirements for the
development of this country and steering “South
grant of the suite of authorisations required to
The average delay in being granted the suite of
Africa Inc” from consumption to economic growth
mine, competitive mining taxes, security of tenure,
authorisations (i.e. mining right, water use licence,
that is investment-driven and creates employment. It
objective criteria for the grant of rights to exploit
environmental authorisation, etc.) required to mine
therefore came as no surprise that Minister Gordhan
mineral resources, limited administrative discretion, a
is in excess of two years. In Tanzania and Ghana,
deemed it necessary to call upon corporate South
defined role for government and a capacitated and
it takes less than three months. The Chamber of
Africa to revise their perception of the risk of doing
responsive mining administrative department.
Mines has called upon the Department of Mineral Resources to legislate for the rationalisation and
business in South Africa. Prior to the promulgation of the Mineral and
integration of fragmented statutory requirements for
The call comes in the wake of the Marikana incident,
Petroleum Resources Development Act (MPRDA),
the grant of authorisations to mine.
wide-spread and unprotected strikes, retrenchments
2002 nearly a decade ago, the entitlement to
and mine closures in the mining industry. Minister
mineral rights was based on a secure system of
Many mining executives also expressed concern
Gordhan soberly remarked that “the events in the
private ownership. The MPRDA now recognises the
during the recent Mining Indaba that South
mining sector have brought a new sense of reality
internationally accepted right of the State to exercise
Africa has mooted an increased mineral resource
to bear” on government. A proposed review of
sovereignty over South Africa’s natural resources and
royalty while many other African countries are
the country’s mining tax policies, increasing costs,
sets out to promote social transformation by virtue of
implementing investor-friendly legislation in terms
fractious labour relations, declining production
the exploitation of its mineral resources through the
of their own tax regimes. It has been suggested that
output and the risk of mine nationalisation is the
principle of state custodianship.
mining companies would need to brace themselves for a tax on “super profits”. The mechanics of the
reality that faces the South African mining industry. Security of tenure was maintained by the
royalty calculation in its current form does not
It is as a result of these risks that “South Africa Inc”
implementation of various transitional provisions
allow the State to share in “super profits” as an
is increasingly becoming a less attractive mining
of the MPRDA, which arguably vested in the
upper cap applies. This seems to be the current
investment destination mindful that we have to
Minister of Mineral Resources a limited discretion
bone of contention, and is the one fundamental
still compete with other resource rich countries for
not to transition extant mineral rights into the new
difference between the current royalty regime and
limited funding resources following the recently
regulatory regime if the mineral right holder did
a resource rent type tax. A resource rent tax can
demised “commodity boom”.
not persuade the Minister that it would facilitate
be described as the levying of tax on super profits
the meaningful and substantial participation of
which would be triggered after a “normal” return
The macro-economic reality is that South Africa
historically disadvantaged South Africans. The
on investment has been achieved. “The broader
does not possess a sufficiently skilled industry to
Minister was required to develop a charter for the
review of the tax system will consider whether this
export itself out of its problems and is therefore
transformation of the minerals industry, which
approach is sufficiently robust and assess what the
a net importer of goods with a consequent drain
would provide guidance in respect of the ambit
most appropriate mining tax regime is to ensure
on the gross domestic product of the country.
of this noble but open-ended social-economic
that South Africa remains a competitive investment
In order to increase the market value of the goods
objective. The terms and concepts introduced
destination,” National Treasury said in documents
and services produced in South Africa, continuous
by these documents leave much uncertainty and
presented to Parliament as part of its budget.
foreign investment is required and this can be
scope for dispute and it is, unfortunately, difficult
facilitated by, among other measures, fostering an
to predict what a court will do when confronted
Ultimately, the future of this country is a shared
investor-friendly environment for foreign direct
with the differences in usage and terminology in
responsibility and everyone must, according to
investment in the South African mining sector.
giving meaning to the “spirit” and purport of those
Minister Gordhan, “start believing in South Africa
documents. South Africa entered into over 40
Inc and recognise that we have a collective
The mineral patrimony of this country was recently
bilateral investment treaties (BITs) to allay concerns
future”. We can all perhaps learn from the
valued to be in excess of a trillion dollars, yet South
of foreign investors. It was recently announced that
resourceful South African mining industry which,
Africa ranks behind countries like Botswana, Ghana
South Africa intends to reconsider a number of BITs.
amidst rising operational costs, is still a world
and Zambia.
Amendments to the MPRDA have recently been
leader in the development of mining technology
proposed, which would require any share traded in
for the optimal exploitation of mineral resources.
It has often been said that foreign direct investment
a company owning mining assets and listed on the
We do, after all, currently operate the deepest
in the mining sector in South Africa requires
JSE requiring the Minister’s prerequisite consent.
mine in the world.
primarily a stable political and legal regime. The
Although the Minister of Mineral Resources, Susan
success of the mining sectors in other African
Shabangu, reiterated during the annual Mining
countries is largely due to the conscientious efforts
Indaba in February that mine nationalisation is
of their governments to provide regulatory certainty.
something that her administration would never
What does an investor-friendly mineral regulatory
consider, the international investor community still
LLOYD CHRISTIE DIRECTOR EDWARD NATHAN SONNENBERGS
BriCS SummiT puBliCaTion / paGE 79
EDITORIAL CONTRIBUTION
DENEL –
Defence and technology PARTNER OF CHOICE FOR BRICS COMPANIES
a relationship with Russian Helicopters to
mission to its BRICS partner. The visit included
provide maintenance, repair and overhaul
meetings with senior executives of Embraer
services to its range of products in Africa;
who were briefed about the company’s unique
and Denel Aerostructures is involved in talks
capabilities in the design, industrialisation
with Embraer SA to manufacture parts on
and manufacturing of complex composite and
future aircraft construction.
metallic aircraft structures.
The cooperation between Denel Dynamics
Mr Saloojee says Denel’s strategic location
and Brazil has resulted in the development of
in Africa makes it an ideal partner for
enel’s growing reputation in the
the 5th generation A-Darter missile able to
companies in the BRICS group looking to
global defence industry positions
manoeuvre at very high G-forces with lock-
expand their business in the defence and
itself as South Africa’s obvious
on after launch capability.
high-technology arenas.
The A-Darter, which will be produced in
“This is the experience, the capacity and the
both South Africa and Brazil, has already
quality of service that Denel now also offers
completed extensive testing including guided
to companies in the BRICS group,” says Mr
With a proven record for quality products
launches at the Denel Overberg Test Range
Saloojee.
and services across the spectrum of
on the southern tip of Africa.
D
partner of choice for BRICS companies who are extending
their business into Africa.
defence manufacturing – from landward, to aerospace, to missile technology, to
The Africa Aerospace and Defence Exhibition
maintenance services – Denel offers
(AAD) in September 2012 provided the
advanced facilities, a world-class skills
backdrop for the signing of an agreement
pool and an unflinching commitment
between Denel and Russian Helicopters. In
to excellence, innovation, research and
terms of this, Denel Aviation will, in future,
development.
be responsible for maintenance and repair services on helicopters produced by Russian
“Denel is excited about the many
Helicopters on the African continent.
opportunities for new business and cooperation flowing from South Africa’s
“We are delighted to have relations with
role within the BRICS community,” says the
one of the world’s leading manufacturers of
Group Chief Executive, Riaz Saloojee. “We
rotary wing aircraft and are looking forward
already have established joint ventures with
to extend this relationship in the future,” says
key defence industry players in the BRICS
Mr Saloojee.
countries and I am convinced that the Durban Summit will provide even greater
With Russian Helicopters expanding its
exposure of the products we manufacture
presence in Africa Denel Aviation provides
and the services we provide.”
a world-class facility and highly-skilled engineering and technical base to support its
Denel Dynamics, a division within the state-
products.
owned company is working with Brazil on the development of the A-Darter, a short-
Denel Aerostructures (DAe) recently visited
range air-to-air missile; Denel Aviation has
Brazil as part of a South African trade
PAGE 80 / BRICS SUMMIT PUBLICATION
Aircraft MRO
Missiles
UAV systems
Landward defence systems
Aerospace test range
Aircraft manufacturing and assembly
Ground-based air defence
Mine clearing and contraband detection
Small and medium calibre ammunition
Technical training
Property development and letting
Comprehensive Defence Solutions Denel’s diverse range of defence and aerospace products provides you with comprehensive solutions to all your defence and security requirements, whether air, sea or landwards defence. Its strategy of partnering with local and international defence and aerospace companies ensures that Denel’s customers benefit from the latest technologies at competitive prices.
THE DENEL GROUP Denel Aviation Denel Technical Academy Denel Aerostructures Denel Dynamics Denel Integrated Systems Solutions Denel Overberg Test Range Denel Land Systems Denel Mechem Denel PMP Denel Industrial Properties
Denel SOC Limited PO Box 8322, Centurion, 0046, South Africa Tel: +27 12 671 2853 Fax: +27 12 671 2751 Email: marketing@denel.co.za Website: www.denel.co.za
Scene 1
Little Themba walks into a spaza shop and walks up to the lady at the counter. “ How much is a chocolate cone ice cream?” he asks “ R5” the lady answers rudely. He only has R5 and ponders whether he should spend all of it on ice-cream. “How much is the Vanilla?” “R3” answers the lady, visibly annoyed. Little Themba counts with his tiny fingers and buys the R3 ice cream. He walks out with a big smile on his face. Soon as he is out of sight, the unfriendly lady peers into a plate on her counter. There is a R2 tip that wasn’t there before the boy walked into the shop.
The National Film and Video Foundation is proud to play a critical role in helping South African filmmakers develop and tell their stories through film. To find out more visit www.nfvf.co.za
SOUTH AFRICA
an agency of the Department Of Arts And Culture
Bringing South African stories to life.
BRICS. The birth of a movie hub. South Africa has made great strides in producing great films some of which have gone on to win prestigious international awards. As South Africa moves to partner fellow BRICS nations in co-financing and co-producing joint film projects, local filmmakers will now have the opportunity to reach even more global audiences. With a combined population of over 3billion people, the BRICS nations provide a potentially massive platform for South African filmmakers to tell their stories.
SOUTH AFRICA
an agency of the Department Of Arts And Culture
Bringing South African stories to life.
EDITORIAL CONTRIBUTION
South Africa film industry in the
spotlight A
Zama Mkosi, CEO of NFVF
t the fifth BRICS Summit, one
She points out that one of the major reasons
the co-production is that the South African
of the key areas of focus is the
why the private sector is reticent to invest
story gets to travel to other countries.
South African film and television
is due to the lack of comparative figures or
industry. The South African
information. The NFVF recently commissioned
To attract foreign production to South Africa
industry started from a small base
Deloitte and Touche to conduct an in-depth
and promote the industry, the NFVF attends
and now boasts a highly skilled, business-
economic assessment study of the film
various film festivals around the world. Mkosi
minded and globally competitive industry,
industry, the study should provide the industry,
says that this is critical in terms of remaining in
backed by government.
government and the business sector with
the public eye. “We aim to market South Africa
statistics that will help develop appropriate
as a world-class film destination. The dti has
The National Film and Video Foundation
strategies for facilitating development of the
contributed greatly through their incentives.
(NFVF) is a statutory body mandated by
film sector and to enhance their contributions
Parliament to spearhead the development
to the gross domestic product and show the
“Over the past two years, since the Cape
and promotion of the South African film and
sector as an important player in the economy
Town Film Studios (CTFS) opened, we
television industry.
The study was expected to be completed by
have seen major Hollywood and other big
March and will make information regarding
international players shoot on our shores. It is
NFVF CEO, Zama Mkosi says that the industry
investment benefits accessible to the private
important that South Africa attracts foreign
has made significant strides over the last few
sector. Mkosi states: “As the NFVF, we want
direct investment into the country
years. “We have seen many new developments,
to contribute and broaden the investment
and therefore it is paramount that the
for instance the rebate for post-production
landscape.”
country be seen as a player in the global entertainment industry.”
from the dti (Department of Trade and Industry), the recognition of South Africa on
One of the major developments has been
the world stage and numerous international
the signing of eight co-production treaties
Transformation is also high on the list of
accolades. Particularly significant is the
(Canada, Germany, Italy, United Kingdom,
priorities of the NFVF. Mkosi explains that
increase in the number of South African films
France, New Zealand, Australia and Ireland).
transformation is viewed from all levels from
produced. In the last few years around 20-25
Mkosi maintains that these treaties offer both
training, funding and creating access to film.
films have been produced annually. We are
local and international companies considerable
“Film cannot be relegated to a select few
excited by the direction in which the industry
investment and creative opportunities. “They
and needs to be accessible to all. We support
is moving but there are various challenges that
play a huge part in developing the industry
training through various programmes and
need to be overcome.”
and creating international networks, while
offer numerous bursaries to the previously
developing and harnessing the skills of the
disadvantaged.”
A major challenge is to increase the levels
local crew. We need to utilise more of these
of funding and investment in the industry.
treaties as this would then increase the
She emphasises that the film industry is
Mkosi explains that at this stage the industry
number of South African producers entering
like any business: it needs to be sustainable
is largely funded by government and related
into co-productions. The treaties are also not
and viewed on a long-term basis. “While
agencies. “In order to grow the industry, we
utilised correctly to create long-term benefits
government will continue to support the
need to see more private-sector investment.”
for the country.” One of the major benefits of
industry, it is the responsibility of the
PAGE 84 / BRICS SUMMIT PUBLICATION
EDITORIAL CONTRIBUTION
filmmakers and producers of content
rebate. The CTFS also offers a world-class
on the economy of R3,25 billion. The job
to ensure that there are financial and
facility and we are currently shooting the
opportunities also contribute significantly with
economic returns.”
Starz Production/Michel Bay television series
no less than 29 000 people being employed
there. Out there, South Africa is on every
on these productions.”
INDUSTRY PERSPECTIVE
producer’s lips.”
The South African film industry has an
Dezi Rorich of Metal Moon Publicity has been
released through the main distributors Ster
impressive number of production companies
involved in the film industry for 25 years. She
Kinekor, Nu Metro, UIP and Indigenous Film.
catering for international service work, co-
says that on her recent trip to Hollywood,
productions and local productions. It has been
where she promotes the industry together
Doug Place, marketing manager of Ster
referred to as one of the best places in the
with LA-based MediaXchange, she discovered
Kinekor Theatres, South Africa’s largest
world to shoot due to the dti rebate, diversity
that around 50% of the producers she spoke
distributor, says that they are releasing a
of locations, weather, infrastructure and highly
with had projects heading to South Africa
dozen South African films this year. “There
skilled crew.
this year. “This has a knock-on effect of
are too many to name but the bigger titles
employment, skills and economic benefits.
are Spud 2 and Lien Se Lankstaan Skoene. We
Chris Roland of ZenHQ Films, who has been
The other great and long-awaited news is that
expect a robust box office performance for
involved in the industry for many years
America wants stories that emanate outside of
local films.”
and has produced numerous international
US borders.”
In 2013, there will be over 20 local films
Helen Kuun, CEO of Indigenous Film, an
productions, says both South African and international producers have a wide selection
The CTFS, which the Hollywood Reporter ranked
independent distribution company, explains: “We
of countries to choose from when entering
as the top seven state-of-the-art facilities of
will be releasing numerous local titles this year.
or looking for co-production partners. “In
its kind in the world, has gained international
The biggest challenge is for filmmakers to be
South Africa, the dti’s incentive is competitive
reputation. The studios have hosted a number
aware of what goes on the big screen and what
globally, soft and very well-managed, making
of high-profile international films, including Mad
is for TV or DVD only. All films are not suited for
it an attractive proposition. The growth of
Max: Fury Road (Warner Brothers), Chronicle
all platforms and just because a film was made
the industry, sustained employment and
(20th Century Fox) and Safe House (Universal
does not mean it will manage to hold a screen.”
the number of non-treaty and treaty co-
Studios). Nu Metro will also distribute numerous local
productions is a direct result of the dti rebate.” Nico Dekker, CEO of CTFS, comments that they
titles, says Ricky Human, General Manger. “We
Vlokkie Gordon of Film Afrika, which has
were astonished by figures released by the dti
are releasing a variety of South African films.
serviced numerous high-end Hollywood
regarding productions that were hosted by the
With the successes of films like Semi-Soet,
productions, says that South Africa is very well
studios. “It showed that since December 2010,
Liefling, Spud, Material, Die Wonderwerker and
positioned for continued growth. “There are
productions have spent R1,3 billion indirect
recently released animation film Adventures of
many benefits for shooting here, including the
expenditure in South Africa and mostly
Zambezia, which achieved in excess of
increased rebate for service film companies
in the Western Cape. Using an economic
R5 million at the box office, there is definitely
and the addition of the post-production
multiplier of 2,5, this translates into an impact
a revival in the local film industry.”
BRICS SUMMIT PUBLICATION / PAGE 85
The
VOICE of
LOCAL GOVERNMENT Established in 1996 the South African Local Government Association serves as the representative voice for 278
• Develop capacity in municipalities • To act as an employer body on behalf of municipalities
member municipalities tasked with four main functions:
SALGA interfaces with Parliament, the National Council of Provinces
• To represent, promote and protect the interests of local
(NCOP), Cabinet as well as provincial legislatures.
government • To transform local government to fulfil its developmental role • Raise the profile of local government • Ensure the full participation of women in local government
Our vision is to be consultative, informed, mandated, credible and accountable in our quest to be an association that is relevant to its members, that is at the cutting edge of quality and sustainable services.
Contact Details SALGA (012) 369 8000 (tel) (012) 369 8001 (fax) 175 Corobay Street Waterkloof Glen Ext 11
Visit us on www.salga.org.za
SALGA
South African Local Government Association
PROVINCES
EASTERN CAPE The Eastern Cape, lying on the southeastern South African coast, is a region of great natural beauty, particularly the rugged cliffs, rough seas and dense green bush of the stretch known as the Wild Coast.
The region boasts remarkable natural diversity, ranging from the dry, desolate Great Karoo to the lush forests of the Wild Coast and the Keiskamma Valley; the fertile Langkloof, renowned for its rich apple harvests; and the mountainous southern Drakensberg region at Elliot. In the Eastern Cape, various floral habitats meet. Along the coast, the northern tropical forests intermingle with the more temperate woods of the south. The province is serviced by airports situated in Port Elizabeth, East London, Mthatha and Bhisho.
TOURISM The Eastern Cape is the only province in South Africa, and one of the few places on Earth, where all seven biomes (major vegetation types) converge.
Key attractions • The rugged beauty of the Wild Coast, including Hole-in-the-Wall. • Port Elizabeth, the sunshine capital of the Eastern Cape, with its friendly people and excellent beaches. • The Red Location Museum of the People’s Struggle in New Brighton, Port Elizabeth – winner of several international awards. • The village of Qunu, where former President Mandela grew up and which now features the Nelson Mandela Museum. • The world’s highest bungee jump (216 m) at the Bloukrans Bridge over the Storms River.
PAGE 88 / BRICS SUMMIT PUBLICATION
PROVINCES
• Varied game reserves, including the Addo Elephant, Mountain Zebra and Mkambati parks.
Capital: Bhisho Principal languages: isiXhosa 83,4% Afrikaans 9,3% English 3,6% Population: 6 562 053 (Census 2011) % share of total population: 12,7% Area: 169 580 km 2 % of total area: 13,9% (Acknowledgement: Pocket Guide to South Africa, Published by the Government Communication and Information System)
WEBSITE: www.ecprov.gov.za
BRICS SUMMIT PUBLICATION / PAGE 89
EDITORIAL CONTRIBUTION
Chinese Automaker starts Building in SA
C
hina’s leading auto manufacturer,
desperately-needed job opportunities,
First Automobile Works (FAW),
while also helping to address poverty and
has begun construction on
inequality in the province,” Eastern Cape
a US$100-million truck and
Premier Noxolo Kiviet said during the sod-
passenger car plant at the Coega
turning ceremony.
Industrial Development Zone (IDZ) in South
Coega’s added incentives
Africa’s Eastern Cape province.
Kiviet said the South African Government’s Officials from FAW recently signed a contract
efforts to develop infrastructure in the province
with the Coega Development Corporation to
was pivotal in securing FAW’s investment.
mark the beginning of construction at the IDZ near Port Elizabeth.
Vilakazi said FAW’s decision to invest in the province was prompted by Coega’s location,
“FAW’s decision to build the plant in South Africa
The plant is expected to produce 5 000 trucks
the proximity of the Port of Ngqura, the
is significant, as it will be one of the biggest
annually, as well as light commercial vehicles
logistical solutions available, the availability
manufacturing investments by China in the
and passenger cars. In its first phase, the plant
of skills in the Nelson Mandela Bay
country so far,” Coega Development Corporation
is expected to create 500 permanent jobs for
Metropolitan area, and support mechanisms
spokesperson Ayanda Vilakazi said recently.
people in the province.
offered by Coega.
“FAW’s arrival in the Eastern Cape adds to the
Once completed, the truck assembly facility
Since entering the market in 1984, FAW
existing list of automobile manufacturers already
is expected to create a further 500 to 800
has produced 16 million vehicles and has
in the province, including Volkswagen, General
jobs, with more jobs being created when the
consistently been a Fortune 500 company.
Motors and Mercedes-Benz,” Vilakazi added.
company starts producing an additional 30 000 passenger vehicles annually.
500 new jobs in the first phase
FAW is China’s leading exporter of vehicles, and has joint venture operations with many of the
Initial construction of the plant will cover 400 000
“We welcome the private sector’s investment
world’s leading vehicle manufacturers, including
square metres and cost R200 million.
of billions of rands that will provide
Volkswagen, Toyota and Mazda.
PAGE 90 / Brics Summit publication
EDITORIAL CONTRIBUTION
South Africa – an attractive international tourism destination
S
outh Africa’s hosting of the BRICS Summit is an enormous marketing opportunity for the Republic as part of boosting the economy and creating jobs. Tourism is one of the country’s six job drivers in terms of the New Growth Path, the economic strategy within the umbrella of the National Development Plan.
The considerable investment by the South African Government and the private sector in the tourism industry and the continued targeted marketing around the world, are beginning to pay off. Recent tourism figures indicate that South Africa continues to be an attractive international tourism destination. Tourism Minister Marthinus van Schalkwyk has announced that the months from January until October 2012 showed an increase of 10,4%, with 7 535 498 tourist arrivals compared to 6 823 517 tourist arrivals for the same period in the previous year. A total of 204 247 tourists from Germany visited South Africa from January to October 2012. This represents an increase of 12,2% compared to the corresponding period in 2011. Germany is one of the key traditional overseas markets for travel to South Africa, with the United States of America and the United Kingdom taking the lead. The United Nations World Tourism Organisation indicates that global tourism growth was 4% in 2012, which means that South African tourism grew above the global rate of tourism growth.
Encouragingly, growth from emerging markets is especially impressive, with Asian tourist arrivals having grown 36,9% up to the end of September 2012, driven by growth of 63,5% from China and 18,3% from India. Regional African tourist arrivals are also doing extremely well, growing by 8,7% overall, with 25,5% growth from Angola and 17,9% growth from Nigeria notable highlights. Foreign direct spend from international tourists between January and September 2012 was R53,4 billion. The South African Reserve Bank reported that travel receipts increased again in the second quarter of 2012, rising by R5 billion to R83,5 billion. This is an all-time record high, and now far exceeds the level of travel receipts recorded at the time of the 2010 FIFA World CupTM. The Reserve Bank further reported that “spending by non-resident visitors in South Africa rose for the fifth consecutive quarter in the second quarter of 2012, assisting in the containment of the overall deficit on the services account”. For the next five years, South Africa has already secured over 200 international conferences, which are estimated to attract about 300 000 delegates and provide an economic boost of more than R1,6 billion for the economy. In 2011, according to our departure survey, South Africa received 392 000 business travellers, of whom 140 000 were pure meetings, incentive, conference and events delegates.
BRICS SUMMIT PUBLICATION / PAGE 87
PROVINCES
FREE STATE The Free State, a province of wide horizons and blue skies, farmland, mountains, goldfields and widely dispersed towns, lies in the heart of South Africa.
Between the Vaal River in the north and the Orange River in the south, this immense rolling prairie stretches as far as the eye can see. The capital, Bloemfontein, houses the Supreme Court of Appeal, a leading university and some top schools. Mining, particularly gold, is the biggest employer, followed by manufacturing. A gold reef of over 400 km stretches across Gauteng and the Free State. The province accounts for 30% of South Africa’s total gold production, and contributes significant amounts of silver, bituminous coal and diamonds. Known as the “bread basket” of South Africa, about 90% of the province is under cultivation for crop production.
TOURISM The Eerste Raadsaal in Bloemfontein (First Parliament Building) was built in 1849 as a school and is the city’s oldest surviving building that is still in its original condition. It is still used as the seat of the Provincial Legislature. The National Women’s Memorial is a sandstone obelisk, 36,5 m high, which commemorates the women and children who died in concentration camps during the Anglo-Boer/South African War.
Key attractions • Clarens is surrounded by spectacular scenery and boasts many art galleries. • The Golden Gate Highlands National Park outside Clarens has beautiful sandstone rock formations.
PAGE 94 / BRICS SUMMIT PUBLICATION
PROVINCES
• The King’s Park Rose Garden in Bloemfontein boasts more than 4 000 rose bushes. • The Vredefort Dome, a world heritage site, is the oldest and largest meteorite impact site in the world. It was formed about two billion years ago when a giant meteorite hit the Earth.
Capital: Bloemfontein Principal languages: Sesotho 64,4% Afrikaans 11,9% isiXhosa 9,1% Population: 2 745 590 (Census 2011) % share of total population: 5,46% Area: 129 480 km2 % of total area: 10,6% (Acknowledgement: Pocket Guide to South Africa, Published by the Government Communication and Information System)
WEBSITE: www.freestateonline.fs.gov.za
BRICS SUMMIT PUBLICATION / PAGE 95
PROVINCES
GAUTENG Gauteng is the economic centre of South Africa and the continent, responsible for over 34,8% of the country’s total gross domestic product (GDP), although it is the smallest of South Africa’s nine provinces.
Gauteng is also the financial-services capital of Africa, as more than 70 foreign banks have their head offices in the province, as do at least the same number of South African banks, stockbrokers and insurance giants. Financial and business services, logistics, manufacturing, property, telecommunications and trade are some of the most important economic sectors. Johannesburg, nicknamed “Egoli” (Place of Gold), is the capital of the province and a city of contrasts. South of Johannesburg is Soweto. There are 159 mines – 44 of them gold mines – in Gauteng, that together account for a quarter of South Africa’s total mineral production. Most of the mining is for gold – 80% of Gauteng’s output. Most overseas visitors enter South Africa via OR Tambo International Airport. Some 50 km north of Johannesburg lies Pretoria, the administrative capital of South Africa and home to the Union Buildings. The Gautrain started running in June 2010 and now carries passengers between Johannesburg and Pretoria in less than 40 minutes.
PROVINCES
TOURISM
Capital: Johannesburg
Gauteng, the economic heart of southern Africa, offers a
Principal languages:
vibrant business environment and many tourist attractions,
isiZulu 21,5%
including a rainbow of ecological and cultural diversity.
Afrikaans 14,4% Sesotho 13,1%
Key attractions
English 12,5%
• The Vaal Dam covers some 300 km2 and is a popular venue for water sport. Numerous resorts line the shore. The dam is also
Population: 12 272 263 (Census, 2011)
popular with birders and anglers. % share of the total population: 23,7% • The Sterkfontein caves near Krugersdorp are the site of the discovery of the skull of the famous Mrs Ples, an estimated
Area: 17 010 km2
2,5-million-year-old hominid fossil; and Little Foot, an almost complete hominid skeleton of more than 3,3 million years old. • The Walter Sisulu National Botanical Garden has a 70-m high waterfall, stunning indigenous plant displays and a breeding pair
% of total area: 1,4% (Acknowledgement: Pocket Guide to South Africa, Published by the Government Communication and Information System)
of black eagles. • There is a ring of hills a kilometre in diameter and 100 m high just 40 km north of Pretoria. These hills are the walls of the Tswaing Meteorite Crater, left by an asteroid 200 000 years ago. • The National Zoological Gardens in Pretoria is considered one of the 10 best in the world. • The Constitution Hill Precinct is set to become one of South Africa’s most popular landmarks. • The old mining town of Cullinan is where the world’s biggest diamond, the 3 106-carat Cullinan diamond, was found. • A guided tour of Soweto leaves a lasting impression of this vast community’s life and struggle against apartheid. • The Apartheid Museum in Johannesburg tells the story of the legacy of apartheid through photographs, film and artefacts. • The Union Buildings in Pretoria was the venue for the inauguration of presidents Mandela, Thabo Mbeki and Jacob Zuma.
WEBSITE: www.gautengonline.gov.za
EDITORIAL CONTRIBUTION
DESTINATION JOBURG FOR VIABLE INVESTMENT OPPORTUNITIES Tourism is a vital part of the city’s economic growth agenda and plays an important role in encouraging the development of the SMME sector. It stimulates the growth and development of a vibrant second economy, in line with Johannesburg’s Growth and Development Strategy, the Joburg 2040 (www.joburg.org.za/gds2040). The City’s leadership remains focused on positioning Johannesburg not only as the continent’s leading business hub and vibrant all year round leisure and lifestyle destination, but also offering plenty of opportunities as a base for viable tourism investments. The Lanseria precinct and Midrand Business District are just two key tourism investment areas which have been identified for this purpose. Significant projects include the development opportunities of: • World-class accommodation facilities • State-of-the-art meeting venues • Professional hospitality services encompassing transport, training, amenities, suppliers, entertainment, gambling and cuisine For more information contact the City’s Economic Development team via email: Reginald Pholo reginaldp@joburg.org.za
www.joburgtourism.com info@joburgtourism.com Tel: +27 11 214 0700
PAGE 54 / BRICS SUMMIT PUBLICATION
Follow us on:
EDITORIAL CONTRIBUTION
Joburg,
Africa’s business hub
J
ohannesburg’s reputation as a premier
of major metropolitan areas to discuss issues
“Johannesburg is continuing to grow as one
destination for international business
regarding the impact of urbanisation on the
of the preferred conferencing and investment
conferences and exhibitions will
world. The five-day event will take place in July
destinations and as part of the City of
be reinforced this year as it hosts
2013 and coincide with a meeting of the Forum
Johannesburg’s 2040 Strategy, we will remain
three global summits. As one of the
of Metropolitan Mayors.
to grow business tourism and conferencing as a key investment area,” said Mr Ruby Mathang,
fastest-growing commercial cities in Africa, Johannesburg boast world-class conferencing
In October this year, Joburg will play host to
MMC for Economic Development, City of
facilities and ITC infrastructure. In association
the One Young World Summit, a global forum
Johannesburg.
with stakeholders, the Johannesburg Convention
of young leaders which is expected to attract
Bureau and the Johannesburg Tourism Company
some 1 000 delegates from every continent. One
Other conferences lined-up for Johannesburg
is aiming to grow business tourism through the
Young World was established in 2010 to ensure
include:
hosting of global summits in the city.
issues affecting the youth are receiving global attention. Among its patrons are Archbishop
2013
The C40 Summit on Climate change will take
Desmond Tutu and former UN Secretary-
place in June 2013, bringing together global
General, Kofi Annan. Young leaders can now
• World Credit Congress (14 - 16 May)
leaders, activists and innovators to discuss
apply to attend the next One Young World
• Pan-African Franchise Federation Conference
environmental issues relating to the urban
Summit, which takes place in Johannesburg,
environment. C40 is a group of 59 major
South Africa, 2-5 October 2013. One Young
cities which share knowledge and experience
World delegates are 18-30 years old and have
on the environment, climate change and the
demonstrated their leadership potential. Many
sustainable management of resources. It is
have already had an impact in their home
currently chaired by New York Mayor Michael
countries on a range of issues, including the role
Bloomberg and supported by the Clinton
of business in society, transparency in business
Climate Initiative.
and government, the impact of climate change and global health and hunger relief. Visit www.
(9 - 10 May) • Pan Pacific Association Business Congress (3 - 6 June) • Chartered Institute of Management Accountants (CIMA) Global Challenge (26 – 30 August) • 59th Commonwealth Parliamentary Association Congress (28 August - 6 September)
oneyoungworld.com for more details.
• 26th International Council of Management
this year for the annual meeting of the Board
This year, the City of Johannesburg’s
• World Agility Championships
of Directors of the Metropolis organisation.
Department of Economic Development is
The meeting of Metropolis will be the most
also organising the first Buy Sell Invest Visit
important gathering yet of representatives
Conference and Expo in April 2013.
Mayors and decision-makers from the world’s largest cities will converge in Johannesburg
Consulting Institutes (23 - 28 September) (10 – 13 October) • WADA (World Anti Doping Agency) Congress (9 - 6 November).
BRICS SUMMIT PUBLICATION / PAGE 99
PROVINCES
KWAZULU-NATAL KwaZulu-Natal is one of the country’s most popular holiday destinations. This verdant region includes South Africa’s lush subtropical east coast.
Washed by the warm Indian Ocean, it stretches from Port Edward in the south, and northwards to the Mozambique boundary. In addition to the magnificent coastline, the province also boasts sweeping savanna in the east, and the majestic Drakensberg mountain range in the west. Visitors to KwaZulu-Natal can disembark at the King Shaka International Airport, which opened in April 2010. Alternatively, they can make use of the extensive national road network. The forestry, wood and wood products sector enables KwaZuluNatal to participate in various associated businesses such as furniture-making. TOURISM Also known as the Zulu Kingdom, KwaZulu-Natal is a combination of natural wonders, fascinating culture and ultramodern facilities. Durban’s Golden Mile skirts the main beaches of the Indian Ocean. Drawcards include an amusement centre, paddling pools, paved walkways and fountains. Key attractions • The uShaka Marine World theme park comprises an oceanarium, dolphinarium and oceanographic research institute situated on Durban’s Point. • Spot dolphins or laze the days away on the coastline between the Umdloti and Tugela rivers – the Dolphin Coast. • The Hluhluwe-Umfolozi Park, one of the largest gameparks in South Africa, is home to the Big Five, as well as cheetah and wild dogs.
PAGE 100 / BRICS SUMMIT PUBLICATION
PROVINCES
• The eMakhosini Valley, birthplace of King Shaka, and the
Capital: Pietermaritzburg
Valley of Zulu Kings give visitors insight into the Zulu nation’s history and culture.
Principal languages: isiZulu 80,9%
• The iSimangaliso Wetland Park is one of the highest forested dunes in the world, and has an abundance of fish
English 13,6% Afrikaans 1,5%
and birds. Population: 10 267 300 (Census 2011) • The Royal Natal National Park offers many scenic highlights, including the Amphitheatre, Mont-aux-Sources
% share of the total population: 19,8%
and the Tugela falls. Area: 92 100 km2 • The Battlefields Route in northern KwaZulu-Natal has the highest concentration of battlefields and related military
% of total area: 7,6%
sites in South Africa. (Acknowledgement: Pocket Guide to South Africa, Published by the • Every year around June or July, millions of sardines
Government Communication and Information System)
leave their home on the Agulhas banks and move up to the coast of Mozambique. Thousands of dolphins, Cape gannets, sharks and game fish follow the “sardine run” northwards.
WEBSITE: www.kznonline.gov.za
BRICS SUMMIT PUBLICATION / PAGE 101
PROVINCES
LIMPOPO Taking its name from the mighty Limpopo River, this is South Africa’s northernmost province. Mining is a large part of the economy, as is tourism and the cultivation of subtropical fruits.
Named after the Limpopo River that flows along its northern border, the province is rich in wildlife, spectacular scenery and a wealth of historical and cultural treasures. This province is in the Savanna Biome, an area of mixed grassland and trees, which is generally known as bushveld. The province’s natural resources include more than 50 provincial reserves, as well as several private game reserves. The largest section of the Kruger National Park is situated along the eastern boundary of Limpopo with Mozambique. TOURISM Limpopo is well endowed with cultural diversity, historical sites and tourist attractions, and is an excellent destination for getaway-from-it-all luxury holidays in the bush. Key attractions • The Mokopane vicinity has several nature reserves. The Arend Dieperink Museum offers a fine cultural-historical collection, while the Makapan caves are famous for their fossils. The Makapan Valley is the only cultural-heritage site of its kind. It reflects the history of the Ndebele people and resistance wars
PROVINCES
dating back 151 years. The fossil hominid sites of Sterkfontein include Makapan Valley.
Capital: Polokwane
• With its outstanding game reserves, the Thabazimbi district is one of the fastest-growing ecotourism areas in South Africa.
Principal languages: Sesotho sa leboa 52,1% Xitsonga 22,4% Tshivenda 15,9%
• Bela-Bela is well known among South Africans, and increasingly foreigners, for its hot-water springs, fun water slides and scenery.
Population: 5 404 868 (census, 2011) % Share of the total population: 10,98%
• The Waterberg mountain range is rich in indigenous trees, streams, springs, wetlands, birdlife and dramatic vistas. • The Modjadji Nature Reserve, north of Tzaneen, is named after the legendary rain queen, Modjadji, who inspired Rider Haggard’s She.
Area: 123 910 km2 % of total area: 10,4% (Acknowledgement: Pocket Guide to South Africa, Published by the Government Communication and Information System)
• Phalaborwa has one of the country’s top-rated golf courses – just watch out for animals on the fairways. • The Schoemansdal Voortrekker Town and Museum, a short drive west of Makhado, are built on the site of an original Voortrekker village and depict their lifestyle in the mid-18th century.
WEBSITE: www.limpopo.gov.za
BRICS SUMMIT PUBLICATION / PAGE 103
PROVINCES
MPUMALANGA Mpumalanga means “Place Where the Sun Rises”. Due to the province’s spectacular scenic beauty and abundance of wildlife, it is one of South Africa’s major tourist destinations.
The area has a network of excellent roads and railway connections, making it highly accessible. Because of its popularity as a tourist destination, Mpumalanga is also served by a number of small airports, such as the Kruger Mpumalanga International Airport. Mbombela (Nelspruit) is the capital of the province, and the administrative and business centre of the Lowveld. Other important towns are eMalahleni (previously Witbank), Standerton, Piet Retief, Malelane, Ermelo, Barberton and Sabie. Mpumalanga falls mainly within the Grassland Biome. The escarpment and the Lowveld form a transitional zone between this grassland area and the Savanna Biome. TOURISM Mpumalanga lies in the north-eastern part of South Africa, bordered by Mozambique to the east and the Kingdom of Swaziland to the south-east. Scenic beauty and wildlife are abundant. Key attractions • Historical sites and villages, old wagon routes and monuments mark the lives of the characters who came to Mpumalanga seeking their fortune. The town of Pilgrim’s Rest is a living monument reflecting the region’s gold-fever period. • The Blyde River Canyon Nature Reserve near Graskop has striking rock formations and a rich diversity of plants. • Within the Blyde River Canyon Nature Reserve, the Bourke’s Luck potholes were formed by river erosion and the action of flood water. The spectacular Blyde River Canyon is a 26-km long gorge carved out of the face of the escarpment. It is the world’s thirdlargest canyon and the only green canyon.
PAGE 104 / BRICS SUMMIT PUBLICATION
PROVINCES
• The region includes the southern section of the Kruger National Park, which draws a million visitors yearly. • An annual frog-watching festival is held at Chrissiesmeer, South Africa’s largest freshwater lake. • Dullstroom is popular with trout- and fly-fishing enthusiasts.
Capital: Mbombela (Nelspruit) Principal languages: siSwati 30,8% isiZulu 26,4% isiNdebele 12,1% Population: 4 039 939 (Census, 2011) % share of the total population: 7,8% Area: 79 490 km2 % of total area: 6,5% (Acknowledgement: Pocket Guide to South Africa, Published by the Government Communication and Information System)
WEBSITE: www.mpumalanga.gov.za
BRICS SUMMIT PUBLICATION / PAGE 105
PROVINCES
NORTHERN CAPE The Northern Cape, the largest and least populated of South Africa’s nine provinces is famous for its diamonds. An extensive fishing industry occurs on the Atlantic coast.
The Northern Cape is the largest province in South Africa, (slightly bigger than Germany) – taking up almost a third of the country’s total land area. The province is noted for its San rock art, diamond diggings, 4x4 safaris and the Kgalagadi Transfrontier Park. It is a vast stretch of semi-desert land. The distance from the capital, Kimberley, on the eastern border to Springbok in the west, is more than 900 km. It is a large, dry region of fluctuating temperatures and varying topographies. The Northern Cape lies to the south of the Orange River, which provides the basis for a healthy agricultural industry. Away from the Orange, the landscape is characterised by vast arid plains with outcroppings of rock piles. The province is renowned for its spectacular display of spring flowers, which, for a short period every year, attracts thousands of tourists. Agriculture is one of the mainstay sectors of the Northern Cape’s economy and is therefore critical in economic planning.
TOURISM The Augrabies Falls National Park, with its magnificent falls pressing through a narrow rock ravine, remains the main attraction of the Northern Cape. Game drives reveal a variety of birdlife and animals such as klipspringer, steenbok, wild cats and otters.
Key attractions • The Kimberley Mine Museum is South Africa’s largest fullscale open-air museum. Underground mine tours are a big attraction. The Freddy Tate Golf Museum at the Kimberley
PAGE 106 / BRICS SUMMIT PUBLICATION
PROVINCES
Golf Club was the first golfing museum in Africa. The Kimberley Ghost Trail has become a popular tourist attraction.
WEBSITE: www.northern-cape.gov.za
• The Robert Sobukwe House in Galeshewe was once the residence of Sobukwe, an important figure in South African history and a major role player in the rise of African political consciousness. • The Orange River Wine Cellars Coop in Upington offers wine-tastings and cellar tours. The South African Dried Fruit Cooperative is the second-largest in the world. • Moffat’s Mission in Kuruman is a tranquil place, featuring the house of missionary Robert Moffat, whose son-in-law was explorer David Livingstone. • Namaqualand, the land of the Nama and San people, puts on a spectacular show in spring when its floral splendour covers vast tracts of desert in a riot of colour. • A cultural centre at Wildebeestkuil outside Kimberley features !Xun and Khwe artwork for sale and a tour of rock engravings by these indigenous people. • The 100-m high, 9-km long and 2-km wide white sand dune at the Witsand Nature Reserve near Postmasburg should not be missed.
Capital: Kimberley Principal languages: Afrikaans 68% Setswana 20,8% isiXhosa 2,5% Population: 1 145 861 (Census, 2011) % share of the total population: 2,2% Area: 361 830 km2 % of total area: 29,7% (Acknowledgement: Pocket Guide to South Africa, Published by the Government Communication and Information System)
BRICS SUMMIT PUBLICATION / PAGE 107
NORTHERN CAPE The Northern Cape Diamond Strategy is a mineral beneficiaty strategy that aims to transform and diversify the Northern Cape provincial economy through diamond and jewellery beneficiation by developing scarce industry skills, creating job opportunities and capacitating potential entrepreneurs.
N ORTHERN C APE D IAMOND S TRATEGY
The intent of the diamond strategy is to localise maximum benefit of the diamond pipeline and to render services to enable Africa to fulfil its socioeconomic responsibilities. The objective is to establish a Centre of Excellence for:
SwiftPrint, 57686
• Diamond Cutting and Polishing • Jewellery Manufacturing • Industry Related Services
Private Bag X6108, Kimberley, South Africa, 8300 TEL: +27 (0)53 839 4067 • FA X: +27 (0)53 831 1141 Contact Felicity Links - E-mail: flinks3@gmail.com
DIAMOND STRATEGY K IMBERLEY D IAMOND AND J EWELLERY H UB The purpose of the Hub is to create a competitive advantage for local beneficiation in an incentivised area that will attract local and foreign beneficiators who will cut and polish diamonds and manufacture jewellery for export and local markets. The Hub will provide the industry with an internationally competitive, serviced, secure and incentivised facility in Kimberley. Investment Opportunities Kimberley International Diamond and Jewellery Academy • To establish a Research, Technology and Innovation centre • To establish a Diamond and Jewellery incubation centre • Joint venture partnerships in terms of specialist trainers (master cutters) Kimberley Diamond and Jewellery Hub • Cutting and Polishing for export and local markets • Jewellery manufacturing for export and local markets • Diamond Trading • Diamond and Jewellery related services
www.experiencenortherncape.com
NORTHERN CAPE According to the latest Merrill Lynch and Capgemini annual report, sub-Saharan economies are currently amongst the fastest growing in the world. The Northern Cape Province is the largest province in South Africa and offers create investment opportunities in various thriving industries, including mining and mineral processing, agriculture and agro-processing, fishing and mariculture, manufacturing and value-added processing. It is located in the western part of South Africa and borders in the north-west with Namibia. It consists of five district municipalities and 26 local municipalities. The geo-graphical area of the province is 362 591.41square kilometres, covering just over 30% of South Africa. MINING AND MINERAL PROCESSING The vibrant mining and agricultural industries in the Northern Cape are the dominant economic contributors with the mining sector responsible for 26,1% of the provincial GDP, while the agricultural sector remaining the biggest employer and generating 7,4% of the GDP for the Northern Cape. The vast mineral wealth of the Northern Cape continues to create extensive development and mineral beneficiation opportunities with major mining expansion on the cards for the John Taolo Gaetsewe district. In the previous financial year, the province allocated R26-million to the development of the Kimberley Diamond and Jewellery Hub. Kimberley remains the diamond capital of the country with 95% of diamond production passing through the city and almost all of South African alluvial diamond mining activities take place within a 200km radius of the City of Diamonds. The recent opening of the Kimberley International Diamond and Jewellery Academy promises to have huge ramifications for the industry, both in terms of job creation and economic growth. The Northern Cape boasts significant percentages of the world’s total lead, iron ore and manganese deposits. Huge beneficiation and value-added production opportunities exist within the province in this sector, ranging from diamond cutting and jewellery manufacturing to iron reduction plants, establishing steel mills and various metal smelters. INVESTMENT OPPORTUNITIES • Manufacturing and processing of raw mining materials such as lead, iron, manganese, copper diamonds, gemstones, iron ore and granite • Beneficiation of precious and semi-precious stones and minerals for diamonds, Tiger’s Eye, sugilite, topaz, rose quartz, jasper, chrysoberyl, amethysts, agate, amazonite and picture stones. • Diamond cutting and polishing as well as jewellery manufacturing.
SwiftPrint, 57686
RENEWABLE ENERGY In line with the national government’s priority to a green economy, renewable energy presents numerous exciting investment prospects. The province is actively exploring alternative sources of energy, specifically centred around solar, wind and nuclear sources. Plans are already underway to build a massive solar park capable of generating 8% of the country’s electricity needs near Upington. A pre-feasibility study has found that South Africa has one of the best solar resources on the planet and this solar park could change the region’s economic landscape from reliance on agriculture and mining to include other sectors such as renewable energy and the manufacturing of solar-related components. It is already estimated that this initiative could generate up to 800 permanent jobs and 3000 temporary construction jobs, which could positively counteract unemployment in the province.
Private Bag X6108, Kimberley, South Africa, 8300 TEL: +27 (0)53 839 4067 • FA X: +27 (0)53 831 1141 Contact Felicity Links - E-mail: flinks3@gmail.com
A LAND OF OPPORTUNITIES INVESTMENT OPPORTUNITIES AGRICULTURE AND AGRO-PROCESSING The vibrant agricultural and agro-processing industries also offer viable development scenarios in the food processing sector, irrigation development, crops and product range expansion for export and niche markets. The fishing and mariculture industries also present an ideal environment for growth and investment as the west coast of the Northern Province offers favourable biological conditions, excellent shore-based infrastructure and a strong research and development base for potential ventures. TRADE AND INVESTMENT OPPORTUNITIES: HIGH IMPACT PROJECTS • Upington Cargo Hub • Port Nolloth Deepwater Harbour • Upington Airport Moth Balling • Port Nolloth and Hondeklip Bay Harbour and Fishing Projects
• Adventure Sport • Bloodhound • SKA - Meerkat • Upington Solar Park - Renewable Energy • Rooibos Tea Plantation
TOURISM DEVELOPMENT The Northern Cape provincial government has also identified the vibrant tourism sector as one of huge potential growth and has implemented strategies to expand their domestic and international markets as well as increasingly appealing to the adventure sports travellers and eco-tourists. The Northern Cape provincial government has specifically addressed destination enabling conditions by improving infrastructure, investing in training and development of tourism service providers, setting stringent service standards and developing new tourism routes. The infrastructure of the province offers easy aerial access with two centrally located airports, including the Upington International Airport with one of the longest runways in the world and Kimberley airport. Direct flights are available, which are extremely important for chartered flights and incentive groups. The province has a wellestablished national road network linking major access routes from the Western Cape and Gauteng to neighbouring countries Namibia and Botswana. INVESTMENT OPPORTUNITIES • Further development at Vanderkloof Dam Nature Reserves, including Rolfontein, Doringkloof as well as Namaqualand Provincial Nature Reserve and Wildebeeskuil Rock Art Centre • Tourism development opportunities at seven potential tourism clusters centred around culture, space, oasis, diamonds, outdoor adventures, rivers, grapes, the Atlantic ocean and wild flowers.
www.experiencenortherncape.com
PROVINCES
WESTERN CAPE The Western Cape’s natural beauty, complemented by its hospitality, cultural diversity, excellent wine and colourful cuisine, make the province one of the world’s greatest tourist attractions.
Cape Town, the legislative capital, is one of the world’s most beautiful cities and is a must-see for tourists. Other important towns in the province include Worcester and Stellenbosch, known for their winelands; George, renowned for indigenous timber and vegetable produce and for its world-class golf courses; and Oudtshoorn, known for its ostrich products and the celebrated Cango caves.
TOURISM The Western Cape continues to be one of the destinations most favoured by foreigners. Some attractions in Cape Town are: • the Victoria and Alfred Waterfront • the Company’s Gardens • the District Six Museum • the houses of Parliament and the South African National Gallery • a boat trip to Robben Island, the place where former President Nelson Mandela spent most of his 27 years in jail. Table Mountain is a popular site for visitors and provides a majestic backdrop to the vibrant and friendly “Mother City”. The top of the mountain can be reached by an ultramodern cableway. Cape Point, part of the Table Mountain National Park, offers many drives, walks, picnic spots and a licensed restaurant. The park has a marine protected area encompassing almost 1 000 km2. Newlands is home to Kirstenbosch National Botanical Garden. Hout Bay is well known for its colourful working harbour, seafood outlets, round-the-bay trips to the nearby Seal Island, and a harbour-front emporium that attracts many visitors. The Cape winelands feature dramatic mountains, rolling farmlands and peaceful vinyards. They are home to Rout 62, the world’s longest wine route in the Western Cape.
PAGE 112 / BRICS SUMMIT PUBLICATION
PROVINCES
Capital: Cape Town Superb accommodation is available in historic towns such as Paarl, Stellenbosch and Franschhoek, as well as on
Principal languages:
many estates and farms.
Afrikaans 55,3% isiXhosa 23,7%
GARDEN ROUTE
English 19,3%
The Garden Route has well-developed tourist
Population: 5 822 734 (Census, 2011)
infrastructure, spectacular scenery and a temperate climate, making the region popular all year round.
% share of the total population: 10,45%
Key attractions
Area: 129 370 km 2
• The city of George is at the heart of the Garden Route and the mecca of golf in the southern Cape. It is home
% of total area: 10,6%
to the renowned Fancourt Country Club and Golf Estate.
(Acknowledgement: Pocket Guide to South Africa, Published by the Government Communication and Information System)
• Knysna, nestling on an estuary, is one of South Africa’s favourite destinations, known for its indigenous forests, lakes and beaches. • Just 29 km from Oudtshoorn, the ostrich-feather capital of the world, at the start of the Cango Valley, lie the Cango caves, the only show caves in Africa that offer a choice of tours in various languages. The remarkable caves are a series of 30 spectacular subterranean limestone caverns. The cave system is 5,3 km long.
WEBSITE: www.westerncape.gov.za
CENTRAL KAROO The Central Karoo forms part of one of the world’s most interesting and unique arid zones. This ancient, fossil-rich land, with the richest desert flora in the world, also has the world’s largest variety of succulents.
Key attractions • Matjiesfontein, a tiny railway village in the Karoo, offers tourists a peek into the splendour of colonial Victorian South Africa. • Prince Albert is a well-preserved town, which nestles at the foot of the Swartberg mountains. The Fransie Pienaar Museum offers interesting cultural-history displays, a fossil room and an exhibit of gold-mining activities in the 19th century. • The museum in Beaufort West, birthplace of heart surgeon Prof. Chris Barnard, depicts the story of the world’s first heart transplant. • The Karoo National Park on the outskirts of the town is also worth a visit.
BRICS SUMMIT PUBLICATION / PAGE 113
PROVINCES
NORTH WEST North West lies in the north of South Africa, on the Botswana border, fringed by the Kalahari desert in the west, Gauteng to the east, and the Free State to the south. It is known as the “Platinum Province” for the wealth of the metal it has underground.
The province boasts a year-round sunny climate, exciting wildlife destinations such as the Pilanesberg National Park and Madikwe Game Reserve, various cultural and historical attractions, as well as popular tourist destinations such as Sun City. North West is centrally located on the subcontinent with direct road and rail links to all southern African countries, and with its own airport near the capital city, Mahikeng (previously Mafikeng). Most economic activity is concentrated in the southern region (between Potchefstroom and Klerksdorp), Rustenburg, and the eastern region, where more than 88,3% of gross domestic product per region of the province is generated.
TOURISM The province abounds with attractions, including wild animals and fun nights at the famous Sun City and Lost City resorts, which offer, among other things, gambling, golf and an artificial sea.
Key attractions • The Historic Route of Mahikeng includes the town of Mahikeng, which was besieged by the Boers during the Anglo-Boer/South African War. • The Groot Marico region, mampoer (moonshine) country, is associated with author Herman Charles Bosman. • The Hartbeespoort Dam and surrounds are popular for weekend outings, yachting and golf. • The Pilanesberg National Park is situated in the transition zone between the Kalahari and the Lowveld. It is home to the Big Five, an abundance of animals and over 300 bird species. It is the fourth-largest park in South Africa.
PAGE 114 / BRICS SUMMIT PUBLICATION
PROVINCES
• The Taung Skull Fossil Site is an extension of the Sterkfontein hominid sites. The site marks the place where the celebrated Taung skull – a specimen of the species Australopithecus africanus – was found in 1924. • Madikwe Game Reserve, one of South Africa’s largest game reserves, is home to 66 large mammal species, including the Big Five, and about 300 resident and migrant bird species.
Capital: Mahikeng Principal languages: Setswana 65,4% Afrikaans 7,5% isiXhosa 5,8% Population: 3 509 953 (Census, 2011) % share of the total population: 6,8% Area: 116 320 km2 % of total area: 9,5% (Acknowledgement: Pocket Guide to South Africa, Published by the Government Communication and Information System)
WEBSITE: www.nwpg.gov.za
INVEST in NORTH WEST
INVEST NORTH WEST
SOUTH AFRICA
... the heartbeat of trade and investment “Invest North West is the Trade and Investment Promotion agency for the North West Province, focusing on investment promotion, trade and investment facilitation and by providing business retention and expansion services.”
t: 014 594 2570 • f: 014 594 2575 • www.inw.org.za • po box 6352, rustenburg, 0300
Invest North West Company profile Invest North West Company profile
Invest North West, the official trade and investment promotion agency for the North West Province, invites you to invest Invest NorthAfrica’s West, the official tradeprovinces. and investment promotion agency for North West Province, invites you tothe invest in one of South fastest growing Join other international andthe local major corporations by choosing in West one ofProvince South Africa’s growing provinces. Join new otherbusiness international andorlocal majorincorporations choosing the North as the fastest preferred destination for your venture to invest many of thebyrewarding North West Province as the preferred destination new business venture or to invest in many of the rewarding investment opportunities available in various sectors offor theyour economy. investment opportunities available in various sectors of the economy. The passionate and dedicated staff at Invest North West provide vision and direction to key growth sectors within the TheWest passionate and dedicated at Invest North West provide vision and direction to keybusiness growth sectors within North by focusing on trade staff and investment facilitation, and the provision of proactive retention and the North services West by to focusing on trade investment facilitation, expansion established local and international businesses. and the provision of proactive business retention and expansion services to established local and international businesses. Committed to providing the highest standard of service, the following services are provided to new and existing Committed providing the highest standard of service, the following services are provided to new and existing investors in the to province: investors in the province: • Identifying and packaging viable investment opportunities • Identifying and packaging • Facilitating joint-venture and viable equity investment partnershipsopportunities • Facilitating joint-venture and equity partnerships • Providing information on financing options and investment incentives • Providing information on financing options and investment incentives • Providing advice on feasibility studies and business plans • Providing advice feasibility studies and business • Assisting investors to on obtain work and business permits plans • Assisting investors obtain work and land business permits • Providing assistance in to obtaining suitable or factory space • Providing assistance obtaining • Assisting existing firms toinexpand andsuitable reinvestland or factory space • Assisting existingtofirms expand and reinvest • Assisting companies find to export markets for their products • Assisting companies to find export products • Promote products from the North Westmarkets Provincefor to their increase exports • Promote productsconditions from the North West Province to increase exports • Advocate investment and environment conducive to growth • Advocate investment conditions and environment conducive to growth Visit our website to learn of available investment opportunities in the North West Province and to subscribe to our Visit our website to learn of available investment opportunities in the North West Province and to subscribe to our quarterly e-newsletter: www.inw.org.za quarterly e-newsletter: www.inw.org.za
Invest North West – the heartbeat of trade and investment. Invest North West – the heartbeat of trade and investment.+27 14 594 2570
+27 14 594 2570
EDITORIAL CONTRIBUTION
Invest in the
North West Province, South Africa
T
he North West province of South Africa is characterised
Its location is one of the North West province’s greatest natural
by the perfect blend of rich stretches of fertile soil fit for
advantages. The North West province is bordered by Botswana to
livestock, crop farming and agri-business and the bustle
the west and nestled against Gauteng to the east. The N4 highway
of our main centra where mining, manufacturing and the
runs through the North West province and forms part of the Maputo-
services sector abound.
Walvis Bay corridor connecting these ports and thus the east and west coasts of southern Africa. The North West province is therefore centrally located within the Southern African Development region due to its strategic location, and offers great access for trade and exports into the African continent. During 2012, the North West province identified 10 key projects which have the potential to set the province on a steady growth path through industrialisation. The 10 projects have been identified for the strategic investment opportunities they offer, for their high comparative advantage and the high growth performance indices of the identified sectors. The North West province invites investors, especially those seeking public-private partnerships to engage with the province on the opportunities that exist for investing in the 10 projects of infrastructure development; cattle beneficiation; maize milling; a mining supply park; and six sector development zones in metal fabrication, automotive components, platinum beneficiation, plastics and chemicals, the electronic sector and the business processes services sector. I wish all BRICS Summit delegates and exhibitors a glorious and fruitful stay in our beautiful country. We look forward to welcoming
We invite the serious investor to explore the many pioneering opportunities
you in the North West province in the near future.
that are ready for the taking in the North West province – a province of rich potential and untapped opportunities in the sectors of manufacturing, mining and mineral beneficiation, tourism, information technology,
MOJALEFA NALE
agriculture, agribusiness, infrastructure development and renewable energy.
ACTING CEO INVEST NORTH WEST
PAGE 118 / BRICS SUMMIT PUBLICATION
Albert Luthuli International Convention Centre, Durban, KwaZulu-Natal Image courtesy of MediaClubSouthAfrica