Bussines in South Africa
In 2008, the economy grew by 3.1 per cent, well below the average 5 per cent rate of the previous three years. The slowing of economic
activity was the result of several negative factors: unprecedented power shortages; the hike in global oil and food prices in the first
six months of the year; the slow-down of private consumption; and the decline in foreign investment and in exports due to
the world financial crisis. Growth is expected to drop further to 1.1 per cent in 2009 due to continued contraction of domestic demand.
It is anticipated to rebound to 3.5 per cent in 2010, however, thanks to the stimulus expected from the football World Cup.
The construction sector is booming because of infrastructure projects under way in transport and electricity, and projects related to
the hosting of the soccer 2010 World Cup, including several new stadiums and hotels. On the other hand, residential building has suffered
from higher mortgage interest rates and declining demand. Overall, construction grew by 14 per cent in 2008, after a 17.1 per cent growth
in 2007, and is expected to remain dynamic in the coming years.
Reforms to encourage employment
While South Africa's economy had started to show signs of recovery, Patel conceded that regulatory reforms that encouraged employment were needed.
The recession took a heavy toll on South Africa's economy, with some 870 000 people losing their jobs in 2009 and households suffering from falling
incomes and high levels of debt. The domestic economy contracted by an estimated 1.8% in 2009 as a result of a decline in consumption spending
and weak investment growth.
"What started as a financial crisis rapidly spread to the real economy and impacted on jobs," Patel said. "Real GDP fell by 1.8% in 2009
but is expected to start growing to 2.3% this year, rising to 3.6% in 2011."
Patel said recovering the jobs lost in 2009 would require a major improvement in the employment performance of the economy, with a focus on
decent work opportunities and "better social outcomes".
FNB, PayPal bring e-commerce closer
In a boost for local e-commerce, a new partnership between First National Bank and PayPal will enable South Africans to sell to PayPal's
global customer base and move the proceeds to their qualifying FNB accounts - without having to share their personal or
financial information online.
The service also allows customers to top up and withdraw funds to their qualifying FNB accounts from their PayPal accounts.
PayPal has more than 81-million accounts in 190 markets around the world.
"Our agreement with PayPal also enables international businesses and individuals to transact with South African service providers via
a secure and convenient payment service", FNB chief executive Michael Jordaan said in a statement this week, adding that it would help
South Africans to join the global e-commerce marketplace.
"The exclusive top-up and withdraw service with PayPal allows South Africans to make payments and receive money internationally without
sharing their financial or personal information."
One CEO's Formula for Doing Business in South Africa
Batswadi Pharmaceuticals CEO Christoper Whitfield
Starting a business here is not without challenges. Whitfield broke down two issues an African American entrepreneur should be aware
of before doing business in South Africa:
Lack of access to capital.
This one sounds familiar to all of us, but remember that in the US there are options, even if they're not
necessarily available to you. A biotech company in the US can list on the Nasdaq and generate interest from venture capitalists.
That VC environment simply doesn't exist in South Africa. While the government works to seed fund certain projects,
they can only seed them to a certain point. Beyond that, you have to find commercial support - a loan or some friends and family love.
Bank loans (if you can get one) carry a degree of risk. Case in point, Whitfield's first venture, needed 40 million rand
(roughly $5.5 million) loan. When the credit crunch hit, that loan became unaffordable because the interest rates climbed.
So Batswadi had to rely on organic growth as opposed to venture capital.
Access to technology.
Whitfield says South Africans have incredible technology, but it's just a matter of finding ways of
getting that tech from the lab to implementation.
But there are benefits too. The pharmaceutical market in South Africa is $3.5 billion, says Whitfield. And the landscape isn't
nearly as cluttered as in more developed countries. He also feels that the clinical business can capture a significant
chunk of that billion dollar industry.
what challenges business men facing in South Africa?
South Africa Business comments
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Being business man in South Africa is not easy. You are always worry about your security. You can not trust local people and local business man. The game over here be alert or you will lose your money or your life.
Sebastioa Matondo, Angola
There're lot of challenge a business man facing in South Africa. Advice be prepared mentaly to trade in over her.
D'asilva , Portugal
It's difficult to be business man specialy when you're black person in this country.
Piennar , South Africa
Be average black joe in South africa do business is difficult. The nepnews and nieces of ANC leaders are controling everything.
John , South
Economic of this Country is controlling buy white people. It's seems sad but if you left in hands of black greedy politiciens. They would bring it down
Malema , South Africa
We are searching for serious investors in all domaine to invest in Egypt,,please thanks to advise & to contact me,,,best regards.
Mohamed Abbas , Egypt
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