BRICS - FIFTH BRICS SUMMIT

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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

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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

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•

•

•

•

•

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.

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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

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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.

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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

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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

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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.

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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

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Aircraft manufacturing and assembly

Ground-based air defence

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Property development and letting

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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

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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.

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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.

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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

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Albert Luthuli International Convention Centre, Durban, KwaZulu-Natal Image courtesy of MediaClubSouthAfrica