Back on 20-June-2017, we discussed the investment environment in South Africa. In that post, we gave a bit of background on the country.
Republic of South Africa (RSA), as the name implies, is the southernmost country in Africa. It is bounded on the south by 1740 miles of coastline facing the South Atlantic and Indian Oceans. It lies in the middle of a strategic trade route between Asia and the Americas. As a result of its location, weather, natural resources, and ingenuity of its people, RSA is the second largest economy after Nigeria and most diversified economy on the African continent.
South Africa is governed as a parliamentary republic and the President is the head of state and the head of the government much like the President of the United States. Like the UK, the President serves at the confidence of the Parliament. The National Assembly, the lower house of Parliament, consists of 400 members who are elected to 5-year terms. The National Council of Provinces, the upper house, consists of 90 members. Each of the 9 provinces elects 10 members to this house, 6 of which are permanent and 4 of which are “special” who hold their position for limited terms.
South Africa is famous for being a natural resource-based country and the largest gold producer in the world. Agriculture is a big contributor as it provides about 10% of the jobs in the country. While GDP per capita is relatively high compared to its neighbors at over $12,000 on a purchasing power parity basis, it also ranks in the top 10 countries in the world for income inequality. This is where the economic risk and opportunities lie in the country. Sometimes governments do things that help a country develop as they meet those challenges. A good example is Singapore. When the island nation split for Malaysia, it was little more than a swamp. Now Singapore is one of the richest countries in the world per capita. Sometimes the governments make things worse. A good example is Zimbabwe, a country that was once prosperous and the breadbasket of Africa and now a huge importer of food and is famous for its bouts of hyperinflation.
