Growth, development and modernization are at the top of by elusivelyeasy

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									South Africa                                                                                                                                           Alive with possibility
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COUNTRY PROFILE                                     ASTABLE, PROSPEROUS DEMOCRACY, SOUTH

      AREA: 470,462 sq. miles
                                     AFRICA IS THE AFRICAN CONTINENT’S ECONOMIC

    POPULATION: 42.7 million
                                     AND MANUFACTURING POWERHOUSE AND A GATE-

       MAIN CITIES: Pretoria
                                     WAY TO TRADE AND INVESTMENT OPPORTUNITIES
  (administrative center); Cape
      Town (legislative center);
  Bloemfontein (judicial center),
       Durban, Johannesburg

      GDP: $160 billion (2003).
      Growth Rate: 1.9 percent
                                     Growth, development and
        (2003 est.) Per Capita:
       purchasing power parity
       US$10,700 (2003 est.)
                                     modernization are at the
     NATURAL RESOURCES:
     gold, chromium, antimony,
     coal, iron ore, manganese,
         nickel, phosphates, tin,
                                     top of the agenda
       uranium, gem diamonds,
  platinum, copper, salt, natural                          s South Africa begins its     African National Congress (ANC) adminis-




                                     A
                             gas                           second decade of democ-       tration’s agenda, as it works to raise the
                                                           racy, the national mood       rate of investment in the country and reduce
        INDUSTRIES: mining,                                remains buoyant and pos-      the cost of doing business.
         automobile assembly,                              itive. There is a continu-        Particular attention is being paid to en-      Johannesburg is Africa’s most power ful commercial center—almost 75 percent of South African firms have their headquarters there
      metalworking, machinery,                             ing sense of optimism,        couraging the further growth of small, medi-
         textile, iron and steel,                          with opinion polls show-      um and micro enterprises (SMMEs), and              year marked an increase in real gross do- Incentives include zero rating for value
           chemicals, fertilizer,                          ing that up to 90 percent     to empowering sectors of the community             mestic product for the twenty-third con- added tax (VAT) on exports of goods and
                       foodstuffs                          of the population believe     that have hitherto been marginalized. The          secutive quarterly period—the longest pe- services and relief from various customs
                                                           the country is going in the   government is committed to a vigorous im-          riod of uninterrupted quarter-to-quarter and excise duties, and there are special
  MAIN EXPORTS: gold, other                                right direction. Business     plementation of policies of urban renewal          growth since the data became available tax benefits for investors in strategic in-
          minerals and metals,                             and consumer confidence       and rural development through an ex-               in 1960.                                         dustrial projects.
   agricultural products, motor      are reported to be at their highest levels          panded public works program aimed at                   According to the South African Reserve           South Africa’s infrastructure is modern
             vehicles and parts      since the 1980s.                                    creating one million jobs and to the ex-           Bank, the country’s central bank, the tra- and efficient and among the best on the
                                        Since the end of apartheid in 1994, South        pansion of micro-credit.                           jectory of growth has steepened noticeably African continent, making it an excellent
     MAIN DESTINATIONS OF            Africans have embraced economic, politi-                 “Our aim is to involve more and more          since the second quarter of 2003, with base for accessing regional and interna-
    EXPORTS: UK, US, Japan,          cal, and social freedom with enthusiasm.            people in economic activities,” says Minister      each quarter's growth rate being higher than tional markets. The selection of the coun-
         Germany, China, Italy       After the huge progress made over the               of Trade and Industry Mandisi Mpahlwa.             the one preceding it.                            try by FIFA as the venue for the 2010
                                     past ten years, the economy is moving to-           “That means giving people skills, enabling             Higher economic output has been stim- Soccer World Cup is prompting a new look
     This Sponsored Section is       ward a higher trajectory of growth and de-          them to start small and medium enterpris-          ulated by lower interest rates, the gov- at the transport system.
produced by InterCom Ltd and         velopment. Freed from the shackles of a             es and solving the problems of access to           ernment’s prudent fiscal policy, and high-           “This opportunity will help us to pump
   did not involve the reporting     politicized economy designed to benefit             finance. We are growing the size of our            er international prices for commodities. money into infrastructure development
         or editorial staff of the
  International Herald Tribune.      only a minority of the population, today’s          economy, opening up more and more op-              Export volumes have risen                                         and expand our transport
                                     South Africa is firmly focused on inclusion,        portunities, and in that way we will be able       considerably, with growth           Lower interest rates,         networks,” says Minister
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12, St James Square, London          empowerment, and equity.                            to achieve true empowerment which is in-           in mining exports led by                                          of Transport Jeff Radebe.
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                                     petitiveness, and improved production pro-              South Africa has the biggest and one of        creased foreign demand               higher international         ing the national logistical
       www.intercom-ltd.com          vide a strong foundation for the future.            the most diverse economies on the African          for the country’s manu-                                           system by improving the          PRESIDENT THABO MBEKI says his second
                                     President Thabo Mbeki, who returned to of-          continent. GDP is forecast to increase grad-       factured products.                 prices have pushed the         links between rail, road,        term will bring even greater advances
           DIGITAL VERSION:
www.nytimes.com/global/southafrica
                                     fice in April for his second five-year term af-     ually over the next few years. In the first half       Alec Erwin, Minister of        economy onto a higher          airports, and seaports.
                                     ter the country’s successful third round of         of this year the economy grew by more than         Public Enterprises, says,                                             South Africa has good        new permanent seat of the Pan African
   Commercial Management:
            Virginia Cortavitarte    democratic elections, has promised “even            3 percent, with expansion in sectors across        “There are not many na-
                                                                                                                                                                                 trajectory of growth         relations with its region-       Parliament (PAP).
 Editorial Content: Olav Adami       greater advances.” Growth, development,             the board, from agriculture and manufac-           tions around with a track                                         al neighbors and is a key            Wiseman Nkuhlu, Chairman of
                                     and modernization are at the top of the             turing to services. The second quarter of the      record like South Africa’s for solving prob- player in conflict resolution and moves to            NEPAD’s Steering Committee, says that
                                                                                                                                            lems, building a nation and reforming an advance African socio-economic devel-                     it is almost inevitable that South Africa
                                                                                                                                            economy. The economy has performed well opment. As President Mbeki says, his                       plays a leading role in Africa’s socio-eco-
                                                                                                                                            and will continue to grow. The important thing, country remains committed to “building a           nomic development and that investment
                                                                                                                                            as the President has said, is that we focus peaceful, democratic and prosperous                    by South African companies into neigh-
                                                                                                                                            both on the need to be highly competitive Africa.”                                                 boring countries has a positive effect.
                                                                                                                                            and on the need to eliminate poverty—that           South Africa is a fully-fledged member             “South Africa stands to benefit from
                                                                                                                                            we do not lose sight of what the job of the of the South African Customs Union                     improved stability on the continent be-
                                                                                                                                            government is, which is to improve the lives (SACU) and the Southern African                       cause it has a private sector that can
                                                                                                                                            of its people.”                                  Development Community (SADC), and                 invest in African countries,” he says.
                                                                                                                                                Foreign investment is virtually unre- during its recent tenure as chair of the                 “South African companies are moving
                                                                                                                                            stricted in South Africa with all business African Union, successfully intervened to               into Africa and acting as a kind of cat-
                                                                                                                                            sectors open. Investors benefit from a bring peace in the war-torn Democratic                      alyst, showing that you can make mon-
                                                                                                                                            competitive marketplace, an efficient busi- Republic of Congo and Burundi. It is a driv-           ey in countries like Malawi, which en-
                                                                                                                                            ness climate, low labor costs, excellent in- ing force behind the New Partnership for              courages companies from other parts of
                                                                                                                                            frastructure, and low cost electricity. African Development (NEPAD) and the                        the world to come in.”




                                                                                                                                            Focus on manufacturing as exports continue to rise
                                                                                                                                            HISTORICALLY, South Africa has relied              nology manufacturing industries are in-          ue, from just 4 percent in 1995, and have
                                                                                                                                            on primary commodities such as gold, plat-         creasingly seen as offering the greatest op-     overtaken that of South Africa’s exports of
                                                                                                                                            inum, and diamonds as its major earners            portunities for growth and job creation. In      gold.
                                                                                                                                            of foreign exchange. Today, however, val-          several specialized sectors, such as rail-           “Our exports are much more diverse
                                                                                                                                            ue-added manufactured products are mak-            way rolling stock, synthetic fuels, and min-     than they were ten years ago,” says Mandisi
                                                                                                                                            ing an increasingly significant contribution       ing equipment, South Africa is now regarded      Mpahlwa, Minister of Trade and Industry.
                                                                                                                                            to the country’s export success.                   as a world leader.                               “Gold now forms a reduced percentage of
                                                                                                                                               Expanding the base of the economy by               The automotive industry in particular has     the total because you are seeing more and
                                                                                                                                            growing the manufacturing base and de-             come a long way in the last decade. As the       more value-added manufactured products
                                                                                                                                            veloping industry is a key government ob-          leading industry in the manufacturing sec-       getting into the export basket.”
                                                                                                                                            jective. The sector has grown substantial-         tor, it contributes 6.6 percent to GDP, and           The level of exports has risen substan-
                                                                                                                                            ly and now accounts for approximately 28           at present South Africa is responsible for       tially as South Africa has become increas-
                                                                                                                                            percent of GDP.                                    approximately 84 percent of Africa’s vehi-       ingly integrated into global markets after
                                                                                                                                               Although the resources sector remains           cle output. Automotive exports have risen        decades of isolation under the former
                                                                                                                                            important, manufacturing and high tech-            to around 15 percent of total exports by val-                         Continued on Page 2



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                                                                                                                   South Africa
Land reform is a key component in the
                                                                                                                                                         portfolio represents approximately half the
                                                                                                                                                         agricultural lending of the country.
                                                                                                                                                             Land Bank has developed specific prod-
                                                                                                                                                         ucts to help new entrants into the agricul-
                                                                                                                                                                                                          Sense of national pride
development of the agricultural sector                                                                                                                   tural sector. More than 165,000 clients
                                                                                                                                                         have benefited from the bank’s micro-fi-
                                                                                                                                                         nance program since its inception in April
                                                                                                                                                         1998.
                                                                                                                                                                                                          underlies Brand South Africa
WITH a huge diversity of agricultural pro-                                                                                                                   As a 100 percent state-owned institu-        PEOPLE who visit South                                         Established in 2000 at the
duction made possible by its wide variety                                                                                                                tion answerable to the Minister of Agriculture   Africa often express their                                 initiative of President Thabo
of climatic zones, South Africa has a well-                                                                                                              and Land Affairs, Land Bank’s programs           surprise at the gap between                                Mbeki, the IMC is a private-
developed agricultural sector that provides                                                                                                              are closely aligned with the government's        the preconceptions that they                               public partnership dedicated to
for most of its domestic food needs and en-                                                                                                              key strategic objectives. One of the bank’s      had before they came and                                   promoting Brand South Africa.
ables it to export corn, wool, sugar, peanuts,                                                                                                           priorities is to increase its focus on financ-   the reality that they experi-                              Under the slogan “Alive with
tobacco, and other farm products.                                                                                                                        ing black economic empowerment within            ence when they arrive. The                                 Possibility,” its message is that
    Land reform—deracialization and re-                                                                                                                  the sector.                                      South African authorities                                  South Africa is a country to in-
distribution of wealth in the agricultural sec-                                                                                                              George Oricho, Acting CEO of Land            are so positive about what                                 vest in, to do business with,
tor—is an issue at the heart of South Africa’s                                                                                                           Bank, explains that the bank benchmarks          the country has to offer                                   to trade with, and to visit.
progress toward a more equitable and in-                                                                                                                 its performance against banks in the pri-        that they regard everyone                                      “We have incredible
clusive society. The apartheid era left white                                                                                                            vate sector. “We generate profits like any       who lives there and every-                                 achievements to showcase,”
farmers controlling more than 80 percent                                                                                                                 other institution, but then we ring-fence a      one who visits the coun-        YVONNE JOHNSTON           says Ms. Johnston. “We are
of the arable land and restricting almost 80                                                                                                             portion for development purposes. Although       try—from tourists to busi-             CEO of             boundary breakers, we don't
percent of the population to the remaining                                                                                                               we are owned by the government, we do            ness people— as a po-                 the IMC             let other people set the agen-
20 percent. The need to broaden land own-                                                                                                                not get budgetary transfers. We raise our        tential ambassador.                                       da for us, and we do it all with
ership, and at the same time to increase                                                                                                                 money from the money markets like any-              At the same time, recent research        wonderful African soul, spirit, and energy.
overall agricultural productivity, remains                                                                                                               body else, and therefore we need to con-         has shown that ten years after the birth    Above all else, we are a can-do nation, and
one of the most important challenges the                                                                                                                 tinually give an assurance to the market.”       of the Rainbow Nation more than 90          our tenacity, determination, and hunger to
country faces.                                                                                                                                               The bank recently recorded a net prof-       percent of South Africans identify          succeed allows us to take our rightful place
    The land reform program is run on a fair                                                                                                             it of R247 million ($40.6 million), compared     strongly with their country and feel        in the global village.”
price, willing-seller-willing-buyer basis, and                                                                                                           to a R1.4 billion ($226 million) loss the pre-   proud and enthusiastic about it.                The campaign is clearly working. One
the government has sought to build a con-                                                                                                                vious year. The number of loans granted             “We are especially excited by the        recent study assesses the value of the
sensus around its implementation. “That is                                                                                                               grew by 14 percent.                              new, more forward-looking approach          South African brand as being equal to
something that has been unique to South                                                                                                                      Land Bank’s activities are currently lim-    that South Africans are adopting with       those of top international companies such
Africa,” says Angela Thoko Didiza, Minister                                                                                                              ited to South Africa, however, they are like-    which to view themselves, the country       as Coca-Cola, Microsoft, and IBM.
for Agriculture and Land Affairs. “We want-                                                                                                              ly to be extended in the future. “We have        and the challenges that we face,” says      According to research by Roger Sinclair,
ed to ensure that the majority of South                                                                                                                  started to engage with the NEPAD agenda,”        Yvonne Johnston, CEO of the                 a professor at the University of the
Africans would be behind the government’s                                                                                                                says Mr. Oricho. “We will start looking to fi-   International Marketing Council (IMC),      Witwatersrand, 16 percent of the coun-
program.”                                                                                                                                                nance across the border to make resources        which has the job of spreading a posi-      try’s income is derived as a result of the
    The program has three components:                                                                                                                    available for the rest of Africa, maybe start-   tive and unified image of South Africa      strength of South Africa as a brand.
land restitution, to restore land to the vic-                                                                                                            ing within the SADC environment.”                across the world.                                                  Continued on Page 3
tims of forced removals between 1913 and             South Africa’s climate diversity favors a great variety of quality agricultural products
1994; land redistribution, to transfer 30 per-
cent of agricultural land to
black people; and tenure re-
                                                                    land reform is closely con-
                                                                    nected to agricultural devel-
                                                                                                        2004/05 financial year under a
                                                                                                        Comprehensive Agricultural Support
                                                                                                                                                         Focus on manufacturing as exports rise
form, to address the insecu-                                        opment. “The impact must            Program (CASP) aimed at improving and            Continued from Page 1                            regional trade by 2008, extending to 100 the Coega River, which is forecast to be-
rity of farm workers, labor ten-                                    translate into equity and eco-      increasing support for emerging farmers.         apartheid regime, reaching 28.2 percent of       percent by 2012. “If you take this region come a hub for sea traffic. The zone is al-
ants, and people living on state                                    nomic growth in the agricul-            Making an important contribution to the      GDPin 2003, up from 11.5 percent a decade        alone, you are looking at a market of 180 ready well served by transportation net-
and communal land.                                                  tural sector,” says Ms. Thoko       land reform process as a provider of fi-         ago.                                             million people, compared to the 42 million works, a skilled labor force, and utility serv-
    The government has giv-                                         Didiza.                             nancial services to agriculture and related          The European Union is the country’s          South Africans,” says Mr. Mpahlwa. ices, and world-class industrial infrastruc-
en its assurance that the free                                          New farmers, including          rural sectors is the Land and Agricultural       most important trading partner and its lead-     “Equally, South Africa provides opportuni- ture, with inter-modal transportation link-
market system will remain the                                       young people and women,             Development Bank (Land Bank), whose              ing source of investment. Europe accounts        ties for investors looking at the wider con- ages and cost-effective bulk services, is
basis of the redistribution pro-                                    are being assisted to enter the     clients include developing farmers, estab-       for approximately half of South Africa’s to-     tinent.”                                            being provided.
gram, and initial deadlines set                                     sector at a commercial lev-         lished commercial farmers and agribusiness.      tal exports, and 90 percent of all trade bar-        At present, manufacturing is concen-                “Industrial zones are a serious attempt
for the transfer of 30 percent                                      el, either as individuals or as     The bank supports economic growth                riers between the EU and South Africa will       trated in South Africa’s six major cities, to decentralize and a good way to marshal
of white-owned land have                 GEORGE     ORICHO          corporate groupings. The gov-       through the provision of retail, wholesale,      be removed over the next decade under a          which among them account for more than resources, typically bringing together both
been extended to 2015. In ad-              Acting   CEO of          ernment has committed R210          project, and micro-financial services to agri-   trade, development, and cooperation agree-       half of GDP, with Johannesburg and Cape foreign and domestic investors and the gov-
dition to its social aspects,               Land    Bank            million ($34.5 million) in the      culture and related rural services. Its loan     ment (TDCA). South African exports to the        Town continuing to enlarge                                           ernment,” Mr. Mpahlwa ex-
                                                                                                                                                         EU have gone up by 46 percent since the          their share. However, moves                                          plains. “The three that we
                                                                                                                                                         provisional application of the TDCAin 2000.      are being made to extend                                             have declared so far will give
                                                                                                                                                             The United States is another key mar-        economic activity to other parts                                     confidence to the private sec-
                                                                                                                                                         ket, and trade between the two nations has       of the country.                                                      tor and to foreign investors
                                                                                                                                                         increased steadily in recent years, boost-           Development has started                                          that IDZs can work and are
                                                                                                                                                         ed significantly by the Africa Growth and        on the first of a planned se-                                        working.”
                                                                                                                                                         Opportunity Act (AGOA), which allows du-         ries of industrial development                                            The Minister urges foreign
                                                                                                                                                         ty-free access of South African exports to       zones (IDZs)—purpose-built                                           investors to look at South
                                                                                                                                                         the U.S. market.                                 industrial estates specifically                                      Africa’s consistency of poli-
                                                                                                                                                             South Africa has been one of the lead-       designated for new invest-                                           cy and the steady progress
                                                                                                                                                         ing beneficiaries since AGOA was imple-          ment in export-driven indus-                                         it is making as a society. “We
                                                                                                                                                         mented in 2000, both in increased exports        tries. The 30,000-acre Coega             MANDISI MPAHLWA            have institutions that com-
                                                                                                                                                         to the United States and inward AGOA-re-         IDZ, South Africa’s largest             Minister of Trade and       pare with the best in the world
                                                                                                                                                         lated investment. Its textile, clothing, vehi-   public infrastructure project,                Industr y             and provide a very stable and
                                                                                                                                                         cle manufacturing, and agricultural sectors      will revitalize the Eastern Cape                                    predictable environment from
                                                                                                                                                         will also benefit from a free trade agreement    region.                                             which to access large markets,” he says.
                                                                                                                                                         currently being negotiated between the               The zone is being developed by the                  “We see this country as having the po-
                                                                                                                                                         United States and the South Africa Customs       Coega Development Corporation (CDC), tential to become a hub in many ways: eco-
                                                                                                                                                         Union (SACU).                                    a private company, in which the national and nomically, culturally, politically, and social-
                                                                                                                                                             Regional trade has also increased and        provincial governments are the only share- ly. This is a country that, given a little time,
                                                                                                                                                         a trade protocol agreement between South         holders. Situated 12 miles east of the city is really going places. I really believe that.
                                                                                                                                                         Africa and its SADC partners aims to pro-        of Port Elizabeth, it is adjacent to a new deep- There is so much more that we can do,”
                                                                                                                                                         vide duty-free treatment for 85 percent of       water port currently under development on concludes Mr. Mpahlwa.
addressing social inequities
                                     BEE                                                 South Africa
      in a market economy.
BROAD-BASED BLACK ECONOMIC EMPOWERMENT (BEE) is a result
of the South African government’s commitment to redressing inequities
of the past and the creation of an inclusive society. Such social goals
are not to be achieved at the expense of business investment. In fact,
BEE is an integral part of South Africa’s growth strategy.




                                                                                         Soul, spirit and energy : South Africans see themselves as a “can do” nation and are optimistic about their countr y ’s future



                                                                                         Sense of national pride underlies Brand South Africa
                                                                                         Continued from Page 2                            every South African stands to benefit            on the basis of their own concrete ex-
                                                                                            A crucial part of the campaign has            from a well-marketed South Africa.”              periences.”
                                                                                         been a drive to encourage South                     Joel Netshitenzhe, CEO of the                    Hosting major international events
                                                                                         Africans to feel a sense of pride in their       Government Communication and                     such as the Cricket World Cup, the
                                                                                         nation and the achievements of its first         Information System (GCIS), says some             Rugby World Cup, and the World
                                                                                         decade of freedom, so that every cit-            of the best potential ambassadors for            Summit on Sustainable Development
                                                                                         izen can act as an ambassador for                South Africa are companies that are al-          have all added to South Africa’s inter-
                                                                                         their country in their contact with the          ready doing business there.                      national profile, and even greater world-
                                                                                         outside world.                                      “There are many international com-            wide exposure is to come when the
                                                                                            “Our challenge is not to convert South        panies based here that are doing very            country stages the 2010 Soccer World
                                                                                         Africans into brand-loyal supporters but         well in the areas of bio-technology, au-         Cup. The event will focus the attention
                                                                                         rather to equip them with information            tomotive sector, business processing,            of billions of television viewers on South
                                                                                         and mobilize them as advocates for the           mining, and so on,” he says. “We want            Africa and can be expected to give a
                                                                                         country,” says Ms. Johnston. “Marketing          them to act as ambassadors, not by               major boost to tourism, exports, and
                                                                                         South Africa is everybody's business, as         talking about things that do not exist but       investment.




                                                                                         Safe ships and clean
                                                                                         seas a priority for growth
                                                                                         of maritime industry
                                                                                         ONE of the leading maritime trading nations, South Africa com-
                                                                                         mands 6 percent of the world’s sea trade. Almost half of the
                                                                                         country's exports and imports are transported by sea, with an             Fast and efficient transport has won an enthusiastic response
                                                                                         average of 13,000 vessels carrying 500 million tons of cargo              from commuters
                                                                                         passing through its ports annually.
                                                                                             The seven major harbors feature high on the list of Africa's         us. Our objective is to see how we can encourage that traf-
                                                                                         busiest, with Durban, Africa’s premier port, heading the list.           fic into our ports and create business opportunities for growth.”
                                                                                         Container traffic has been forecast to double and double again               SAMSA’s duties also fall under international jurisdiction, in
                                                                                         by 2020, and billions of rands are being spent upgrading port            terms of the International Maritime Organization and other in-
                                                                                         facilities to increase handling capacity.                                ternational statutory bodies. The organization is meant to be
                                                                                             Major shipping lanes pass along the South African coastline in       self-financing from charges raised from the services it pro-
                                                                                         the south Atlantic and Indian oceans. The government’s vision is         vides and through levies raised on all vessels calling at South
                                                                                         to develop a world-class maritime industry, which will grow in size,     Africa’s ports.
                                                                                         stimulate economic growth and development, facilitate trade, com-            “Safety does not come cheap,” says Mr. Msikinya. “It’s a costly
                                                                                         ply with international safety standards, and deliver efficient and       endeavor to undertake, but South Africa has no option but to ex-
                                                                                         quality services. It aims to substantially increase the number of        cel in terms of maritime safety, particularly in the winter, when we
                                                                                         SA-flagged vessels and develop new globally competitive ship-            have some very tough seas. We are also aware that as a devel-
                                                                                         ping companies.                                                          oping nation we have to make sure it is effective and facilitates eco-
                                                                                             Central to that vision is the work of the South African Maritime     nomic growth and development.”
                                                                                         Safety Authority (SAMSA), whose task is to ensure the safety                 The Port of Durban is the first African port to have implemented
            BEE’s social and economic goals are closely intertwined.                     of life and property at sea, prevent pollution, and promote South        the Container Security Initiative (CSI)—a U.S. anti-terrorism ini-
            Poverty eradication and the reduction of inequalities are high               Africa as a maritime nation.                                             tiative designed to prevent the smuggling of terrorists or terrorist
                                                                                             “We have recognized the possibilities for growth,” says Sipho        weapons into the United States in ocean-transported cargo con-
            social priorities, the achievement of which would create                     Msikinya, SAMSA’s Chief Executive Officer. “Sitting where we             tainers. Around 6 percent of Durban’s export container traffic is
            an environment characterised by the certainty required for                   are at the southern tip of Africa, we get lots of maritime activity.     made up of U.S.-bound containers—approximately 33,000 con-
                                                                                         It may not all call into our ports, but it is always passing round       tainers a year.
            high levels of business investment.
            Policies of job creation and economic inclusion help the
            building of a better society and also provide business with the              Creating a business environment in which
            opportunity to harness the full potential of South Africa’s
            human capital. Likewise, policies of empowerment through,                    opportunity flourishes
            for example, the encouragement of black-owned SMEs, are                      With the most highly sophisticated, well regulated, and techno-           businesses in Australia, Mozambique, and Namibia, and has plans
            socially progressive, and also foster entrepreneurship and                   logically advanced financial market on the continent, South Africa        to add India and New Zealand this year. Mr. Cavalieri elaborates,
                                                                                         is on the way to becoming the financial capital of Africa. Along          “We want to develop our business internationally from a South African
            innovation, improving overall competitiveness.                               with other sectors of the economy, financial services are gradu-          base. We believe that the South African flavor that we have and
                                                                                         ally undergoing a transformation that will both make them more            the intellectual capital that we have developed in this country has
                                                                                         representative of the modern South African economy and open               export potential. Our objective is to export our know-how to other
            BEE has been designed with investment in mind. the dti                       up their potential even more fully.                                       markets where we feel it can work for us.”
            has been and will continue to work in partnership with the                       Nearly half of South Africa's bigger asset management com-                Mr. Cavalieri says there has not been a higher level of confi-
                                                                                         panies already comply with a voluntary financial services em-             dence in the economy for 40 years. “This is the market that the
            private sector to design and implement innovative, business-                 powerment charter, which sets a target of 25 per-                                         multinationals should be looking at. The dramatic
            principled schemes, adding value to economic activity and                    cent black ownership by 2010—of which at least 10                                         changes we have seen in the last ten to 14 years is
                                                                                         percent has to be direct ownership.                                                       significant and spells real opportunity from an eco-
            establishing a path to prosperity for all.                                       Paolo Cavalieri, Group CEO of Hollard Insurance,                                      nomic growth perspective and therefore from an in-
                                                                                         South Africa’s largest independent insurance and in-                                      vestment perspective.”
                                                                                         vestment group, says the charter is part of an ongo-                                         A prime example of a South African success sto-
                                                                                         ing process that will result in a stronger South Africa                                   ry is Suzanne Ravenall, who came to South Africa
                                                                                         and greater opportunities for all. “What we have to do                                    as a 27-year-old immigrant from the United Kingdom
                                                                                         in South Africa and in our industry, and what we are                                      and went on to found the operational outsourcing com-
                                                                                         doing in our company, is a combination of the natu-                                       pany IDCS Holdings. “There are a lot of things in this
                                                                                         ral evolution of business and trying to bridge the gap                                    country that are far ahead of what is happening in
                                                                                         and heal the wrongs of the past. In addressing the                                        Europe,” says Ms. Ravenall. “People here are open
                                                                                         wrongs of the past we are creating a future for our-            PAOLO CAVALIERI          to new ideas, and there’s an incredible desire to do
                                                  Department:                            selves, a future we all want to be part of and a future       Group CEO of Hollard       better, to get on and make things work. You can do
                                                  Trade and Industry                     that spells opportunity ultimately.”                                Insurance            anything you want to in this country, if you put your
                                                  REPUBLIC OF SOUTH AFRICA                   Twenty-five years in the business, Hollard Insurance                                 mind to it.”
                                                                                         insures around five million South Africans. It sees itself as one of          IDCS has grown dramatically since commencing operations in
                                                                                         the companies that are starting to change the service ethic of in-        1997, increasing its turnover by 515 percent and currently with as-
                                                                                         surance in South Africa. Says Mr. Cavalieri, “Standards are rising,       sets exceeding R20 million ($3 million). The company, which has
                                                                                         there is a higher level of transparency and a strong focus on the         global ambitions, is proudly South African.
                                                 Private Bag X84, Pretoria 0001, RSA     interest of the consumer. The financial services sector in South Africa       “Within the next six months we want to open up in New York
                             the dti Customer Contact Centre, Local: 0861 843 384        is comparable to some of the best in the world. This is a fantastic       and the UK and then Asia Pacific and Tokyo thereafter,” says Ms.
                              International: +27 12 394 9500, http://www.thedti.gov.za   market for people to come and test new ideas.”                            Ravenall. “The product we have created is a South African prod-
                                                                                             The group is expanding to select markets across the globe, with       uct and it is going to be sold as a South African product.”
South Africa                                                               (Part two)                                                                                                    Alive with possibility
GAUTENG: The economic
powerhouse decides to get smart
                  xtending over less than 2 percent of     reputation, is now far less of a problem, thanks to




E
                  South Africa’s surface area, Gauteng     widespread use of camera surveillance and more
                  Province is the smallest of the coun-    effective policing.
                  try’s nine provinces. What Gauteng           “We have seen a resurgence of investments back
                  lacks in size, however, it more than     into the city in a big way,” says Paul Mashatile, the
                  makes up for in economic dynamism.       Member of the Executive Council for Finance and
                  Indeed, it is South Africa’s econom-     Economic Affairs in Gauteng’s Provincial govern-
                  ic engine, accounting for 40 percent     ment. “People are queuing to buy properties here
                  of the national GDP, and 9 percent       because it is safe, and we are encouraging residential
                  of Africa’s entire GDP. The financial    development and renovation. We want Johannesburg
                  and industrial sectors are concen-       to be not just a city of office blocks but a place where
                  trated in the province and around 27     people live.
percent of total manufacturing takes place there.              “I am confident that in the next three or four years
     The population enjoys the highest per capita in-      Johannesburg is going to be one of the most impor-
come level in South Africa. Gauteng is the wealth-         tant cities, not only in Africa but in the world,” he
iest and most urbanized province, and the coun-            adds. “Everybody is going to be doing business here.”
try’s premier consumer market. Collective purchasing           Mr. Mashatile took up his post, and the running
power is 64 percent above the national average.            of Gauteng’s R30 billion (US$4.8) budget, in May
Seventy percent of South                                                                   promising to “consolidate
Africa’s labor force reside                                                                what exists and break
in Gauteng, which has                                                                      new ground” in the de-
the most cosmopolitan                                                                      velopment       of    the
population in the coun-                                                                    province’s economy.
try, with people from all                                                                     The original corner-
over the world. By the                                                                     stone of the economy          The view from the spectacular Nelson Mandela Bridge in Johannesburg, which was officially opened by the former President himself in July
end of this year, the num-                                                                 was the mining indus-
ber of people living there                                                                 try—Gauteng means             flourishing film sector, and ever-increasing ex-            Shilowa. “Our economy continues to show good                 contribute toward achieving the priority objective
is expected to exceed                                                                      Place of Gold— but to-        ports that range from automotive components                 signs of growth through smart industries, and our            of creating long-term employment.
nine million.                                                                              day the predominant           to processed foods.                                         people are benefiting from new employment op-                   Mr. Mashatile says, “We are refocusing our
    In addition to being the                                                               sectors are manufac-             The areas of activity Gauteng is developing              portunities, while those already employed are                economy into the service sector. We are brand-
most technologically ad-             PAUL MASHATILE               BONGI KUNENE             turing, trade, and finan-     for the future are smart industries, high value-            gaining better skills,” he says.                             ing Gauteng as ‘the Smart Province’ because of
vanced           province,         MEC for Finance and      Head of Department of          cial services. Economic       added manufacturing, business services, and                    The promotion of broad based black economic               our concentration on high-tech industries, telecom-
Gauteng is a transport             Economic Affairs in       Finance and Economic          activity is now spear-        business tourism.                                           empowerment, local economic development, and                 munications, and information technology. Over
hub, well positioned for           Gauteng’s Provincial       Affairs in Gauteng’s         headed by a burgeoning           Stimulating growth and creating jobs are at the          the development of small, medium, and micro en-              the next few years we will be looking at invest-
access to the countries in             Government           Provincial Government          call center industry, a       top of the agenda for Gauteng’s premier, Mbhazima           terprises (SMMEs), including cooperatives, will all          ments mainly in these areas.”
the Southern African
Development Community (SADC). Over the next
three years, there are plans to spend R15 billion
($2.4 billion) on comprehensive development of the
                                                              Mega development projects will promote growth and create jobs in key economic sectors
provinces’s infrastructure, including housing, schools,       ATTRACTING foreign direct investment           Africa as a whole, Gauteng has no real ment from the United States and 10 per-                  for the growth of knowledge-based busi-         gically located between Johannesburg
healthcare facilities, sports and recreation facilities,      is a priority for Gauteng, which is trans-     competition. There is a definite critical cent from Europe.                                     nesses and attract leading international        International Airport and the City Deep
and roads.                                                    forming its prospects for economic and         mass in terms of purchasing power, knowl-           Gauteng’s gross geographical product        high-tech players and start-up compa-           Container Depot, an inland port through
    Urban regeneration projects have already trig-            social development through a series of         edge and decision making in Gauteng, (GGP) is expected to receive a significant                 nies. “Our vision is to make this province      which around 40 percent of all cargo ex-
gered a boom in the property market in                        major strategic infrastructure projects.       and it gives the initial foreign investor the boost from a major Blue IQ project to             the knowledge hub of the continent,” says       ported via the Port of Durban originates.
Johannesburg, Gauteng’s capital city. The FNB                    The provincial government’s multi-bil-      first step into the African market.”             build a rapid rail link connecting             Mr. Jonker. “Hopefully, one day we will            An important contribution to the re-
Stadium, popularly called Soccer City, will be one            lion rand Blue IQ initiative is aimed to at-       Neil Devereaux, GEDA’s Managing Johannesburg, Pretoria, Johannesburg                        be the Singapore of Africa.”                    generation process is being made by the
of the key venues when South Africa hosts the 2010            tract R100 billion ($16 billion) of inward     Director, highlights the scale of the econ- International Airport and the corridors be-             The motor vehicle industry is being         Gauteng Manufacturing Advisory Center
Soccer World Cup and is being upgraded to make                investment over ten years. Eleven mega         omy, the well-developed                                            tween them. The              boosted by the Gauteng Automotive               (GAUMAC), whose mission is to help
it the biggest and most modern football stadium in            development projects have been de-             infrastructure and cheap                                           Gautrain project is one      Cluster, another Blue IQ project. This          small, medium, and micro enterprises
Africa. Crime, which once damaged Johannesburg’s              signed to promote strategic private sec-       electricity. ”Gauteng’s               Multi-billion rand           of the largest and most      comprises a new Automotive Industry             (SMMEs) to improve their productivity
                                                              tor investment in key growth sectors of        economic base is self-            initiative is designed to        ambitious transportation     Development Center (AIDC), offering             and enhance their competitiveness. The
        This Sponsored Section is produced by                 the economy, such as smart industries,         sustaining. It is the                                              projects in Africa. Work     world-class services for automotive de-         center focuses on SMMEs in the man-
   InterCom Ltd and did not involve the reporting or          high value-added manufacturing, tourism,       biggest in Africa. Here         transform the face of the is scheduled to start ear-            sign and testing, and an Automotive             ufacturing sector employing not more
   editorial staff of the International Herald Tribune.       and transport.                                 you can come and op-                 province and boost            ly next year and the train   Supplier Park that provides a location for      than 200 people. “The manufacturing
                 Intercom UK Ltd                                 The Gauteng Economic Development            erate in a very well-es-                                           is due to become oper-       small component manufacturers supply-           sector is the engine of South Africa's
            12, St James Square, London                       Agency (GEDA) has been working to              tablished financial and                growth and jobs             ational in 2009, in time     ing the Gauteng plants for the four main        economy and the development of
             SW1Y 4RB, United Kingdom                         boost new investments to R1.8 billion          manufacturing system,”                                             for the 2010 Soccer          automotive manufacturers—BMW, Fiat,             SMMEs is crucial for the country's wealth
   Tel: +44 20 7629 5870 - Fax: +44 20 7629 5337              ($300 million) this year. Last year, Gauteng   he says.                                         World Cup.                                     Ford, and Nissan.                               creation, economic growth, and foreign
                www.intercom-ltd.com                          attracted approximately R1.6 billion of in-         At present, foreign direct investment          Most of the other Blue IQ projects are          Industrial regeneration is under way in     exchange earnings,” says GAUMAC’s
               DIGITAL VERSION:                               ward investment, resulting in the creation     in Gauteng is dominated by China, which expected to be completed by the end of                  the Wadeville-Alrode Industrial Corridor,       CEO, Philip Phore.
       www.nytimes.com/global/southafrica                     of more than 2,500 jobs.                       accounted for 87 percent of the total gen- this year.                                           which has the greatest density of manu-            Other Blue IQ projects include the cre-
   Commercial Management: Virginia Cortavitarte                  Charles Jonker, GEDA’s CEO, says            erated in the first six months of this year.        Akey initiative is the creation of South    facturers in the province. Existing indus-      ation of industrial development zones at
         Editorial Content: Olav Adami                        the province is the obvious choice for the     GEDA has set itself the target of gener- Africa's first science and technology park.            tries are being revitalized and new ones        Johannesburg International Airport and
                                                              investor. “In terms of South Africa, and       ating 20 percent of foreign direct invest- The Innovation Hub will act as a catalyst            attracted to the corridor, which is strate-     at the City Deep Container Depot.




Lights, camera, action! Province seeks lucrative role                                                                                               Gauteng attracts tourists and business travelers with
as the location of choice for movie making                                                                                                          shopping, sport and the Cradle of Humankind
IN THE PAST three years, Gauteng has          is a non-profit company that exists to        three months, from extras to workers in                 A RECENT South African tourism report
earned half a billion rand ($80.5 million)    facilitate, promote and market new filmed     construction, hotels, transportation,                   showed that more than half of the 5.6 mil-
in revenue from film production. The in-      productions. It assists both local and        telecommunications, security, catering,                 lion visitors to the country in 2003 pre-
dustry is seen as potentially a major         foreign film productions, and seeks to        and dry cleaning.                                       ferred Gauteng as their destination.
contributor to economic growth, and the       contribute to the development of the             Plans are being made to develop a                    Gauteng also experienced the highest
provincial government is giving it its full   film and television sector through strate-    Film City complex in Johannesburg,                      spending. Of the R53.9 billion (US$8.7
backing with moves to turn Gauteng in-        gic partnerships and linkages.                equipped with Hollywood-class sound                     billion) spent by tourists, R18.7 billion
to the location of choice for both local          Around 75 percent of the film and tel-    stages. The project will be a public-pri-               was spent in the province.
and international filmmakers.                 evision industry in South Africa is based     vate partnership, designed to cater to lo-                  Gauteng boasts by far the largest con-
    Film production costs in South Africa     in Gauteng, mainly in Johannesburg,           cal and international film producers,                   centration of tourism-related enterprises in
are considerably cheaper than in the          which is also the base for all of South       providing stage, production, and train-                 South Africa and has been successfully po-
United States, Australia, or New Zealand,     Africa's television broadcasters for film     ing facilities.                                         sitioning itself as a destination catering to a
and Gauteng offers a range of diverse         making in South Africa.                          Local filmmakers will be helped to                   variety of tourism niche markets. It has built
and spectacular locations such as the             “The film sector can create jobs more     compete in the international film and                   a reputation as a shopping and entertain-
African bush, industrial scenery, and         instantaneously than any other,” ob-          television market. “The initiatives we                  ment hub, a business tourism center, a lo-
American          and                                                                                           are taking, and the                 cation of huge cultural and historical signif-
European-style set-                                                                                             development of the                  icance, and the home of competitive sport.
tings.                                                                                                          Film City, are not                      “Visitors to our province are always
    Other attractions                                                                                           just to benefit the                 pleasantly surprised by what they find,
for filmmakers in-                                                                                              international pro-                  even more so when realizing how inex-
clude a highly skilled                                                                                          ducers but also our                 pensive, by international standards, South
labor force, includ-                                                                                            local filmmakers                    Africa as a destination is,” says Terry             Caves containing evidence of early human ancestors are a major visitor attraction
ing technicians;                                                                                                and the immediate                   Tselane, CEO of Gauteng Tourism Authority.
world-class facilities,                                                                                         community,” Mr.                     “The high rate of return of travelers is very       prominent part. Mr. Tselane says the whole         self is quite sensitive. Throughput of the
including well-es-                                                                                              Sibeko explains.                    encouraging. First time visitors clearly can’t      of Africa stands to gain from the event. “It       caves can’t really be more than 500 peo-
tablished         and                                                                                              “We are brand-                   get enough, hence our positioning of                puts Africa center stage in a global sport-        ple a day, which means there need to
equipped post-pro-                                                                                              ing Johannesburg                    Gauteng as the Waya Waya province—                  ing event that rivals the Olympic Games            be other attractions in the area. For an
duction digital facil-                                                                                          the home of inde-                   the proverbial place that never sleeps. You         in scale, scope, and sheer spectacle,” he          investor, it’s a good place to make mon-
ities, audio, graph-                                                                                            pendent film mak-                   can’t help but want to come back.”                  says. “It will present the world with the im-      ey in tourism.”
ics, and animation                                                                                              ing. As much as we                      Gauteng attracts a mix of vacation and          age of a modern, progressive Africa—                   Alonger term tourism development proj-
houses; state-of-                                                                                               want foreign-based                  business visitors, but receives by far the          with all her aspirations.”                         ect but another potentially major attraction
the-art rental equip-     Film production could bring significant benefits to Gauteng, including job creation   productions         to              greatest proportion of business interna-                High on the list of things to see in Gauteng   is Dinokeng, ‘the place of rivers,’ an un-
ment; a highly de-                                                                                              come to South                       tional travelers of all the provinces. The au-      is the Cradle of Humankind, a World Heritage       spoiled area in northeastern Gauteng, which
veloped infrastructure; a compatible          serves Mr. Sibeko. “They may be short-        Africa, what we are trying to encour-                   thorities regard business tourism—includ-           site in the northwest of the province, which       is to be developed for game viewing of rhi-
time zone with Europe; and all-year-          term jobs, but they are jobs neverthe-        age is an environment where we can                      ing meetings, conferences, and exhibi-              includes the Sterkfontein Caves where ev-          no, elephant, lion, buffalo, and leopard.
round sunshine.                               less.”                                        create a sustainable film industry—                     tions—as a key area for development.                idence of the earliest human ancestors has             For many visitors to South Africa, the first
    Gauteng has taken note of the ben-            One of the most recent international      much like Brazil, Venezuela, Argentina                      The province is firmly established as a         been found. The site has the potential to be-      stop will be Johannesburg International
efits that New Zealand has reaped since       productions filmed in Gauteng was Hotel       and Chile— where we are able to make                    shopping hub. According to Mr. Tselane, “In         come a major international tourism attrac-         Airport, the busiest airport in Southern Africa,
the three Lord of the Rings films were        Rwanda, a tri-partite production be-          our own films and are not totally reliant               recent years, tourism has been boosted by           tion and plans have been made to promote           which receives 11 million travelers a year.
made there. “What that did for New            tween South Africa, Italy, and the United     on foreign-based productions.”                          cross-border shopping from regional Africa,         public-private sector partnerships. Up to          “All tourists, whether they are vacation
Zealand’s tourism industry was huge,”         Kingdom, starring Nick Nolte, Don Chito,         Ultimately, the objective is to make                 which is indeed the single largest genera-          500,000 visitors annually are expected once        tourists or business tourists, will come
says Themba Sibeko, CEO of the                Sophia Lokendo and a South African            Gauteng a hub of film making, with 15                   tor of revenue for Gauteng, and has un-             the new interactive museum that has been           through Johannesburg at some stage or
Gauteng Film Office (GFO). “That’s what       cast, which won the audience award at         to 20 films coming out of the province                  doubtedly benefited from a buoyant do-              built there is fully operational.                  other,” says Neil Devenaux, of Gauteng
film can do, and that’s what we are aim-      the Toronto International Film Festival.      annually and traveling the world. “We                   mestic economy.”                                        Trish Hanekom, Head of Gauteng’s               Economic Development Agency. He con-
ing toward doing, bringing tourism and        More than R60 million (US$10 million)         have seen what South American cin-                          Gauteng is expecting major benefits to          Department of Agriculture, Conservation,           tinues, “Even if they are going to Cape
film together.”                               of the production costs were spent in         ema has done internationally,” says                     flow from international coverage of South           Environment, and Land Affairs (DACEL),             Town, they will come through Johannesburg,
    Launched by the Gauteng Economic          the province, and filming provided work       Mr. Sibeko. “That’s where we want to                    Africa’s hosting of the 2010 Soccer World           says, “The building is on the periphery            and it is a magnet for business people trav-
Development Agency in 2000, the GFO           for more than 10,000 local people over        see South African cinema go.”                           Cup in which Johannesburg will play a               of the site because the cave system it-            eling to Southern Africa.”
                                                                              economic engine
                                                                                   of South Africa




 Geographically the smallest province in South Africa -                        offers the third cheapest electricity in the world while office
 Gauteng, is the economic powerhouse of the Southern                           rentals per square metre are among the lowest in the world.
 African region and home to some of Africa's greatest                          The province has the highest adult literacy rate in the
 cities. From the vibrant city of Soweto, through dynamic                      country and is home to 70% of the South African high-tech
 Johannesburg, the City of Gold, to the tree-lined diplomacy                   work force. Another groundbreaking initiative, preparing the
 of Pretoria, Gauteng is a cosmopolitan, multicultural mix of                  citizens of Gauteng for the global economy and digital age,
 people from all walks of life. Gauteng is the only province in                is its plan to give every schoolchild in Gauteng access to the
 the world that has produced two noble-prize laureates,                        internet by 2005.
 Nelson Mandela and Archbishop Desmond Tutu living on the
 same street - Vilakazi Street in Soweto.                             After thorough research, Gauteng’s Trade and Industry
                                                                      Strategy was reshaped to take into account emerging global
 The complexity of Gauteng’s history and heritage is unavoid- trends and turn Gauteng into a smart province with the
 able. It is home to the Cradle of Humankind and the place emphasis on information technology, telecommunication, film and
 where the Freedom Charter, the cornerstone of our country’s media, research and development and biomedical industries.
 Constitution, was drafted. Now recognised as the world's
 finest, our Constitution is a blueprint for the liberty of all This gave rise to a multi-billion rand initiative called
 humankind.                                                           Blue IQ, the purpose of which was to invest in economic
                                                                      infrastructure in sectors such as tourism, technology,
 The Gauteng economy is on a sustainable growth and develop- transport and high value-added manufacturing. The
 ment path. It grew by an average of 3.3% per annum Innovation Hub, Gautrain Rapid Rail Link, Cradle of
 between 1995 and 2003, well above the national average. Humankind Interpretation Centre are some of the projects
 Gauteng has the highest per capita income level with that make Gauteng unique.
 collective consumer purchasing power that is higher than
 the national average. It is the most urbanised province in Gauteng is where the creative spirit of a nation converges
 South Africa and has a highly developed transport, financial in a dense cultural heartland. It is also the intersection
 and communication infrastructure.                                    of African and global trade. With the favourable climate
                                                                      in Gauteng, it is only natural that you can enjoy the best
 Gauteng’s clear and consistent economic policies give it an of both worlds. You can go from doing business in a five
 investor friendly climate. It has all the facilities and services to star hotel to seeing Africa’s ‘big five’ just a few hours
 suit modern businesses’ requirements. Furthermore, Gauteng away from Gauteng’s major cities.


                               GAUTENG – BREATHING POSSIBILITIES!




                                                         GAUTENG ECONOMIC
                                                         DEVELOPMENT AGENCY
                                                                                                     Gauteng Tourism Authority




                                 GAUTENG DEPARTMENT OF FINANCE AND ECONOMIC AFFAIRS
Te l : + 2 7 1 1 3 5 5 8 0 0 0 F a x : + 2 7 1 1 3 5 5 8 5 3 0 E - m a i l : f i n a n c e @ g p g . g o v. z a w w w . f i n a n c e . g p g . g o v. z a
South Africa                                                                  (Part three)


Drive to bridge the digital gap and bring
benefits of ICT to the whole community
                  lready the telecommunica-




A
                  tions hub of Africa, South
                  Africa has moved a step
                  closer to having a fully com-
                  petitive market with the re-
                  cent granting of a license to
                  a second fixed-line opera-
                  tor. The country has ap-
                  proximately 5 million fixed-
                  line subscribers and the
fourth-fastest growing mobile phone mar-
ket in the world.
    Minister of Communications Ivy Matsepe-
Casaburri granted the license to a consor-
tium consisting of black empowerment group
Nexus Connexion, Transtel, Esitel, WIP
Investments Nine (trading as Communitel),
and Two Telecom Consortium in September.
The move creates direct competition for           Telkom has expanded its activities to compete in ever y aspect of communications
Telkom, South Africa’s second largest pub-
lic company, which has held a monopoly            the government’s drive toward economic ing beyond simply deploying these tech-
over fixed-line services, but Sizwe Nxasana,      growth and social development. Many peo- nologies to the ways that communities can
Telkom’s CEO, declares that the company           ple living in rural areas have no access to make the most of using them to benefit in
is well prepared for an increasingly more         a telephone.                                    terms of social and economic develop-
competitive environment.                             Access to telephones, computers, and ment."
    "Over the last couple of years we have        the Internet for underserviced areas and dis-      The agency is currently limited to
improved the company’s efficiency and             advantaged communities is promoted by funding raised from a compulsory levy
productivity, and are now well positioned         the Universal Service Agency, which is part on all telecommunications companies in
to offer customers flexibility as well as af-     of the Ministry of Communications. "ICT South Africa, but hopes to form part-
fordable products," says Mr. Nxasana. "We         will play a major role in empowering the next nerships with the private sector and in-
look at how we package our products, how          generation and improving the quality of life ternational funding and donor organi-
we sell, where we sell, and what kind of          in South Africa," says Sam Gulube, the zations in the future.
quality and level of service we deliver to        agency’s CEO.
our customers."                                      The agency is focusing partic-
    Telkom has expanded its range of ac-          ularly on the Internet as the chief
tivities. Traditionally, the company provid-      means of bridging the digital divide,
ed basic connectivity, but it has been mov-       and is building community access
ing up the value chain. "We are no longer         points, known as telecenters,
just a traditional telecommunications com-        equipped with computers, Internet
pany, we are also a communications com-           access, telephones, fax, and pho-
pany," says Mr. Nxasana. "We are moving           tocopying facilities.
into areas traditionally served by IT com-           "We don’t see these facilities as
panies and competing in every aspect of           an end in themselves," Dr. Gulube
communications."                                  says. "They are to be used by the
    Extending access to information and           community to deliver whatever IVY MATSEPE-CASABURRI                   SAM GULUBE
communications technology (ICT) to ordi-          service they need, such as edu-               Minister of         CEO of the Universal
nary South Africans is a vital component in       cation and health. "We are look-           Communications           Ser vice Agency



Rejuvenated Post Office delivers profits turnaround
ONE of South Africa’s most remarkable             "to become business oriented, to have per-          There is a strong focus on using tech-
success stories of recent years has been          formance management and clear goals             nology to improve the core business. "Most
the astonishing turnaround of the Post            defined for everybody, and for everybody        of our capital investment in the coming
Office, which in just three years moved           to understand what we wanted to do."            years will be focused on technology to re-
from being a loss maker hemorrhaging                 The decline in mail was arrested, and        ally take this organization forward," says
business to a profit maker, investing in          new technologies and new products in-           Mr. Manyatshe.
new technology and confident of its role          troduced. "We also started attracting               He believes that IT provides an oppor-
in the country’s future.                          younger people to join the organization and     tunity rather than a threat. "There will al-
    The most recently declared results for        in general to get rid of the negative image     ways be room for mail and I really believe
the organization show a profit of R27 mil-        that the Post Office had."                                      that the Post Office will not
lion ($4.3 million) for the 2003/04 finan-           The company was divid-                                       be threatened by the devel-
cial year, with significant increases in          ed into separate areas deal-                                    opment of IT. The Post Office
turnover and operating profits. By the            ing with the mail business,                                     must find its niche in that de-
end of the current financial year, it is es-      the retail business, financial                                  velopment and position it-
timated the profit level could rise to R100       services and the courier                                        self appropriately, and I think
million ($16 million). In November, the           business to enhance serv-                                       we have done that," he says.
Post Office was voted the most pro-               ice delivery. The brief for all                                    With more than 2,700 out-
gressive ICT company in South Africa at           of them was to meet and ex-                                     lets and 5,500 service points,
the African ICT Achievers Awards.                 ceed customer expectations.                                     the Post Office is one of the
    Yet just three years ago, things were            The profile of the Post                                      country’s largest business-
very different. The company was in dire           Office management itself has                                    es. Eight million items are de-
straits, losing hundreds of millions of rand      altered noticeably. "When I         MAANDA MANYATSHE           livered to 6.5 million ad-
a year and with staff morale very low.            arrived, the Post Office man-            CEO of the            dresses every day. There are
    The catalyst for change was the ap-           agement was 100 percent                  Post Office           plans to establish new out-
pointment in 2000 of Maanda Manyatshe             white male Afrikaans," Mr.                                     lets bringing the total to 2,940
as CEO. Under the banner 'We will de-             Manyatshe recalls. "Now it is 60 percent        by March 2008.
liver, whatever it takes,’ Mr. Manyatshe          male and 40 percent female, and I think             The organization is contributing to the
refocused the organization on profitabil-         we have got only two Afrikaans in the man-      development of rural communities and
ity, controlling operational expenses and         agement of the company at present. The          serving as an interface between govern-
improving customer service.                       same thing has happened with the Board.         ment and the community by establishing
    "The biggest thing we did was to change       It was 100 percent male. Now it is about        Citizens' Post Offices and setting up pub-
the culture of the organization," he says,        60 percent women and 40 per cent men."          lic Internet terminals.
                                                                                                                                                                                         Alive with possibility
Black empowerment is proving a winner for
giant hotels and casino group Tsogo Sun
THE ECONOMIC empowerment of pre-                                                                                                          appeal to high-end tourists looking
viously disadvantaged communities and                                                                                                     for spa, golf, etc. vacations in top-
individuals is an integral part of South                                                                                                  quality destinations.”
Africa’s ongoing progress towards a more                                                                                                      Meanwhile, as South Africa's
equal society. It is also seen as having a                                                                                                potential as a business tourist des-
crucial role to play in the country’s economic                                                                                            tination is increasingly recognized
development, utilizing the vast amount of                                                                                                 by the global business community,
talent and ability that was suppressed dur-                                                                                               Sandton Convention Center has
ing the apartheid years.                                                                                                                  gained a reputation as a world class
   Progress has been gradual but steady.                                                                                                  facility. Major events it has hosted
Black Economic Empowerment (BEE)                                                                                                          include the 2002 World Summit on
companies have shown tremendous                                                                                                           Sustainable Development, and it
growth over the past decade, and are in-           RON STRINGFELLOW                 JABU MABUZA                 HELDER PEREIRA            will be the headquarters for FIFA
creasingly being sought for joint ventures        Chief Executive Officer        Managing Director of         Managing Director of        when South Africa hosts the 2010
with local and foreign companies. The              of Tsogo Sun Group             Tsogo Sun Gaming            Southern Sun Hotels         World Soccer Cup.
numbers of black personnel in top and                                                                                                        “The World Summit on
senior management positions are rising,          we are doing business.”                       Hotels expanded into Central Africa.       Sustainable Development stamped
as is black equity in public companies.              According to Mr. Stringfellow, the        Recently, it launched a new venture        South Africa, Johannesburg, and
    One of the prime examples of black em-       group has reached a crossroads                to create deluxe properties in pristine    Sandton Convention Center as be-
powerment in the private sector is Tsogo         where it is considering strategies for        locations in South Africa and beyond       ing amongst the top global venues
Sun Holdings, the largest hotel and gam-         expanding its hotel and casino busi-          for elite travelers. Helder Pereira, the   providing value for money,” says
ing group in the country, in which black         nesses either in South Africa or in-          company’s Managing Director, says          Nomaxabiso Majokweni, the cen-
South Africans hold a 51 percent stake.          ternationally. “We see a number of ex-        South Africa is attracting an increas-     ter’s Executive Director. “And we will
   Formed in April 2003 as a result of a         citing possibilities,” he says.               ingly affluent class of tourists. “This    continue to do so for international
deal between global brewing giant                    Earlier this year Southern Sun            is a five-star deluxe product that will    events and all our national events.”        The Palazzo Intercontinental Hotel in Johannesburg, one of the more than 80 hotels in the Southern Sun chain
SABMiller and empowerment group Tsogo
Investments, the company incorporates
Southern Sun Hotels, South Africa’s sin-
gle largest hotel business, Tsogo Sun
                                                 Public service broadcaster SABC educates, informs, and entertains in 11 languages
Gaming, the second largest casino oper-          EIGHTEEN million South African adults                                                              ic view of what happens within their own           delivered the Cricket World Cup last year         edges the importance of presenting a pos-
ator, and the Sandton Convention Center          tune in every day to the three free-to-air tel-                                                    society."                                          and it was broadcast everywhere in the            itive image of South Africa. "In the images
in Johannesburg, the most technically ad-        evision channels run by the South African                                                              The corporation is Africa’s leading provider   world. As big as 2010 is going to be, we have     that we beam to South Africans, and be-
vanced conference facility in Southern           Broadcasting Corporation, the country’s na-                                                        of innovative and interactive educational          learned some lessons along the way."              yond our borders, we have got to give peo-
Africa.                                          tional public service broadcaster. Almost 19                                                       broadcast content and has won numerous                Although state-owned, the SABC de-             ple a better and a truer reflection of what
   Ron Stringfellow, CEO of Tsogo Sun            million adults listen to the corporation’s 18                                                      awards for programming, both locally and           pends on advertising for most of its fund-        we are and what we do."
Holdings, says that being the largest em-        radio stations.                                                                                    internationally.                                   ing. In the financial year 2003/04 it posted
powered company in the leisure indus-               It’s quite a challenge in a multi-cultural                                                          Under regulations laid down by the             a net profit of R3.4 million ($24.2 million), a
try has proved highly beneficial. “There         nation with eleven official languages. "You                                                        Independent Communications Authority of            turnaround from a loss of R148 million ($557            This Sponsored Section is produced by
has been a good response as far as our           need to prioritize in order to try to have                                                         South Africa, the SABC is required to car-         million) the previous year.                        InterCom Ltd and did not involve the reporting or
customers are concerned, and it stands           something that runs in a logical, sustainable,                                                     ry a minimum of 55 percent local content.             Looking to the wider world and the suc-         editorial staff of the International Herald Tribune.
us in good stead in other parts of Africa.       and systematic way," says Peter Matlare,                                                           At least 60 percent of educational pro-            cess achieved by global brands in the in-                        Intercom UK Ltd
We are very proud of what we have                Group Chief Executive.                             SABC’s radio stations and television channels   gramming must be South African, 55 per-            dustry such as CNN and the BBC, Mr.                         12, St James Square, London
                                                                                                                                                                                                                                                                    SW1Y 4RB, United Kingdom
achieved.”                                          Mr. Matlare is strongly aware of the in-        reach millions of South Africans every day      cent of children's programming, and 50 per-        Matlare comments, "We try to create best
                                                                                                                                                                                                                                                          Tel: +44 20 7629 5870 - Fax: +44 20 7629 5337
   Jabu Mabuza, Managing Director of             fluence the corporation has within South                                                           cent of knowledge-building programming.            practice here so that we can compete with                       www.intercom-ltd.com
Tsogo Sun Casinos, agrees that empow-            African society and the responsibility it bears.   sponsibility.                                      Planning for coverage of South Africa’s         anybody in the world. If we are able to pro-
                                                                                                                                                                                                                                                                      DIGITAL VERSION:
erment makes sense from a business point         "Every single day, we go into people’s homes          "We have to give people a range of con-      hosting of the 2010 World Soccer Cup is            duce a quality product that is of interest to
                                                                                                                                                                                                                                                                www.nytimes.com/global/southafrica
of view. “Business has to operate in a sus-      and we influence what they think, what they        tent that is—in the classic phrase—educa-       already well under way. "We are preparing          audiences in Europe, Latin America, North
tainable way. Empowerment opportunities          talk about, and how they prioritize. We reach      tional and informative as well as entertain-    for that now, not in six years’ time, and have     America or Asia, it is absolutely right that       Commercial Management: Virginia Cortavitarte
                                                                                                                                                                                                                                                                Editorial Content: Olav Adam
have to be about making an impact on the         more than 90 percent of the population.            ing. We have to give them a window on what      committed to investing significantly in our        we aim for those markets."
communities and the environment in which         With that influence comes enormous re-             happens in the world, but also a panoram-       technology planning," says Mr. Matlare. "We           At the same time, Mr. Matlare acknowl-

								
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