Research and consulting in South Africa

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Research and consulting in South Africa

Country overview:

Headquartered in South Africa, IOA draws on a deep understanding of the country, built through years of consulting and research. IOA analysts have linked South Africa’s declining status as Africa’s leading economy to a crisis in political leadership that has significantly impacted economic stability. The nation’s electricity infrastructure, representative of these challenges, has imposed significant costs across society and commerce. Despite this, South Africa remains Southern Africa’s economic anchor, with exceptional infrastructure, industrial capacity, and skilled human capital. However, growing dissatisfaction with corruption and inadequate service delivery has diminished the popularity of the ruling ANC party, in power since the democratic state was established in 1994, losing its political majority in the 2024 national elections.

Economically, South Africa thrives with a strong services and entertainment sector, world-class institutions of higher education, and flourishing agricultural and manufacturing industries. Its appeal as a tourist destination complements its robust military and diplomatic resources, reinforcing its position as one of Africa’s most influential nations.

Key opportunities in South Africa:

  • The agricultural sector continues to thrive, with steadily increasing export volumes of fruits, vegetables, and value-added products such as wines and frozen foods
  • IOA researchers highlight the country’s robust and stable tourism industry, supported by a well-developed network of game reserves, nature parks, resorts, beaches, and other attractions
  • A skilled and educated workforce underpins the success of South Africa’s industrial and financial services sectors, which remain dynamic and prosperous

Key concerns/risks in South Africa:

  • Corruption and inefficiency within the government have undermined confidence in leadership, contributing to a weakened national currency
  • Persistent issues such as high crime rates, economic inequality, and widespread poverty remain significant challenges
  • An ongoing energy crisis has caused frequent power outages, severely impacting businesses, industries, and the daily lives of citizens
South-Africa

Tips on doing business in South Africa:

Starting a business:

  • Companies operating in South Africa are required to comply with Black Economic Empowerment (BEE) laws, which mandate minimum levels of local ownership and specific staff composition ratios. Non-compliance can limit a company’s ability to engage with the state and major private sector entities
  • South Africa stands out for granting foreign nationals full property rights. However, investors should be aware of potential changes to land ownership legislation, as uncertainty persists regarding future regulations in this area
    (Read more at: http://www.investsa.gov.za/)

Doing business:

  • South Africa provides various incentives for foreign investment, many of which are regionally specific. For example, the Western Cape Province offers benefits such as foreign investment grants for new machinery, duty-free imports to industrial development zones, employee training subsidies, and a strategic investment support programme that provides a 100% tax allowance on machinery projects exceeding US$70 million
  • The country’s 10 Special Economic Zones (SEZs) offer value-added tax and customs duty relief, along with tax incentives for employing low-wage employees. Despite being Africa’s most advanced economy, South Africa faces persistent challenges, including deteriorating infrastructure, utility shortages, logistical bottlenecks, inflation, and high levels of violent crime and civil unrest, which significantly increase security costs for businesses

Culture and society:

  • South Africa’s business culture closely mirrors that of more developed international markets. Coupled with English being the primary language for administration and commerce, the country offers a straightforward entry point for first-time investors in Africa
  • Violent crime remains a significant concern, and foreign visitors are strongly advised to avoid traveling after dark

A sample IOA research report on South Africa: