EY Africa Attractiveness Survey 2015
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- SA is the top destination for FDI projects – the country attracted 121 projects in 2014/15
- SA was the favourite destination for Chinese projects, securing 34.4% of total Chinese investment on the African continent
- North Africa rebounds as inflows to Southern Africa falter: Egypt comes second with 71 projects; Morocco comes third with 67 projects
- The above are actual greenfields investments, and does not account for flows in the financial markets – which – if included will show that SA is the top destination for FDI and financial market activity in Africa
- Context: Africa’s share of global FDI grew from 3.6% in 2003 to 7,7 in 2012, and the continent more than doubled its share of global FDI flows from 7.8% in 2013 to 17.1% in 2014
Global FDI flow indicators on SA: Outbound
EY – Africa Attractiveness Survey (2015)
- South Africa is the second largest source of FDI into the African continent (53 projects launched in 2014).
- SA is the leading intra-regional investor in the financial services sector (16 projects launched in 2014.
Outbound Investment
- 2013 budget speech of then minister of Finance, Pravin Gordhan, indicated that during the 2008-2013 period the South African Reserve Bank approved nearly 1000 large investments by South African corporations into 36 African countries
- NDP underlines critical importance of boosting intra-African trade and integration of regional markets
- Johannesburg Stock Exchange currently ranked the 19th largest stock exchange in the world by market capitalisation and the largest exchange in Africa
- Industrial Development Corporation (IDC) has investments in 60 projects across 20 countries that creates a cumulative African investment portfolio of R7.5 billion by March 2014
- With so many SA and multinational corporates that operate from Joburg into other African markets, the city’s logistical, air, inland port, and related soft infrastructure provides a solid base for corporates to establish regional headquarters.
Brand SA Fieldwork Research
THE SA INC SERIES
Rationale:
- SA’s reputation is shaped by foreign policy; trade interactions as well as a divergent sets of relationships & interests (governmental, non-governmental, and business)
Objectives:
- Development of framework of analysis that considers all elements of SA’s strategic economic, diplomatic, multilateral, and peace & security engagements on the continent
- Integrated view of SA’s footprint on the continent for strategic marketing, communications, and reputation management projects
The SA Inc. Project: Fieldwork
- Cycle 1 – 2014/15: Kenya, Nigeria, Ghana
- Cycle 2 – 2015/16: Russia, Angola, DRC, Senegal
Brand SA’s Africa strategy: development of SA presence & reputation in select markets/multilateral environments
South Africa In(c) series research reports based on:
- direct fieldwork studies
- desktop research
SA Inc. Project: Kenya – South Africa Bilateral Trade
Total Bilateral Trade (2015)
- Kenya Imports from SA: R 7 778 157 829
- SA Imports from Kenya: R 214 882 875
- Total Bilateral Trade: R7 993 040 704
SA Inc. Project: Kenya Key Findings
Challenges & opportunities for interaction between the countries:
- SA’s reputational strengths:
- SA democratic transition, strong institutions
- Major interest in SA music & culture
SA’s reputational challenges:
- SA seen as losing competitive edge, & not promoting internal development
- SA character/personality perceived as imposing & aggressive
- SA companies losing to local competition due to poor market entry strategies and ‘know it all’ attitudes
SA Inc. Project: Nigeria – South Africa Bilateral Trade
Total Bilateral Trade (2015)
- Nigeria Imports from SA: R 7 524 647 002
- SA Imports from Nigeria: R 35 016 713 902
- Total Bilateral Trade: R 42 541 360 904
SA Inc. Project: Nigeria Key Findings
SA’s reputational strengths:
- SA highly visible & respected (more than 150 companies active in market)
- SA’s democratic transition, institutional & infrastructural profile appreciated & referenced as key attractiveness feature
- Interest in business & investment interactions as well as cultural, music, tourism & related experiences
SA’s reputational challenges:
- Despite major business & investment footprint, concerns about SA character & business culture
- With Nigeria’s rebased GDP, SA considered to be losing competitive edge
- SA character/business persona can be perceived as imposing & aggressive
- SA co’s losing to local competition due to quick adaptation & learning and not woking with local partners in market entry, maintenance & expansion strategies
SA Inc. Project: Ghana– South Africa Bilateral Trade
- Ghana Imports from SA: R 4 102 457 867
- SA Imports from Ghana: R 175 234 249
- Total Bilateral Trade: R4 277 692 116
SA Inc. Project: Ghana Key Findings
SA’s reputational strengths:
- SA’s corporate governance, managerial, technical, & other expertise
- Strong people-to-people relations & potential for expansion in creative spheres, e.g. design, music, visual arts
- SA corporates & their products & services widely known & utilised in market
- Ghanaians prefer ‘international brands’, incl. those from SA
- Potential in building deeper social & cultural relations via music, arts, design and cultural diplomacy
- SA entrepreneurs use Accra as regional base/hub for West African business operations
SA Inc. Project: Angola– South Africa Bilateral Trade
Total Bilateral Trade (2015)
- Angola Imports from SA: R 8 034 823 695
- SA Imports from Angola: R 15 372 088 529
- Total Bilateral Trade: R23 406 912 224
SA Inc. Project: Angola Key Findings
- SA and Angola have a ‘bi-polar’ history…
- Therefore critical that interested parties carefully select expats and South African experts to be deployed in the market
- Angolans describe themselves as arrogant, and South Africans are also criticised as being arrogant – need for increased cultural contact and building of mutual understanding
- Understand political & administrative context and “do homework”! Invest adequate resources (time and money) in preparing to enter the market
- Take time & invest in relationship-building; identify reliable local partner
- Recognise importance of language and (business) culture, e.g. Portuguese South Africans play a constructive role in several SA corporates in the market
- Leverage off strong bilateral political relations
- Approach Angolan government with ‘what can we do for you’ rather than ‘we are great at this and will bring it to you’
SA Inc. Project: DRC– South Africa Bilateral Trade
Total Bilateral Trade (2015)
- DRC imports from SA: R 11 925 581 263
- SA Imports from DRC: R 1 145 732 485
- Total Bilateral Trade: R 13 071 313 748
SA Inc. Project: DRC Key Findings
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- ‘The Congo is open for business!’ – unlike other markets, former colonial power doesn’t enjoy privileges in terms of exploiting business opportunities
- Acknowledge local business culture & need for “courting” – relationship-building is key, both with government and business, if one is reap any rewards from engaging in the market.
- When entering DRC, SA corporates must take caution not to be perceived as arrogant by expecting host to adapt to their ways of doing business
- Agriculture is key competitive strength – SA recognised for its expertise in sector. Given that DRC only utilises ≈10% of its 80m hectares of arable land, there’s enormous potential for SA to play a role here
South Africa’s Lieutenant General Derrick Mbuyiselo Mgwebi, Force Commander of the UN Organization Stabilization Mission in the DRC (MONUSCO)
- “The Congo is a big country with a relatively small budget and many priorities”
- Great expectations, ample opportunities and overwhelming priorities
- SA to utilise well-established footprint in DRC to promote SA investments
Only one, albeit critical challenge:
- Political instability and insecurity and continued conflict in the Kivus
SA Inc. Project: Senegal – South Africa Bilateral Trade
- Senegal imports from SA: R 1 296 609 007
- SA Imports from Senegal: R 238 916 730
- Total Bilateral Trade: R1 535 525 737
SA Inc. Project: Senegal Key Findings
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- At political, business, art and societal level, Senegal is extremely open to the idea of increased interaction between the countries
- Relatively low level of knowledge about South Africa, particularly about the country’s development post-1994;
- Potential for significant linkages such as the twinning of Goree Island and Robben Island
- Opportunity to focus on 30 years since the 1987 meeting on Goree island between the ANC and a delegation of Afrikaners
- Senegal challenges SA to play more pro-active & leading role in promoting Africa’s development
- Expanded business interaction through increased contact with chambers of commerce, e.g. Dakar Chamber of Commerce
- Potential for expanded agriculture sector interactions
- Academic contact and exchange, esp. Universite Du Sine Saloum Elhadj Ibrahima Niass
The SA Inc. Project: Key Findings 2014
- The Nation Brand concept & marketing strategy depends on stakeholder interactions, and challenges Brand SA to be open to changing domestic and international environments
- Unique nation brand reputational strengths: culture, music, business sophistication, infrastructure, political management of democratic transitions
- Challenges: South Africans perceived as imposing, aggressive, and unwilling to listen to local advice
- SA business to adopt market entry strategies that pay more attention to soft factors, e.g. local business culture
- Politically, SA seen as progressive, with strong institutions, & democratic credentials.
- Internal developmental challenges cause for concern, e.g. xenophobia, misplaced perceptions about African expats in SA (esp. Kenya & Nigeria)
- SA music, art & cultural products well-received & followed, with continued interest in expanded interaction
The SA Inc. Project: Russia / BRICS 2015
Activities and Outputs
- Fieldwork Russia, July 2015
- Research Report, The Ufa Declaration and its Implications for the BRICS Brand, published 30 September 2015
- Dissemination at Roundtable, 30 September 2015
- Theme: Deepening the relationship between Brazil, Russia, India, China and South Africa
Panellists:
- Prof Garth Shelton, University of Witwatersrand
- Ms Catherine Grant-Makokera, Tutwa Consulting
- Counsellor Eric Sogocio, Head of the BRICS Section, Embassy of Brazil
- Mr Yaroslav Shishkin, Deputy Head of Economic Section, Embassy of the Russian Federation
- Mr. Randhir Jaiswal, Consul General of India
‘The Ufa declaration and its implications for the BRICS brand’
Highlights:
- Successes of BRICS in implementing Summit decisions
- Implications of increased formalisation/institutionalisation for development of BRICS
- Development of BRICS reflects positively on global governance capability of the five member states
- The SA Inc. Project: Publications (2014-2015)
- A lesson for Brand SA from Nigeria – Be bold, keep it real, and make it quick – a conversation on the art of Nollywood success. 23 August 2014, Brand South Africa
Research Note. By: Dr Petrus de Kock
Researching the Nation Brand – background to the concept, and initial findings from fieldwork in Kenya and Nigeria. 18 September 2014. South Africa In(c) Series
Research Report #1 By: Dr Petrus de Kock
African market entry strategy – learning to listen & listening to learn. 12 December 2014. Brand South Africa Research Note #2. 2014. By: Dr Petrus de Kock
Developing an SA Inc strategy for the Nation Brand, 28 July 2015, Brand South Africa Research Report, By: Dr. Judy Smith-Höhn & Dr Petrus de Kock
The Ufa Declaration and its Implications for the BRICS Brand, 30 September 2015, Brands South Africa Research Note, By: Dr. Petrus de Kock
SA Inc Project: Angola Fieldwork Research Report, 16 November 2015, Brand SA Fieldwork Report, By: Dr. Petrus de Kock & Dr. Judy Smith-Höhn
Prepared by Brand SA Research
Contact:
Dr Petrus de Kock, GM – Research
petrusd@brandsouthafrica.com
Dr Judy Smith-Höhn, Research Manager
judys@brandsouthafrica.com
Leigh-Gail Petersen, Researcher
leigh@brandsouthafrica.com
