Economy Investments Trade relations DTI IMC

South Africa is a middle-income developing country with an abundant supply of natural resources and an economy displaying many world class features like well developed financial, legal, telecommunication, energy supply network and transport sectors as well as a stock exchange, which ranks the fifteenth largest in the world and a modern infrastructure supporting an efficient distribution of goods to major urban centres throughout the region.

South Africa is the largest most sophisticated economy in Africa with substantial links to the rest of the continent and strong economic ties to Europe and the rest of the world.

Formerly dependant primarily on gold and mining industries, the economy is now more broadly based, with manufacturing, the largest sector, contributing to nearly a quarter of the GDP.

South Africa has now a modern, well-diversified economy in which agriculture, mining, manufacturing, commerce and a broad structure of service establishments contribute to the wealth of the nation.

South Africa is one of the most sophisticated and promising emerging markets of the world and the South African Government has taken a number of steps to make its markets more attractive to foreign investment -

• the reduction of tariffs and subsides to local firms
• the elimination of both the disclamatory non-resident shareholders tax, and certain limits of hard currency repatriation
• cutting the secondary tax on corporate dividends in half

Foreign investors are permitted 100 percent ownership and the government treats it the same as domestic enterprise for various investment schemes such as export incentive programmes and tariffs, tax allowances and the other trade opportunities.

For foreign investors, South Africa offers: a substantial market with significant growth potential, a market-orientated tradition, access to the other markets in Africa, excellent communication and transportation links, liberal repatriation of profits and earnings and availability of inexpensive electrical power and raw materials.

Trade Relations

	Cape Town and its most famous landmark, Table mountain.

South African - European trade relations are of utmost importance to the South African economy as 38,5 % of SA's global trade volume is generated with the EU (40,4 % including the rest of Europe). At the beginning of 2000, the Trade and Development Cooperation Agreement (TDCA) between SA and the EU came into effect resulting in a positive development of trade between the two regions. In 2000, the volume of South African exports to the EU grew by 35 %.

Trade Patterns Between Finland and South Africa

The trade between South Africa and Finland is very much based in favour of Finland. This trade gap is to a large extent the result of small number of commodities, notably electronic equipment for communication.

The highest exports of South Africa to Finland in 2003 were in the following broad categories

• paper production
• processed foods
• mineral products
• machinery
• basic metals

South African government is keen to attract investment in manufacturing and high technology industries. Finnish companies rank among European countries that invest in South Africa.

Finnish FDI into South Africa is concentrated mainly in high technology capital equipment (sales, service and exports) and industry processes. This structurally relates to the following industries:

• paper products
• timber and wood processing
• mining and metallurgical equipment and processing
• telecommunications

Established Finnish companies in South Africa agree that South Africa has a very permissive and enabling environment for foreign investment - like medium to low operating costs; large profitability and revenue growth and fair taxation systems.

More information on trade and economy can be obtained directly from the SA Embassy in Helsinki.