...CASE This case details South Africa’s “benefit-detriment” relationship with Foreign Direct Investment (FDI). Since 2002, South Africa has given incentives to foreign investors through its strategic industrial project (SIP). These seem to have help South Africa attract more FDI. Between 2000 and 2007 the value rose from UD$43.4 billion to UD$ 69.4 billion increasing purchasing power, improving infrastructure, relatively inexpensive natural and labor resources, and strategic position within the global economy. Over time, many expected that the post-apartheid government of South Africa would take revenge against the previous elites of the country, including foreign companies, and discourage new foreign investment. Instead, the new government has adopted a largely pro-business attitude and has actively courted FDI. The results of this policy have been somewhat mixed. Despite gigantic opportunity, many foreign investors have been reluctant to enter the South African market due to low economic growth rates, continued political instability, and high security risks. APPLICATION OF THEORY Government policies both encourage and restrict foreign direct investment activities. Foreign direct investment (FDI) can take the form of a foreign firm buying a firm in a different country, or deciding to invest in a different country by building operations there. An example of FDI is given in the opening case of FDI in South Africa. The goal of the case of FDI in South Africa is to understand the...
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...Banking and Financial Systems SOUTH AFRICA [pic] | | Summary Introduction page 3 I) Executive Summary. page 4 II) The Financial System: page 4 A) The Banking System page 5 B) The Financial Market page 7 III) The Legal Side: page 7 A) Legal Framework page 7 B) Regulatory Oversight page 8 IV) Depository-Taking Institutions. page 9 V) Banking Issues and Challenges Prospect. page 10 Conclusion page 12 Sources page 12 Annexes page 13 Introduction For years ago, South Africa has been facing a lot of racial, political and demographic problems. On the first hand, this country must face these elements and on the other hand it must still working to become a powerful economic country in the world. With this report we are going to develop the Financial System of South Africa which is a key sector in the country. The South Africa Gross Domestic Product is worth 277 billion dollars or 0.45% of the world economy, according to the World Bank. While it contracted 2.80% over the last 4 quarters, the economy was expected to move back into growth in the last quarter of the year and GDP growth of 1.5% is forecast for 2010, rising to 3.2% by 2012. South Africa has a two-tiered economy; one rivaling other developed countries and the other one with only the most basic infrastructure...
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...largest emerging markets economies. These four countries encompass more than quarter of the world’s land area and in 2009 accounted for more than 40% of world’s population, 40% of the world’s foreign exchange reserves and 25% of world’s GDP. The states, which were earlier, accepted to consider as developing countries of Third world, promptly become economic giants of the new world. BRIC: Brazil, Russia, India and China – four markets everyone with the unique features, but thus unites them the potential generated by changes in political systems of these countries. As a result of these changes there was a consumer demand, which is formed by 43% of the population of the whole world. In roughly developing countries of BRIC there are five of the ten largest cities of planet where concentrated the huge amount of capital and millions of consumers who are aspiring up on social and economic ladder. The term BRIC was included into a business lexicon in 2003 after the economist of Goldman Sachs investment bank Jim O'Neill described future economic picture of the world. In his opinion, by 2050 the economic capacity of these four countries will allow them to become dominating economies, and to surpass in scales not only economy of the USA, but also economy of all of the countries of Western Europe taken together. However, on forecasts of experts of Goldman Sachs, it can happen and earlier - not through forty, and in twenty years. It should be noted that the sequence of capital letters in an...
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...CASE STUDY: MAHINDRA & MAHINDRA IN SOUTH AFRICA Introduction Multinational corporations apply various growth strategies in expanding their operations globally. This is because of the strategic importance of various industries in different countries of the world where the multinational corporations operate (Bremmer, 2012, p. 2). Mahindra & Mahindra Ltd is a multinational automotive manufacturer that itsheadquartered in India and has operations in various parts of the world, including South Africa (Chandrasekhar, 2012, p. 1). The organization is weighing options on the company’s growth strategy in the South African market where it operates as Mahindra & Mahindra South Africa (proprietary) Ltd, a fully owned subsidiary of the organization that is based in Pretoria, South Africa (Chandrasekhar, 2012, p. 1). This case study analysis evaluates the growth strategy of M&M ltd, and uses the evaluation to determine the decisions that could be made by M&M South Africa in its expansion endeavors and the best option that should be implemented by the organization. Analysis A: Strategy Growth of any organization involves expansion of its supply chain or expansion of activities undertaken in a supply chain. This can either be internally through expansion of operations or externally through mergers and acquisition (Flauris& Oswald, 2006, p. 101). Mahindra & Mahindra Ltd sometimes expands its operations internally without undertaking acquisitions and sometimes...
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...I. Introduction South Africa suffers from persistently high unemployment and low labor force participation, leading to a depressed absorption rate of below 45 percent—almost the lowest among large emerging market economies. The 2008–09 recession made the situation much worse, with some 1 million jobs eliminated and a sizable group of discouraged workers leaving the labor force, further reducing the absorption rate to 40½ percent in 2009 (Figure 1). Recognizing the gravity of the situation, the authorities made job creation the top priority in the 2010 and 2011 budgets. The New Growth Brazil Chile China Colombia India Indonesia Israel Korea Malaysia Mexico Peru Philippines Poland Russia Thailand Ukraine 70 70 90 90 2009 Argentina Hungary South Africa Turkey 30 30 50 50 2000 Figure 1. Employment (Percent of working age population)WHAT DO FAST JOB CREATORS LOOK LIKE? WHAT DO FAST JOB CREATORS LOOK LIKE? SOME STYLIZED FACTS AND PERSPECTIVES ON SOUTH AFRICA SOME STYLIZED FACTS AND PERSPECTIVES ON SOUTH AFRICA 2 Path (NGP) set an ambitious target of creating 5 million more jobs in the next decade, so as to reduce the unemployment rate by 10 percentage points. Against this backdrop, this Departmental Paper examines the job creation performance in a group of large emerging market economies, including South Africa, and highlights some common economic characteristics that are likely associated with fast job creation. This...
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...Into Africa Institutional investor intentions to 2016 An Invest AD report written by the Economist Intelligence Unit Into Africa Institutional investor intentions to 2016 Contents Foreword 2 Preface 3 About this research 4 Key findings 5 I. Introduction: a North-South role reversal 6 II. A hopeful decade: Africa’s changing image 8 III. Barriers to investment 11 IV. The new investment case for Africa 15 V. Investor perceptions versus market reality in key markets 18 Conclusion 20 Appendix: survey results 21 1 © Economist Intelligence Unit Limited 2012 Into Africa Institutional investor intentions to 2016 Foreword Africa is no longer a leap of faith Even well informed observers have written off Africa as riven by war, corruption and poverty, but since the emergence of China and India as economic growth engines, many are now asking whether this continent of one billion people can also achieve its own “economic miracle” . These are still early days but there is no doubting the promising signs, politically and economically. At a time of huge change, societies are showing that they can adapt, on the whole, peacefully. In the last year, Nigeria, Tunisia, Zambia and Rwanda have held elections hailed as free and fair by international observers, while a referendum created the new nation of South Sudan. Along with greater political stability, has come policy continuity and improved ...
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...Research and innovation in the ICT environment ……………....………. 5 4.2 Human capital development in the ICT environment.……..…....……….. 7 4.3 Level of advancement of ICT networks and services.…………………… 8 4.4 Level of advancement of the IT and software industry sectors……….… 11 3.5 The role of CIOs in promoting digital economy evolution……………….. 14 4. Conclusion………………………………………………...…………………...…. 17 5. References……………………………………………....…..………………...…. 19 1. 1. Abstract This report is an analysis of digital economy evolution and the role of the CIO in the South African ICT sector, looking at the following five points: (i) Research and innovation in the ICT environment. (ii) Human capital development in the ICT environment. (iii) The level of advancement of ICT networks and services. (iv) The level of advancement of the IT and software industry sectors. (v) The role of CIOs in promoting digital economy evolution. 2. Introduction This report is an analysis of the digital economy evolution and the CIO’s in the South African ICT sector. The CIO does not have much influence in the areas of ICT such as, the ICT sector itself, research, ICT sector innovation, human capital development, ICT networks, services and software development, as these areas are controlled by the government and global multi-national organisation that have the capital to invest in innovation hubs, universities, research and development centres. However...
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...If the conditions in sub-Saharan Africa are arguably worse, why are South African firms investing there? Foreign direct investment (FDI) flowing into sub-Saharan Africa from firms operating in other developing countries have sharply increased in recent years. These new flows have significantly changed the composition of FDI in the region compared to a years ago when FDI was mostly from multinationals hailing from the former colonial powers, France and the United Kingdom. Figures 3.3 and 3.4 demonstrate respectively the major investors for overall FDI and manufacturing FDI in the five sample countries. As the composition of investors has changed and the variety of investor groups in terms of size of firms, sectors, capital intensity, and business models has increased – so has the diversity of the motives and drivers of investment of the different groups. At the end of 2002 [based on total FDI stock] South Africa was the third largest foreign investor in Africa after the United Kingdom ($20 billion) and the USA ($19 billion). Furthermore, in 2005 South Africa was the largest source of new FDI into Africa. South African investors have a very large presence in the extractive industries on the continent, however, a fair amount of this investment dates back more than two decades. Since the advent of democracy in South Africa, South African firms have tended to spearhead moves into the establishment of capital-intensive business services such as telecommunications and banking, and...
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...The Impact of Globalization on the Health Sector in South Africa After the Apartheid era, massive inequalities in income, health status, access to health care and other social services continued to dominate in South Africa. The Apartheid era was a system of racial segregation that was implemented in South Africa from 1948 to 1994. Due to colonization, whites had ruled South Africa for several centuries, which resulted in the creation of a system that was constructed to serve as a legal framework for continued economic and political dominance by people of European descent (WHO 2003: Antiretroviral Therapy). The apartheid era came to an end as a consequence of both inner and global pressure and South Africa’s new democratic government. The new government claims that improving the access to health care is a main priority noting, “emphasis should be placed on reaching … the most vulnerable” (Department of Health 1997:13). Giving access to health care is becoming an even greater challenge. South Africa was, and is still facing an exploding HIV/AIDS epidemic that, if anything, is highly associated with health care demands. Today, there are more than 5.3 million people living with HIV/AIDS in South Africa, this accounts for more than 21.5% of the entire population (CIA World Fact book: 2006). This paper aims to understand how the health care sector has dealt with the challenges faced in dealing with immense inequalities and a growing epidemic in the context of globalization...
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...SOUTH AFRICA ON THE FACE OF THE GLOBAL RECESSION South Africa was not spared by the global recession that gripped the global markets in 2009. The global economy remained firmly in the grips of a recession in the first quarter of 2009, South African markets correspondingly quaked as activity continued to decline at broadly the same pace that had been registered in the previous quarter. Driven by further sharp contractions in real output of the advanced economies in the wake of the financial crisis, the decline in production and international trade volumes reverberated in all parts of the world (Quarterly Bulletin, No.252). Accordingly, emerging-market economies also recorded significantly slower and even negative rates of growth, with declining export demand and lustreless prices of most export commodities acting as powerful brakes on the growth momentum in Africa and elsewhere in the developing world. 407 The South African Quarterly Bulletin, No.252 further noted that under these circumstances inflationary pressures dissipated in most parts of the world. At the same time, numerous countries continued with their efforts to support aggregate demand by means of unparalleled infusions of fiscal and monetary stimulation. Up to the first quarter of 2009 this did not seem to have had the desired effect. Most recently, however, there have been some improvements in a limited subset of indicators, suggesting that the pace of decline in global demand may be decelerating....
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... | |The Week Three learning team assignment is divided into two halves. In the first half of the assignment, Learning Team “C” will | |conduct a country risk analysis for the selected global business venture in South Africa. The topics that will be analyzed are | |the political, legal, and regulatory risks; the exchange and repatriation of funds risks; and the competitive risk assessment. | |The second group of analyses will evaluate the taxation and double taxation risks; the four P’s of market risks, and will analyze | |the distribution and supply chain risks. The final group in the risks analysis seeks to address the physical and environmental | |challenges to entering and operating in a target market, analyze the social and cultural risks, and address the cyber or | |technological risks. | |In the second half of the Week Three assignment Learning Team “C” will summarize the strategic planning process by defining and | |clarifying the mission and objectives, performing a SWOTT analysis of South Africa, and by selecting a strategy. The second half | |of the assignment will also include selecting and justifying an appropriate mode of entry for the global product or service; | |controlling and evaluation of the planning process, and devising a contingency plan. ...
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...importance of these markets was prescient. For example, even after their advances over the past decade, China, India, and Russia are predicted to triple spending power by 2018, and Brazil is not far behind, according to a recent report by Business Monitor International.1 While South Africa, by most accounts, has become a fifth member of the BRICS (signified by the capital “S”), these countries no longer sufficiently represent the rise of emerging markets. Global gross domestic product (GDP), factoring in purchasing power parity, now has reached about a 50/50 split between the developed economies and emerging economies. In fact, for the first time since the dawn of the Industrial Age, the global economic engine is being powered by Southern Hemisphere nations.2 Moreover, in the aftermath of the financial crisis and subsequent Great Recession, the emerging markets as a whole—not the world’s debt-ridden developed markets—have been the most resilient in the face of global distress. As Chief Economist and Leader of PwC’s Emerging Markets practice Harry Broadman puts it, “Going through the financial crisis, the most resilient economies—measured by GDP or trade volumes—have been the emerging markets.” Broadman made this comment at PwC’s annual Global Retail and Consumer Leadership Conference held recently in New York. He moderated the session “A BRIC and Beyond,” which examined the notion that, while the BRICS still serve as a proxy of sorts for any emerging markets discussion, there is...
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...LEASING CASE EXPLORING LEASING MARKET OPPORTUNITIES IN BOTSWANA by TOOCHUKWU AGWUNCHA ( copyright Fortvivit Resources Limited 2008) This case has been inspired and motivated by further developments in the Leasing industry in Botswana, but does not describe the actual situations in the country. Botswana, lies directly above South Africa and has one of the highest Gross Domestic Product per Capita in Africa (at USD 6140 - 2006). Its proximity to Africa’s economic powerhouse gives it the investment confidence of corporate organisations in South Africa. Its 2006 population is 1.75 million (growing at just over 1.5% p.a.) with a Gross Domestic Product (GDP) of about USD10.75 billion, a booming solid mineral industry (especially Diamond mining) and a focused government whose liberal policies have encouraged Foreign Direct Investments (FDI’s) mostly sourced from and generated through the influence of the strong and resilient South African economy. Three years ago, Botswana started operating a leasing law in the country. The regulator in the industry is the Leasing Commission of Botswana (LECOBOT), which is empowered to supervise the Leasing operations in the country. Some of its terms of reference and charge of responsibility include but are not limited to the following: 1. Promote the business of equipment leasing through its regulation of the market and according to the provisions of the leasing law. 2. Enable and encourage leasing companies to practice the business...
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...Financial statement of South Africa South Africa is a middle-income, emerging market with an abundant supply of natural resources; well-developed financial, legal, communications, energy, and transport sectors and a stock exchange that is the 16th largest in the world. Even though the country's modern infrastructure supports a relatively efficient distribution of goods to major urban centers throughout the region, unstable electricity supplies retard growth. The global financial crisis reduced commodity prices and world demand. GDP fell nearly 2% in 2009 but has recovered since then, albeit slowly with 2014 growth projected at about 2%. Unemployment, poverty, and inequality - among the highest in the world - remain a challenge. Official unemployment is at nearly 25% of the work force, and runs significantly higher among black youth. Eskom, the state-run power company, has built two new power stations and installed new power demand management programs to improve power grid reliability. Construction delays at two additional plants, however, mean South Africa is operating on a razor thin margin; economists judge that growth cannot exceed 3% until those plants come on line. South Africa's economic policy has focused on controlling inflation, however, the country has had significant budget deficits that restrict its ability to deal with pressing economic problems. The current government faces growing pressure from special interest groups to use state-owned enterprises to deliver basic...
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...28 Feb 2013 |Questions |Marks | |In sequential order, which of the following combination applies in the development of government debt management in South Africa |5 | |Government started developing the macroeconomic framework which laid the basis for active debt management strategies | | |Issuance of debt took place three or four times a year usually coinciding with the date of maturing bonds | | |The bond exchange of South Africa (BESA), a self-regulating organization was formed followed by a panel of primary dealers to | | |promote primary issuance through formal auctions and secondary market (trading) activities | | |The objective of debt management was to promote a balanced maturity profile | | |The objective of debt management focused on reducing the cost of debt subject to acceptable risk limits, ensuring government access| | |to domestic and international capital markets and diversifying debt instruments | | |Choose a correct combination | | |B,A,C,D and E ...
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