Business Market Summary

Southern Africa is among the fastest growing export markets for the US Great Lakes states. South Africa has seen remarkable political and economic transition since the move to complete democracy in 1994. The subsequent rise of the black middle and upper class, not at the expense but to the overall benefit of the economy, has made South Africa a world leader in terms of transition policy and economic development. Mauritius and Botswana are two regional countries that have been in the top ten in world economic growth over the past decades. Mauritius has become an entry point for India as well as other markets. Energy rich Angola and Mozambique offer unique export opportunities.

The benefits of a relatively transparent business culture, ease of movement of people and capital, free press, political and economic freedoms, limited bureaucracy and English as a business language make southern Africa a choice market for consumer and commercial goods from around the world. Prospects for the future are bright.

Population: 48.5 million (2008 IMF est.) / 51.5 m (2012, IMF est.)

Land Size: 470,686 sq. miles (1,219,080 km)

Currency: 1 Rand = 100 cents - noted with "R"

Time: GMT + 2 hours

Languages: English (business, government, popular entertainment), Afrikaans, Zulu, Xhosa, Sotho, Pedi, Tswana, Venda and Ndebele.

Economic Growth Rate: 3.1% (2010,Economist projected)

Stock Exchange: 27 500 (January 2010)

Consumer Inflation: 5.8% (November 2009, SA Revenue Bank)

Producer Inflation Rate: - 1.4% (November 2009, SA Revenue Bank)

Gross Domestic Product: $275 billion (2010, Economist)

Purchasing Price Parity GDP $498 billion (2010, Economist)

GDP per head: $5,610 (PPP: $10,140) (Economist)

Rate of Exchange: US$1 = R7.40 (January 15, 2010)

Executive Summary

South Africa is the regional economic powerhouse of sub-Saharan Africa with almost a one third share of the region's GDP. Growth for 2010 is estimated to be at 2.5% or better, with future years returning to over 5% as economic recovery takes hold. While trade and economic relations are growing with traditional trading partners of the European Union, which shares a free trade agreement with South Africa, and the USA, relatively more is being done with Indian Ocean Rim partners such as Indian and ASEAN, as well as China and Brazil. Although precious and strategic minerals remain important, sectors such as manufacturing and tourism have surpassed mining as foreign income earners. South Africa's reliance on the service sectors is about what most developed countries share - close to 70%.

Infrastructure is general world class in respect to business and middle-class residential locations but poor in residential areas where many low income families reside. South Africa has the highest variability between low and high income earners, creating a relatively wealthy country with many low income earners. No one ethnic group comprises a majority; Zulus are the largest group at 22%.

English is the language of learning in most public schools and universities and the language of business as well as of much popular culture. South Africa has a historical legacy of a strong democratic parliamentary system made popularly manifest only in 1994, a concern for constitutionality and the power of the legal system and a popular culture of equal rights while addressing the issues of the past.

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Opportunities exist but are not limited to the following sectors:

Selected success stories across the markets
These stories are indicative of recent successes made through our office:

Mining Refinery Goods Sale:
Pennsylvania company: $2.1 million sale of lined steel piping. This product is now being used for acid flows in platinum refining. Our office assisted with tariff specifics and ratings to allow the firm to be more competitive in the tender process, and ultimately be successful, against domestic and European competition.

Small Machinery/Equipment Sale:
Pennsylvania company: newspaper press knives. This highly specialized product benefits the millions of newspapers published daily in the region. Our office located the distributor for this product.

Public Facilities:
New York company: public washroom facilities and equipment. Our office helped locate a new distributor for this firm in the region.

Consumer Goods:
Indiana company: swimming pool water chemical testers. South Africa has over 500,000 residential swimming pools. Our office assisted this firm to locate a new distributor with ongoing sales.

Agriculture Related:
Pennsylvania company: Over $500,000 sale of electrical insect killing devices for the cattle industry. Southern Africa has about 5,000 cattle farms, these products kill insects, relieving stress to allow cows to increase milk production.

Education/Conferencing:
Indiana company: projector screens and projector room systems. This firm reported sales to a firm in Mauritius relating to our market research. Mauritius has a growing conference industry with over 90 world class hotels on the island. Our office located the Mauritian distributor for this firm.

Automotive Components:
Ohio company: headlights manufacturer. South Africa had a domestic vehicle sales growth of 29% in 2005. Both new vehicles sales and new OEM exported vehicles have risen substantially in the past decade. South Africa is home to most of the large American, European and Japanese OEM automobile manufacturers with new factory infrastructure being announced Ohio company: spillage drums. This firm reported its first sale of $35,000 to a South African company in November 2005. An additional order of $40,000 was placed for March 2006 delivery.

Mining Equipment:
Ohio company: makes laboratory sieves for the mining industry. An initial sale was made to a South African company. Additional sales were made a year later.

Small Machinery/Equipment:
Ohio company: makes high pressure water hydraulic valves and systems used in the de-scaling process of metals. A distributorship agreement was signed with a South African company in 2005.