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South Africa in Africa

The 'South Africa in Africa: Trade, Investment and Infrastructure Development Handbook' is a comprehensive guide published by the Department of Trade and Industry, aimed at enhancing trade and investment cooperation among African countries. It highlights South Africa's role in promoting infrastructure development and provides detailed country-specific profiles for 53 African nations, showcasing opportunities for trade and investment. The Handbook serves as a valuable resource for policymakers, businesses, and investors seeking to navigate the evolving African business environment.

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0% found this document useful (0 votes)

172 views497 pages

South Africa in Africa

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royalaluminiumnig

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Download as PDF, TXT or read online on Scribd

You are on page 1/ 497

SOUTH AFRICA IN AFRICA

Trade, Investment and Infrastructure

Development Handbook
© Department of Trade and Industry, June 2010.

Acknowledgements

This is a publication of the Department of Trade and Industry (the dti) and was conceptualised by the
International Trade and Economic Development (ITED) Division. The project was directed by Messrs George
Monyemangene, Head: African Economic Relations (Bilaterals) Unit and Thamsanqa Ngwenya, Director:
Central and East Africa Unit. Inputs were received from ITED’s Southern, West, Central and East, and North
Africa Directorates.

Photos are royalty-free stock images, courtesy of Stock.xchng, www.sxc.hu and

Media Club South Africa, www.mediaclub.com

the dti Campus

77 Meintjies Street
Sunnyside
Pretoria
0002

the dti
Private Bag X84
Pretoria
0001

the dti Customer Contact Centre: 0861 843 384

the dti Website: www.thedti.gov.za
Contents
Preliminary Material
Foreword .............................................................................................................. iii
Abbreviations and Acronyms ................................................................................ iv

Part I: Introduction and Background 1

Purpose of the Handbook......................................................................................2
Features of the Handbook .....................................................................................3
Compiling the Handbook .......................................................................................4

Part II: South Africa’s Involvement on the Continent 6

Chapter 1 Africa’s Changing Business Environment and Growth Prospects .........................8

Chapter 2 South Africa’s Role in Promoting Infrastructure Development and

Capacity-Building in Africa...................................................................................16

Chapter 3 The Wealth of Opportunities in Africa ..................................................................28

Chapter 4 The Role of the dti in Promoting Greater Intra-African Trade and Investment

Opportunities .......................................................................................................34

Chapter 5 An Overview of South African Investment in African Countries ...........................38

Part III: Country-Specific Profiles 48

SOUTHeRN AFRICA 50
Angola ................................52 Mozambique .......................98
Botswana............................62 Namibia ............................106
Lesotho...............................70 Seychelles ........................ 114
Madagascar........................76 South Africa ......................120
Malawi ................................84 Swaziland .........................128
Mauritius .............................90 Zambia .............................134

eAST AFRICA 150

Zimbabwe .........................142 Kenya ...............................190
Burundi .............................152 Rwanda ............................198
Comoros ...........................160 Somalia ............................206
Djibouti .............................166 Sudan ...............................212
Eritrea ...............................174 Tanzania ...........................120
Ethiopia ............................182 Uganda .............................228

i
Contents, cont.

CeNTRAL AFRICA 234

Cameroon.........................236 Equatorial Guinea.............266
Central African Republic ...244 Gabon...............................272
Chad .................................252 Congo ...............................278
DR Congo.........................258 São Tomé e Príncipe ........284

WeST AFRICA 290

Benin ................................292 Liberia...............................346
Burkina Faso ....................300 Mali ...................................354
Cape Verde ......................306 Niger .................................360
Côte d’Ivoire ....................312 Nigeria ..............................366
Gambia .............................318 Senegal ............................374
Ghana...............................326 Sierra Leone .....................382
Guinea ..............................334 Togo..................................388
Guinea-Bissau ..................340

NORTH AFRICA 394

Algeria ..............................396 Mauritania.........................420
Egypt ................................404 Morocco............................428
Libya .................................412 Tunisia ..............................434

Annexures 440
Annexure I South African Representation on the Continent ................................................440
Annexure II Trade and Investment Contacts in Africa...........................................................456
Annexure III the dti Africa Directorates .................................................................................459

References 461

ii
Foreword

In recent years, the African continent has undergone a remarkable

political and economic transformation. Even though Africa is still faced
with governance and development challenges, it is a far better place today
than it was twenty years ago. Not only is Africa by and large more politically
stable; the increasingly secure political environment across the continent
has also coincided with an improving trade and investment climate.

Against the backdrop of growing political stability and an improved

Minister Rob Davies business environment, Africa has recorded impressive growth. Between
Department of Trade and Industry
2001 and 2008, growth in national economic output on the continent
averaged 5,9% annually, the strongest consistent performance since the early 1970s. In 2007, sub-Saharan
Africa’s (SSA’s) exports accounted for 3% of world trade, from 2% in the late 1990s. Yet, despite this
improved global trade performance, trade among African countries remains worryingly negligible. Intra-
regional trade makes up 10% of the continent’s trade flows, compared with the 75% of trade that takes
place among European Union member states and the 50% of trade that occurs within the East Asian and
North American regional blocs.

Africa has made significant strides in positioning itself as an attractive investment and business destination.
However, if African countries are to become internationally competitive and secure economic progress,
they must shore up regional integration and expand intra-regional trade. This means, among other things,
eliminating tariff and non-tariff barriers to trade, diversifying Africa’s production and exports, strengthening
markets and institutions, investing in infrastructure and skills, and lowering the cost of doing business.

This publication represents a significant contribution to ongoing efforts to enhance trade and investment
co-operation among African countries. It is a detailed guide to trading and investing on the continent and
showcases the abundance of commercial opportunities available in all 53 African economies. The Handbook
aims to serve as a useful source of information for policy-makers, exporters, businesses and investors.

.......................................................
Minister Rob Davies
Department of Trade and Industry
Republic of South Africa

iii
Abbreviations and Acronyms
ACP African Caribbean Pacific
AGOA Africa Growth and Opportunity Act
AMU Arab Maghreb Union
AU African Union
BEE Black Economic Empowerment
CEMAC Economic and Monetary Community of Central Africa
CEN-SAD Community of Sahel-Saharan States
CEPGL Economic Community of the Great Lakes Countries
CET Common External Tariff
CIA Central Intelligence Agency
COMESA Common Market for Eastern and Southern Africa
EAC East African Community
ECCAS Economic Community of Central African States
ECOWAS Economic Community of West African States
EDBM Economic Development Board of Madagascar
EMIA Export Marketing and Investment Assistance
EPZ Export Processing Zone
EU European Union
FDI Foreign Direct Investment
FTA Free Trade Area
G8 The G8 stands for the ‘Group of Eight’ nations and comprises Canada,
France, Germany, Italy, Japan, the United Kingdom, the United States of
America and Russia. The European Commission is also represented.
GDP gross domestic product
GIPC Ghana Investment Promotion Centre
GNI Gross National Income
HIPC Heavily Indebted Poor Countries
HS Harmonised Commodity Description and Coding Systems
ICBC Industrial and Commercial Bank of China
ICF African Investment Climate Facility
ICSID International Centre for the Settlement of Investment Disputes
ICT Information and Communication Technology
IFC International Finance Corporation

iv
IMF International Monetary Fund
ITED International Trade and Economic Development Division (the dti)
KIA Kenya Investment Authority
LDC Least Developed Country
MFA Multi Fibre Agreement
MIC Middle-Income Country
MIGA Multilateral Investment Guarantee Agency
MRU Mano River Union
NEPAD New Partnership for Africa’s Development
NIPC Nigerian Investment Promotion Commission
OECD Organisation for Economic Co-operation and Development
ODA Official Development Assistance
OHADA Organisation for the Harmonisation of African Business Law
OPIC Overseas Private Investment Corporation
PPP Purchasing Power Parity
RDB Rwanda Development Board
SACU Southern African Customs Union
SADC Southern African Development Community
SDI Spatial Development Initiative
SME Small and Medium Enterprises
SSA sub-Saharan Africa
TISA Trade and Investment South Africa
the dti Department of Trade and Industry
UAE United Arab Emirates
UDEAC Customs and Economic Union of Central Africa
UNCTAD United Nations Conference on Trade and Development
USA United States of America
VAT Value-added tax
WEAMU West African Economic and Monetary Union
WHO World Health Organisation
WIPO World Intellectual Property Organisation
WTO World Trade Organization

v
vi
Part I: Introduction
and Background

1
Purpose of the Handbook

The African business environment is dynamic, diverse and constantly evolving, with

opportunities for trade and investment growing rapidly across the continent. In order to

capitalise on these opportunities, it is crucial for African traders and investors to have

access to up-to-date information on the structure and performance of individual African

economies, the nuances of doing business in these countries, and the existing and

potential opportunities for trade and investment across the continent. With this in mind, the

Department of Trade and Industry (the dti) has produced the South Africa in Africa: Trade,

Investment and Infrastructure Development Handbook to serve as a comprehensive

guide to trading and investing on the continent. The Handbook is designed to provide

a single source of up-to-date information to policymakers, exporters, businesses and

investors on broad economic trends and growth prospects in Africa, infrastructure

development and capacity-building initiatives on the continent, and the wealth of trade

and investment opportunities available in African economies. Moreover, the Handbook

provides detailed country-specific information that will assist in the development of trade

and investment strategies and decision-making relating to business ventures in individual

African economies.

The Handbook represents the second edition of the South Africa in Africa: Trade,

Investment and Infrastructure Development Handbook originally published by the dti in

2007. This second edition substantially updates and reconceptualises the original volume.

2
Features of the Handbook

The Handbook is divided into three parts:

Part I: Introduces the Handbook, explaining its purpose and briefly outlining the

methodological approach adopted in its development.

Part II: Presents a series of chapters focusing on South Africa’s involvement on the

continent, contextualising the economic and political roles that the country plays

in Africa. Individual chapters are also devoted to showcasing the many positive

improvements in the African business environment and growth prospects on the

continent, as well as the wealth of trade and investment opportunities available

in African economies. This section also includes case studies of South African

companies that are successfully doing business in other African countries and

of the Maputo Corridor, an initiative of the governments of South Africa and

Mozambique aimed at linking South Africa’s northern provinces and Swaziland

to the nearest deepwater ports in Maputo and Matola in Mozambique.

Part III: Provides individual country-specific profiles detailing information and statistics

on geography and population characteristics, the economy, and trade and

investment climates for 53 African countries.

It is important to note that while this publication of the dti provides up-to-date and

comprehensive trade and investment information that will serve as an important reference

point for exporters, businesses and investors seeking to expand into African markets, it

does not provide all the answers to the risks and difficulties, and potential opportunities

that traders and investors might encounter in these markets.

3
Compiling the Handbook

The information and statistics contained in this Handbook were compiled through

a thorough and multi-faceted research process conducted over a six-month period.

This involved detailed desktop research that included a review of relevant literature to

delineate continent-wide and regional economic and political trends, and identify key

opportunities on the continent for exporters, businesses and investors. Furthermore,

a variety of sources of geographical, demographic and economic data were consulted

in compiling the individual country profiles included in Part III of the Handbook. These

sources included, but were not limited to, the statistical databases of the World Bank

(World Trade Indicators, World Development Indicators, Doing Business and Enterprise

Surveys) and the International Monetary Fund (IMF); the African Development Bank’s

Statistical Yearbook; the African Economic Outlook produced by the African Development

Bank and the Organisation for Economic Co-operation and Development (OECD); the

World Economic Forum’s Africa Competitiveness Report; the dti’s own country briefs and

trade statistics database; the International Finance Corporation (IFC); The Africa Report;

the United States’ Department of State; the United Nations Conference on Trade and

Development (UNCTAD); country briefs produced by Wesgro, the official Investment and

Trade Promotion Agency for the Western Cape; the World Trade Organization’s (WTO’s)

Trade Policy Reviews; and the World Factbook released and updated annually by the

Central Intelligence Agency (CIA).

The desktop research and data collection process has been augmented by a series

of interviews and consultations with several South African Embassies and Diplomatic

Missions in individual African countries, African Embassies and Diplomatic Missions in

South Africa as well as engagements with representatives of prominent South African

businesses that are operating successfully on the African continent.

4
The paucity of up-to-date and reliable data on socio-economic trends and economic

indicators in Africa is well documented. While every effort has been made to source

standard data and economic statistics across all African countries, it is important to note

that in selected cases this information is simply not available or remains uncollected. In

addition, there is often a lag between when raw data is collected for African countries and

the time that it is aggregated and released, meaning that in certain instances statistical

information is only available several years after it was initially collected. This poses a

significant obstacle to obtaining the latest statistical information for several economic

indicators. In recognition of these limitations, many initiatives to improve the frequency

and quality of data collection efforts on the African continent are already underway, and

these efforts promise to improve the quality of information available to policymakers,

exporters, businesses and investors on the continent.

5
6
Part II: South Africa’s
Involvement on the Continent

This part of the Handbook presents an overview of South Africa’s extensive

involvement across Africa, contextualising the economic and political role

that the country plays on the continent. A range of positive improvements

in the African business climate are also highlighted, together with the

wealth of trade and investment opportunities that the continent offers. Case

study examples, of South African businesses that have already achieved

considerable success in capitalising on these opportunities, are also

presented.

7
Contents
Chapter 1

Africa’s Changing Business Environment and Growth Prospects

Africa has commonly been perceived by investors and business people as a difficult place
to do business, characterised by slow and complicated business requirements, widespread
regulatory obstacles, inefficiency, poor infrastructure, a high degree of uncertainty and
risk brought about by macroeconomic and political instability, poor governance and
corruption. These perceptions have been reinforced by the reality that the continent’s
unique history, diversity, geography and political and institutional landscape have shaped
a highly complex business environment.

Yet, despite these challenges, a variety of reforms have led to a rapidly improving business
environment in many countries across the continent. Declining costs associated with
doing business, together with a more predictable institutional environment and a wave of
economic liberalisation, have considerably improved conditions for doing business in Africa.
African governments have also adopted a number of policy-related reforms and strategies
designed to ensure that their economies are more business friendly.

These reforms have begun to gain considerable momentum. For instance, 2008
represented a record year for Africa in terms of regulatory reform – with 28 countries
completing a total of 58 reforms designed to make it easier to do business. Moreover,
three of the top-ten-ranked countries in 2008 in terms of reforming business regulations
are in Africa: Senegal, Burkina Faso and Botswana. Senegal adopted reforms making
it easier to start a business, register property and trade across borders; while, in the
same year, Burkina Faso introduced a new labour code together with reforms designed to
ease the processes of registering property, dealing with construction permits and paying

taxes. Likewise, Botswana reduced the average time required to start a business and

strengthened investor protection.

8
Most recently, economic and political reform in Rwanda has been extraordinary,

particularly when the progress made by the country is considered against the backdrop

of the tragic 1994 genocide and the political turmoil and conflict characterising most of

Rwanda’s post-independence history. In addition to recording consistently high economic

growth rates (including annual growth rates of more than 10% between 1994 and 2004

and, more recently, GDP growth of 11,2% in 2008) and major advancements in its

education system, Rwanda has emerged as the top global reformer in terms of improving

the environment for doing business in the country. Rwanda has steadily reformed its

commercial laws and institutions over the last decade. In 2008/09, Rwanda led the world

in terms of reforms to its business environment related to starting a business, employing

workers, registering property, getting credit, protecting investors, trading across borders

and closing a business.

According to the World Bank’s Doing Business measures, the country’s overall ease-of-

doing-business ranking improved by a remarkable 76 places from 143rd position in 2009

to 67th in 2010. Furthermore, even greater improvements were seen between 2009 and

2010 in specific areas related to protecting investors – where Rwanda’s global ranking

jumped 144 places from 171st to 27th. Rwanda has recorded other impressive gains

with respect to business reforms relating to the availability of credit (where the country’s

ranking relating to getting credit improved by 86 positions from 147th in 2009 to be ranked

61st in 2010), employing workers (rising 83 positions up the rankings to reach position

number 30) and starting a business (where the country’s reforms saw it rising 53 places

to reach 11th position in terms of the ease of starting a business).

Several steps have been taken to improve the investment climate across the African

region. The New Partnership for Africa’s Development (NEPAD) Business Foundation,

endorsed by the NEPAD Secretariat, has since 2002 played a key role in garnering

support from the private sector in South Africa to help with the implementation of

NEPAD’s economic objectives. At an international level, the African Investment Climate

9
Facility (ICF), established as an innovative public-private partnership in 2006, has sought
to remove obstacles to doing business in Africa and thereby counter both the prevailing
negative perceptions and the reality of doing business on the continent. Using funding from
both the private sector as well as governments and donor organisations, the ICF focuses
on providing a mechanism for improving the enforcement of property rights and contracts,
removing bureaucratic red-tape, developing financial markets, improving infrastructure
development, and controlling corruption and crime, while at the same time encouraging
customs reform and facilitating the development of financial markets. Similarly, Business
Action for Africa has been formed by a group of large multinational corporations including De
Beers, Nestle and Standard Chartered with the aim of working with both governmental and
non-governmental organisations to improve business conditions across the African region.

Economic changes have coincided with, and been bolstered by, political reforms adopted
by several African countries. Previously, a high number of civil wars were raging across
African states, including Angola, Mozambique, Burundi, Rwanda, Sierra Leone and
Somalia. However, recent years have witnessed improved political conditions across
most African states, with most of the civil wars and inter-state conflicts having ended. With
the exception of a few cases, such as the Darfur conflict in Sudan, most African countries

have become peaceful and politically stable. This augurs well for future economic growth.

Africa’s Promising Growth Prospects and Fundamentals

One of the primary national economic indicators, gross domestic product (GDP), showed
impressive growth across each of the African regions during the first decade of the
millennium. The overall African economy has grown significantly during the first decade of
the millennium and, in 2007, GDP registered an aggregate growth rate of 6,1% across the
continent. However, in 2008, the growth rate fell to 4,5% against the background of the
global economic recession. Nevertheless, this strong growth represents a clear message
that Africa has untapped economic strength that can be unlocked to boost itself alongside
the world’s developed and advanced economies.

The Annual GDP growth rates for Central, Eastern, Northern, Southern and Western
Africa, in 2007 and 2008, are presented in the following table.
10
Table 1.1: Percentage GDP Growth Rate for Aftrica, 2007-2008

Region GDP Growth Rate (%) (2007) GDP Growth Rate (%) (2008)

Central Africa 4,0 5,0

Eastern Africa 8,8 5,7

Northern Africa 5,3 4,1

Southern Africa 7,0 4,6

Western Africa 5,4 4,6

Africa 6,1 4,5

Source: Global Economics Crisis Economies.

The Success Stories: The Ten Best-Performing African Economies

Several African economies are now matching and even exceeding the economic
performance of some of the world’s most prominent emerging economies as well as
many of the world’s developed economies, where growth has stabilised. For instance,
South Africa’s GDP and some business telecommunication system technologies have
exceeded a large number of developed countries in world ranking terms. A review of
the economic strength of the best-performing African countries in terms of total GDP (at

purchasing power parity, or PPP) is presented in the table below.

11
Table 1.2: Best-Performing African economies in terms of GDP (PPP), 2008 – 2009

GDP (million US$) 2009

Rank Country GDP (million US$) 2008
estimates

1 South Africa 277 188 243 315

2 Nigeria 214 403 168 422

3 Egypt 162 164 188 059

4 Algeria 159 669 128 588

5 Libya 100 071 62 933

6 Morocco 86 394 84 646

7 Angola 83 384 65 911

8 Sudan 57 911 52 214

9 Tunisia 40 348 39 766

10 Kenya 30 236 29 771

Source: IMF Data, 2008.

South Africa is the economic powerhouse of the continent, boasting the largest GDP,

followed by Egypt, Nigeria and Algeria. When comparing African countries using the GDP
(real) growth rate – which shows the increase in value of all final goods and services
produced within a nation in a given year, not taking into account PPP and inflation –
Africa has seen some of the fastest growth of all the economies in the world. Angola,
bolstered by oil fields, is the third-fastest-growing economy in the world, according to
2008 estimates. Moreover, in 2008, three of the world’s ten fastest-growing economies
were African (Angola, Equatorial Guinea and the Congo).

12
Table 1.3: GDP (real) growth rates

Date of
Country % Growth World Rank Continent Rank
Information

Angola 15,1% 2008 est. 2 1

Equatorial Guinea 11,5% 2008 est. 5 2

Congo, Republic of the 10,2% 2008 est. 7 3

Malawi 9,7% 2008 est. 10 4

Liberia 9,4% 2008 est. 13 5

Source: World Bank Data, 2008.

The table below shows the best-performing African countries by GDP at PPP per capita –

the value of all final goods and services produced within a nation in a given year divided

by the average (or mid-year) population for the same year.

Table 1.4: GDP per capita at PPP, 2008

GDP – per capita (US$) GDP – per capita (US$)

Rank Country
2008 2009 estimates

1 Libya 16 115 9 936

2 Equatorial Guinea 14 941 8 161

3 Seychelles 10 112 7 986

4 Gabon 9 987 6 810

5 Botswana 7 554 5 414

13
GDP – per capita (US$) GDP – per capita (US$)
Rank Country
2008 2009 estimates

6 Mauritius 6 872 7 099

7 South Africa 5 693 4 943

8 Angola 4 961 3 807

9 Algeria 4 588 3 640

10 Namibia 4 135 3 617

Source: IMF Data, 2008 Future African Economic Growth Prospects.

Table 1.5: Forecast Annual GDP Growth Rates by Region, 2008 – 2010

Yearly GDP Growth Rate (%)

Region
within Africa February May February May
2008 2009
2009 2009 2010 2010

Central Africa 4,0 5,0 2,8 2,0 3,6 3,2

East Africa 8,8 5,7 5,5 5,1 5,7 5,5

North Africa 5,3 4,1 3,5 3,5 4,1 4,1

Southern Africa 7,0 4,6 0,2 -0,1 4,6 4,6

West Africa 5,4 4,6 4,2 3,3 4,6 4,6

Africa 6,1 4,5 2,8 2,3 4,5 4,5

Source: World Economic Outlook.

14
Even in the face of the 2008 world economic recession brought on by the global financial

crisis, forecasts provided by the World Economic Outlook suggest that Africa will continue

its relatively strong growth in the next two years. GDP growth forecasts have shown that the

continent’s economy will be expected to grow by a rate of 2,5% in 2009 and 4,5% in 2010.

15
Contents
Chapter 2

South Africa’s Role in Promoting Infrastructure Development and

Capacity-Building in Africa

South Africa’s bilateral, regional and multilateral economic roles in Africa have expanded

rapidly since 1994 in line with the vision and strategic thrust of both NEPAD and the African

Union (AU). Most notably, South Africa has utilised bilateral, regional and multilateral relations

and tools in Africa to advance Africa’s development agenda, deepen regional economic

integration and co-operation, implement cross-border infrastructure development projects,

foster technical co-operation and capacity-building, facilitate technology transfer and the

development of information and communications technology, foster intergovernmental

relations and enhance the role of the private sector in African economies.

The broad thrust of South Africa’s foreign policy objectives in Africa has been focused on

ensuring economic and political stability and economic growth on the continent to advance

the African Agenda. These objectives encompass geo-strategic, political, security,

economic and technological interests. On the political front, South Africa has assisted

in capacity-building on the continent as part of its broader objective of strengthening

democracy and democratic institutions in Africa.

South Africa has also been involved in economic development initiatives on the continent

through a number of areas of engagement. On a multilateral level, South Africa seeks

to build linkages and advance Africa’s cause in multilateral institutions. In addition, in

keeping with efforts to advance regional integration, South Africa has spearheaded

integration in the Southern African region through leading roles in both the Southern

African Development Community (SADC) and the Southern African Customs Union

16
(SACU). Furthermore, the country is actively involved in developing and promoting a

preferential trade regime aimed at boosting intra-Africa trade. Finally, South Africa seeks

to advance economic development on the continent by promoting resource-based

industrial development, facilitating outward investment and enhancing bilateral economic

relations on the continent.

South Africa and the NEPAD

The African Development Agenda is driven to a large extent by the vision and strategic

framework for economic development on the continent, as articulated through the NEPAD.

The NEPAD framework outlines a shared vision for Africa that seeks to develop strong

democratic institutions, promote good governance, ensure the rule of law and promote

peace and security with a view to creating conditions that are conducive to attracting private

capital flows and placing the continent on a sustainable growth and development path.

"The New Partnership for Africa's Development is a pledge by African leaders, based
on a common vision and a firm and shared conviction, that they have a pressing duty to
eradicate poverty and to place their countries, both individually and collectively, on a path
of sustainable growth and development and, at the same time, to participate actively in the
world economy and body politic."
(NEPAD Positioning Document)

Since the NEPAD’s inception, South Africa has played an active role in championing its

objectives and programmes. Apart from hosting the NEPAD Secretariat, South Africa,

as one of five ‘initiating members’ that also include Algeria, Egypt, Nigeria and Senegal,

serves on the NEPAD Steering Committee, which comprises a total of 15 African states.

The South African government is committed to advancing the goals and objectives of the

NEPAD and has provided leadership and strategic guidance to the implementation of the

NEPAD processes, while also contributing significantly to the mobilisation of internal and external

support to assist in the realisation of the objectives of the NEPAD’s economic programme.

17
South Africa is also strongly committed to furthering efforts to deepen regional economic

integration on the continent through the NEPAD framework. To this end, the country

has been actively involved in efforts to improve market access; develop an intra-

Africa preferential trade system; diversify markets and methods of production in Africa;

improve investment climates in African states; implement an institutional framework to

facilitate economic engagement through the harmonisation of standards, improvement of

customs administration and procedures and capacity-building initiatives; and improve the

competitiveness of the continent’s export sectors in international markets.

Moreover, South Africa has played a key role in providing support and assistance to

NEPAD’s infrastructure programmes, particularly by transferring experience and expertise

in the implementation of spatial development initiatives (SDIs). In this regard, South Africa

has been supporting other governments and agencies in Southern Africa to implement

similar initiatives through its Regional SDI Support Programme.

18
MAPUTO DEVELOPMENT CORRIDOR

Providing South African Exporters and Importers with Cost-effective

Access to Nearby Deepwater Ports

… a major transport corridor in Southern Africa has re-awakened, offering the first glimpse

of enormous potential of an ongoing process to provide the region’s importers and exporters

as well as the respective governments with a central infrastructural foundation of economic

growth and development.

Source: Maputo Corridor Logistics Initiative, 2007

The Maputo Development Corridor is a transportation corridor that links South Africa’s northern

provinces and Swaziland to the nearest deepwater ports in Maputo and Matola in Mozambique.

Encompassing road, rail, border post, port and terminal facilities, the Corridor runs through

some of the most highly industrialised and productive areas in Southern Africa and provides

importers and exporters with cost-effective access to these deepwater ports.

The South African and Mozambican governments have both played prominent roles in the

establishment of the Maputo Corridor. In July 1996 the two governments signed a framework

agreement for the development of the Corridor, which included ancillary agreements for the

establishment of a toll road and a statement of intent to upgrade the railway and harbour.

Since then, South Africa and Mozambique have demonstrated great commitment to facilitating

infrastructure improvements along the Corridor.

The Maputo Corridor connects the Gauteng, Limpopo and Mpumalanga Provinces in South

Africa with deepwater ports in Maputo. The efficient access to the Maputo Port has provided

welcome relief to many South African importers and exporters, who have increasingly looked

to utilise Maputo as a supplementary port given the congestion at South Africa’s busiest port

in Durban. Through the Corridor, exporters and importers based in Gauteng – South Africa’s

industrial and commercial hub – have been afforded shorter, more cost-effective and faster

19
access to deepwater ports. Similarly, in Mpumalanga, which accounts for the majority of South

Africa’s coal mining output and half of the country’s national coal reserves, exporters of coal

have access through the Corridor to the Matola Coal Terminal at Matola Port in Maputo. This

access has enhanced the importance of the Mpumalanga Province in energy production.

The development of the Maputo Corridor has been accompanied by a number of infrastructure

improvements that directly benefit exporters and importers, as well as businesses transporting

their products between South Africa and Mozambique. Infrastructure facilities at Maputo

Port have been upgraded to the tune of US$70 million, and the port is now operated by

an international consortium. In addition, the N4 highway linking South Africa and southern

Mozambique has been upgraded to a modern toll route, with the 92 km stretch of road

serving as a fast and efficient road link from the South African-Mozambican border to Maputo

Port. Similarly, the development of the Corridor has seen the refurbishment of the railway

line between South Africa and Mozambique to serve as a seamless transportation route for

exporters and importers – with the South African railway utility, Spoornet, running the entire

line between South Africa and Maputo. Mindful of these benefits, several major South African

companies export through Maputo Port, including Capespan, BHP Billiton, Xstrata, Highveld

Steel and Columbus Stainless.

The development of the Maputo Corridor has also led to important improvements in the

efficiency of operations at border posts between South Africa and Mozambique, including the

extension of operating hours at the Lebombo-Resanno Garcia Border Post and an agreement

to establish a one-stop border post. On a more general level, the development of the Maputo

Corridor has contributed significantly to economic growth in Southern Africa through the

restoration of basic transport and marine infrastructure in the region. The long-term objective

of the Corridor is to serve as a catalyst for the re-establishment of the ports of Maputo and

Matola “as key economic growth centres in Mozambique and as competitive transit ports for

the vibrant import/export markets of South Africa and the neighbouring countries of Swaziland,

Zimbabwe, Botswana and Zambia”.

20
Regional Economic Integration

The potential economic benefits of regional integration in Africa are considerable,

particularly given the small size of many African economies. Generally, regional economic

communities are seen as strong vehicles to support economic growth and development

initiatives by increasing trade and expanding business opportunities through the expansion

of markets and, in cases where there are higher levels of integration, by enabling free

trade between members.

As far back as the mid-1960s, the Economic Commission for Africa (ECA) proposed the

division of the African continent into regional groupings as a means to boost economic

development. Today, the regional groupings in Africa are seen as key drivers of growth

and development on the continent in keeping with the NEPAD priority to accelerate intra-

Africa trade.

There are currently 14 regional economic and trade partnerships across Africa, at
differing levels of development; some are fully operational, and others, while having been
constituted, are not yet operational. In certain instances, there is either geographical
and membership overlap (or both) between these regional groupings. For instance, the
SACU and its associated monetary union (the Common Monetary Area), the SADC, and
the East African Community (EAC) all fall within the geographical area of the Common
Market for Eastern and Southern Africa (COMESA). Furthermore, Angola, the Democratic
Republic of Congo, Madagascar, Malawi, Mauritius, Swaziland, Zambia and Zimbabwe
are members of both SADC and COMESA. Similarly, the West African Economic and
Monetary Union (WEAMU) falls within the ambit of the Economic Community of West
African States (ECOWAS) – with Benin, Burkina Faso, Côte d’Ivoire, Mali, Niger, Senegal,

Togo and Guinea-Bissau all being members of both WEAMU and ECOWAS.

The following tables outline the membership and key features of prominent regional
economic groupings in Southern, East, Central, West and North Africa.

21
Southern Africa
Southern African Development Community (SADC)
Member States Key Features
• Angola
• Botswana
• Democratic
Republic of The SADC regional market consists of more than 260 million consumers.
Congo
• Lesotho The formation of the SADC free trade area (FTA) began in 2000 with the
• Madagascar participation of the SACU countries. Thereafter, Mauritius, Zimbabwe
• Malawi and Madagascar joined the FTA. These countries were joined by Malawi,
• Mauritius Mozambique, Tanzania and Zambia in 2008, bringing the total number of
• Mozambique SADC FTA members to 12. Angola, the Democratic Republic of Congo and
• Namibia the Seychelles are not yet members of the FTA.
• Seychelles
• South Africa In 2008, the SADC agreed to establish a free trade zone with the EAC and
• Swaziland the COMESA.
• Tanzania
• Zambia
• Zimbabwe
Southern African Customs Union (SACU)
Member States Key Features
The SACU is the oldest customs union in the world and was originally
established in 1910 as a customs union agreement between the then Union
of South Africa and the then High Commission Territories of Bechuanaland,
Basutoland and Swaziland. This agreement was updated and officially
launched on 1 March 1970 when South Africa, Botswana, Lesotho and
Swaziland signed the agreement. The latest SACU 2002 agreement came
into force on 15 July 2004.

The aim of the SACU is to maintain the free interchange of goods and
• Botswana facilitate trade between member countries with a view to improving economic
• Lesotho development.
• Namibia
• South Africa The members of the SACU are united in a customs free zone. All import duties
• Swaziland between members have been abolished and the customs union members
impose a common external tariff (CET) on all non-members. Goods grown,
produced or manufactured within the Common Customs Area can be traded
free of customs duties and quantitative restrictions between SACU member
states (except as provided elsewhere in the agreement).

Member States Key Features

• Benin
• Burkina Faso
• Cape Verde
• Côte d’Ivoire
• Gambia
• Ghana The ECOWAS was founded on 28 May 1975 with the signing
of the Treaty of Lagos, and was established with the mission
• Guinea (suspended after
of promoting economic integration among its West African
2008 côup d’état)
member countries.
• Guinea-Bissau
• Liberia The primary objective of the ECOWAS is to achieve
• Mali ‘collective self-sufficiency’ for its member states through
• Niger (suspended after economic and monetary union and the creation of a single
2009 côup d’état) large trading bloc.
• Nigeria
• Senegal
• Sierra Leone
• Togo

25
West Africa
West African Economic and Monetary Union (WEAMU)
Member States Key Features
• Benin
The WEAMU is an organisation of eight West African countries established
• Burkina Faso on 10 January 1994 with a treaty signed by heads of state at dakar,
• Côte d’Ivoire Senegal.
• Guinea-Bissau
The WEAMU is a customs and monetary union between certain members
• Mali of the ECOWAS and is designed to promote economic integration among
• Niger countries that share a common currency, the CFA franc.
• Senegal
The core objectives of the WEAMU include:
• Togo Greater economic competitiveness through open and competitive markets,
along with the rationalisation and harmonisation of the legal environment
The convergence of macroeconomic policies and indicators;
The creation of a common market;
The co-ordination of sectoral policies; and
The harmonisation of fiscal policies.

Mano River Union (MRU)

Member States Key Features
• Liberia
The MRU was established in 1973 as an international association between
• Sierra Leone Liberia and Sierra Leone. Guinea subsequently joined the union in 1980.
• Guinea
The primary purpose of the MRU is to foster economic co-operation
between the three member countries. However, civil wars in Liberia and
Sierra Leone have meant that many of the objectives of the MRU have not
been achieved. Nevertheless, the Union was reactivated on 20 May 2004
at a summit of the leaders of the three member states.

North Africa
Arab Maghreb Union (AMU)

Member States Key Features

• Algeria
The first Maghreb Summit of the five heads of state of Algeria, Libya,
• Libya
Mauritania, Morocco and Tunisia was held in June 1988 as a precursor to
• Mauritania the formal signing of an agreement to establish a Pan-Arab trade agreement
• Morocco designed to achieve economic and political unity in North Africa.
• Tunisia
The chairmanship of the AMU rotates among the five member countries,
with the chairmanship held in turn by each country.

26
North Africa

Community of Sahel-Saharan States (CEN-SAD)

Member States Key Features

• Benin
• Burkina Faso
• Central
African
Republic
• Chad
• Comoros
• Côte d’Ivoire
• Djibouti
• Egypt
• Eritrea
• Gambia The CEN-SAD was originally established in 1998 by six founding members
• Ghana – Burkina Faso, Chad, Libya, Mali, Niger and Sudan. Membership of the
• Guinea Community has since grown to 28 countries.
• Guinea-
A primary goal of the CEN-SAD has been to achieve economic unity among
Bissau
member countries through the facilitation of free movement of people and
• Kenya
the establishment of a free trade area. However, in practical terms the
• Liberia
implementation of a free trade area between member states has proven
• Libya
difficult due to the overlapping membership of many countries with economic
• Mali groupings and trade blocs that are more advanced in terms of integration,
• Mauritania including ECOWAS, ECCAS and COMESA.
• Morocco
• Niger
• Nigeria
• São Tomé e
Príncipe
• Senegal
• Sierra Leone
• Somalia
• Sudan
• Togo
• Tunisia

27
Chapter 3

The Wealth of Opportunities in Africa

In many senses, Africa represents a vast, untapped market. While the continent’s

abundant natural resources continue to attract investors, attention has also turned to

Africa’s consumers with investors and businesses targeting opportunities in diverse areas

ranging from telecommunications to financial services. The continent boasts a fast-growing

population together with a potentially massive consumer base of more than 900 million

consumers, characterised by growing needs and a rapidly emerging middle market with

considerable buying power. In addition, Africa is widely recognised as representing the

newest frontier for growth opportunities in terms of trade and investment. This has been

reflected in the sharp growth in foreign direct investment (FDI) in SSA and comparatively

high average returns on FDI – more than double the average returns in Asia and four times

those in the G7 countries (Canada, France, Germany, Italy, Japan, the United Kingdom

and the United States). Moreover, Africa has experienced economic growth of more than

5,5% over the past five years. According to the 2009 African Economic Outlook, in spite

of the pervasive effects of the global financial crisis, the overall African economy was still

expected to grow by 2,8% in 2009.

Export opportunities on the continent have been expanded by a steady reduction in trade

barriers, evidenced by the fact that the average unweighted tariff rate for SSA has fallen

from 30% in 1990 to 16,4% in 2006. In addition, the existence of six key trading blocs in

Africa – the SADC, SACU, COMESA, ECOWAS, CEMAC and the EAC – has enhanced

28
commercial opportunities on the continent. Specifically, the trading blocs have created

opportunities to operate across national borders with common customs duties or tariffs, to

capitalise on the larger and more dynamic consumer market place or manufacturing base

afforded by a group of countries, and to spread political risk.

A variety of opportunities for commercial activities and investment exist in a range of

sectors across Africa. For instance, the continent’s fast-expanding population has fuelled

increasing energy demands. To meet the level of demand, countries such as Algeria

are actively seeking investments in private power provision. The absence of meaningful

competition in some industries – such as the production and distribution of certain cheap

luxuries – in many African economies has also created opportunities for firms to prosper.

Moreover, the relatively strong economic growth in Africa has boosted demand for

equipment, services and consumer products. In particular, sectors offering great potential

include oil field development, electric power generation, transportation, health care,

telecommunications, computers and software.

Within the telecommunications sector, the cellphone market represents one market that

offers enormous potential and opportunity for growth across the continent. Since 2001,

the number of cellphone subscribers in Africa has grown at an average annual rate of 50%

to reach some 200 million subscribers in 2007. Nevertheless, this substantial number

of subscribers still only represents a total market penetration rate of roughly 20%. This

suggests that there remain considerable opportunities for growth in the sector.

29
Contents
MTN GROUP
Connecting the Continent

In 1998, MTN became the first South African cellphone network to expand its operations
into Africa. The decision to venture into African markets was based on a number of factors,
including the realisation that the South African market had neared saturation and Africa
provided new market opportunities, a high demand for telecommunications on the continent,
geographic proximity, good economic growth prospects in several African countries, as well
as the availability of strong local partners. Moreover, the company recognised that its existing
expertise and skills, particularly in the prepaid market, could easily be transferred to other
African countries.

The MTN Group’s Africa expansion strategy has focused on developing regional hubs around
which ‘clusters’ of business are created. This ‘hub and cluster’ strategy is designed to minimise
the company’s network deployment costs and to leverage its geographical spread. To this end,
MTN decided to divide Africa into three clusters: West Africa; Southern Africa; and East Africa.
Within each cluster, big-country operations provide operational support to and share resources
with small-country operations.

Notwithstanding the challenges experienced by MTN – such as an uncertain political and

regulatory environment, the high cost of network deployment, and infrastructure deficiencies –
the company’s foray into Africa has been a success. MTN has become the leader in the mobile
telecommunications business in Africa: it is the top cellular brand in each African country
in which it operates in terms of either market share or brand value. The number of African
countries (outside South Africa) in which MTN operates has grown from three in 1998 to fifteen
today. Beyond its home base the telecommunications giant has an operational presence in
Cameroon, Nigeria, Rwanda, Swaziland, Benin, Lesotho, Botswana, Zambia, Liberia, Côte
d’Ivoire, Ghana, Guinea Bissau, Guinea, the Republic of Congo and Sudan.

The MTN Group’s experience in Nigeria represents a clear case of the company’s great
success in Africa. This is borne out by the fact that in recent years MTN Nigeria’s subscribers
have surpassed the company’s South African operation; by 2007 MTN Nigeria had 16,5 million
subscribers compared with MTN South Africa’s 14,8 million. The success of the Nigerian
subsidiary gave MTN the confidence to pursue its expansion beyond the shores of Africa and
into the Middle Eastern territories of Syria, Iran, Yemen, Afghanistan and Cyprus.

30
In the transport sector, many viable opportunities exist for investors, particularly in terms

of development corridors and spatial development projects. African cash crops also still

remain potentially lucrative markets for investment, particularly cocoa, coffee, cotton,

peanuts and tea.

Having said that, possibly the greatest opportunity and potential for investment lies in

the continent’s vast mineral resources, which remain largely untapped. For example,

sizable concentrations of copper are found in the Democratic Republic of Congo and

Zambia, while the continent collectively contributes more than half of the world’s cobalt

and tantalum supply. In many parts of the continent, mining exploration and expansion

has been stimulated by strong commodity growth, with further expectations of particularly

strong demand from the two significant emerging powers in the international economy

– China and India – for iron ore and copper over the next ten years. Opportunities for

platinum mining expansion and replacement projects are also expected to continue

to proliferate, as are gold and diamond mining activities in countries such as Ghana

and Botswana. This suggests that there are numerous unexploited pockets of natural

resources across the continent, meaning that the continent’s mining and energy sectors

are likely to remain attractive areas for investment for decades to come.

31
EXXARO
A Black-controlled and Diversified Mining Company Making Great Strides

Exxaro is the largest South African-based mining company. It also operates facilities and
offices elsewhere on the African continent, as well as in Asia, Europe and Australia. The black-
owned company’s operations are focused on coal, mineral sands, base metals and industrial
minerals. It was formed out of an empowerment transaction that involved the unbundling of
Kumba Resources’ non-iron ore assets, which saw Kumba relisted as Exxaro. The company
has a number of operations and interests in Southern Africa. In Namibia, it has base metals
and mineral operations located at the Rosh Pinah zinc/lead mine in the southern part of the
country. The company’s coal assets include the Mmamabula Central Mine in Botswana. It also
boasts attractive mineral sands resources located at Toliara Sands in Ranobe, Madagascar.

Domestically, Exxaro is currently the largest supplier of coal to Eskom and South Africa’s most
prominent producer of metallurgical or coking coal, and enjoyed impressive growth and profit
performance in 2008 and 2009. In 2008, the company’s net operating profit increased by 71%
(a R2,5 billion increase). Net operating profit rose by a further 18% to reach R953 million in the
first six months of 2009, with coal production up by 3% in this period. The company owns the
Grootgeluk coal mine in Limpopo, which is located on the Waterberg coal field that extends into
neighbouring Botswana. Grootgeluk is home to the world’s largest coal-processing plant. This
is utilised to feed Eskom’s Matimba power station. Similarly, Exxaro has signed an agreement
to supply Eskom’s Medupi power station – which will begin buying coal from Exxaro at the end
of 2011.

Exxaro is poised to benefit from the anticipated sustained recovery in the global economy. The
company’s favourable position in the coal-rich Waterberg region prompted it to target a number
of new coal projects, possibly including further activity in Botswana, which promise to contribute
to extensive growth. To this end, Exxaro has set its sights on producing 50 measurement tons
(Mt) of coal from the Waterberg area in the next decade as part of its overall goal to mine a
total of between 75 Mt and 85 Mt of coal on an annual basis in the next ten years. Moreover,
the opportunity to expand business in terms of mineral sands resources in South Africa and
Madagascar remains a key priority.

32
South Africa’s geographical contiguity and existing political and economic ties with the

rest of the continent give it a significant advantage over the world’s traditional powers

and major emerging economies in terms of capitalising on these commercial activities.

Already, South Africa exports a wide range of manufactured goods and services to many

other African economies. Moreover, many companies based in South Africa have invested

heavily on the continent. Yet there remains great scope for the country to capitalise further

on the wealth of opportunities that exist in Africa.

33
Contents
CHAPTeR 4

The Role of the dti in Promoting Greater Intra-African Trade and

Investment Opportunities

General Roles of the dti in Enabling Greater Intra-Africa Opportunities

the dti’s vision is firmly rooted in creating a vibrant economy in South Africa and across

the African continent that is characterised by growth, employment generation and equity,

and built on maximising the full potential of all citizens. To achieve this, the dti has become

an outwardly focused, customer-centric organisation. The figure below depicts the extent

and scope of the diverse roles performed by the dti in the local and intra-Africa contexts.

INTERNATIONAL

INTERNATIONAL
REGIONAL BODIES
(SACU, SADC, AU, NEPAD)
NATIONAL (WTO,UNCTAD, IBSA,
G8+5, G20)

34
The general roles of the dti in relation to intra-Africa activities are enshrined in the

following commitments:

• To advise the President of the Republic of South Africa on matters related to trade and

investment, and industrial activity;

• To establish policies, laws and standards for the effective and efficient operation of

the trade and industrial activities between South Africa and all African states and

institutions;

• To provide regulations and advice to both local and international firms seeking to

export their products and services to African countries;

• To lobby the government for trade and industry-related reforms that will encourage

South African companies to invest in other African economies;

• To supervise, monitor and control the country’s local, regional and international trade

and industrial activities;

• To propagate and advance the trade activities of South Africa on a nationwide, region-

wide and worldwide scale;

• To provide leadership to the South African economy through its understanding of the

economy, and its knowledge of economic and trade opportunities and potential; and

• To provide a predictable, competitive, equitable and socially responsible environment

for investment, enterprise and trade.

In addition, the dti performs a number of key strategic roles relevant to facilitating greater

intra-Africa commercial co-operation. To this end, one of the most important recent policy

developments for the dti was the release of four key medium-term strategic objectives

over the 2006 to 2009 period. The strategic objectives specifically related to the dti’s

intra-Africa role include:

35
• Contributing towards the development and regional integration of the African continent

within the NEPAD framework;

• Raising the level of South Africa’s exports and promoting equitable global trade;

• Adopting new national regulations that will promote greater intra-Africa investment by

South African firms; and

• Growing South Africa’s small and medium enterprises (SMEs) across all sectors in

order to stimulate their full participation in trade and investment activities in the intra-

Africa context.

the dti’s Facilitation Services

the dti performs a number of trade and investment facilitation services that are designed

to facilitate intra-Africa opportunities for South African investors and businesses in Africa

and, at the same time, support economic growth and capacity-building on the continent.

In addition to the functions performed by the dti’s International Trade and Economic

Development Division (ITED) and its three business units, together with Trade and

Investment South Africa (TISA) Division, the dti also assists regional integration through

interaction with South Africa’s foreign offices on the continent. Support to South African

exporters is provided through the dti’s Export Marketing and Investment Assistance

(EMIA) and various export councils – which enable small businesses to access the dti’s

support structures and international markets on a collective basis. Furthermore, the dti

publishes country briefings and hosts round tables and seminars highlighting trade and

investment opportunities in African countries, and undertakes business missions into

Africa in order to inform and assist businesses and investors seeking to gain access to

African markets.

36
South Africa‘s own growth and economic development can serve as an important driver

of African economic development. South Africa, through the dti, plays a critical leadership

role in facilitating economic growth across the continent through a number of diverse areas

of engagement with African countries. These engagements are focused on assisting with

the facilitation of cross-border infrastructure and resource-based industrial development

through the use of public and private enterprises. In addition, on a multilateral level, the dti

is actively involved in the establishment of multilateral linkages and in the advancement

of Africa’s cause in multilateral institutions. Finally, the dti’s efforts to improve market

access for African products through the development of a preferential trade regime and

the promotion of intra-Africa trade, together with import promotion and the facilitation of

outward investment, have helped to boost export-oriented growth across the continent.

the dti, in collaboration with the private sector in South Africa, is poised to play a

growing role in contributing towards greater African competitiveness and in forging

international partnerships that extend beyond the customary handouts that have long

characterised Africa’s relationship with the world’s most advanced nations. As Pat Davies,

Chief Executive of Sasol South Africa, said during a session entitled ‘Taking Control of

Global Partnerships’ at the 2008 World Economic Forum on Africa: “We have a unique

combination of developed world business skills, but we have learned how to do business

in emerging markets. This needs to be emphasised more, and we can lead the way.”

37
Chapter 5

An Overview of South African Investment in African Countries

South Africa is considered an economic giant relative to other African economies, boasting

a GDP 80 times larger than the average African state. Over the past fifteen years there

has been a phenomenal expansion of trade relations between South Africa and other

African countries – with 18% of South Africa’s exports destined for the continent in 2008.

However, bilateral trade between South Africa and the rest of the Africa is still heavily

skewed in the former’s favour, with the country enjoying a substantial trade surplus

with most of its African trade partners. Indeed, prior to the onset of the global economic

crisis, South Africa’s economic expansion into Africa had seen the country increase its

trade with Africa by 300% since 1994. South Africa’s exports into Africa increased from

US$1,3 billion during 1994 to US$5,9 billion in 2003. In comparison, imports from Africa

into South Africa increased from US$0,4 billion to US$1,2 billion over the same period.

In recent years, SSA has benefited from a surge in FDI, which has increased from a little

over US$4 billion in 1995 to US$18 billion in 2005. South Africa has played a significant

part in this growing investment. In 2002, South Africa became the third-largest foreign

investor in Africa, behind only the United Kingdom and the United States of America (USA),

marking the country as the most important African investor in the region. During 2005,

South Africa also became the largest source of new FDI into Africa – a clear indication of

the country’s rapidly expanding presence in the African economy. Moreover, the country’s

outward FDI in Africa in 2006 amounted to 6,4%, representing a large proportion of the

total FDI stock of African countries in that year.

38
This rapid expansion of South African FDI into Africa has been supported by the

liberalisation of the country’s regulatory regime for outward FDI, together with a

promulgation of bilateral investment treaties and double taxation agreements. In addition,

the liberalisation of South Africa’s trade and exchange controls has also served to raise

domestic competition, thereby encouraging South African companies to look to other

markets on the continent.

South African companies have established a burgeoning footprint in Africa. Among the

top 100 companies listed on the Johannesburg Stock Exchange in 2004, only eight did

not have operations in the rest of Africa. In Nigeria, for example, there are currently more

than 60 South African companies operating in the country – including MTN, Stanbic

Merchant Bank Nigeria Ltd and Protea Hotels to name but a few. Within the Southern

African region, the expansion of South African business into the region has been

particularly impressive: during 1994 the total stock value of South African companies in

the region was approximately US$850 million and, in 2004, this had increased six-fold

to nearly US$5,2 billion. One of the primary reasons for the success of South African

companies operating in the region is that they have proven to be better than many of

their global counterparts at assessing risk on the continent. Moreover, South African firms

have distinguished themselves from traditional investors by demonstrating a willingness

to invest in a broad spectrum of sectors.

SHOPRITE
Moving First to Seize Retail Opportunities in Africa

The expansion of Shoprite’s retail stores into Africa has been rapid and, despite the presence
of significant logistical challenges, remarkably successful. In addition to South Africa, the
company now operates 188 stores in 15 other African countries (Angola, Botswana, Ghana,
Lesotho, Madagascar, Malawi, Mauritius, Mozambique, Namibia, Nigeria, Swaziland, Tanzania,

39
Uganda, Zambia and Zimbabwe). In the 2008 financial year, Shoprite’s revenues from its
non-South African operations amounted to R5,5 billion, growing by 38% in comparison to the
previous year. Indeed, just in the six-month period to December 2008, Shoprite’s turnover from
its operations in the rest of Africa grew by 54%, and trading profit rose by more than 100%.
Operations in Africa (excluding South Africa) now account for 14% of Shoprite’s total revenue.

After initially confining its trading to Namibia, Swaziland and Lesotho, Shoprite ventured into the
rest of the continent in 1995 by entering the Zambian market. This was seen as an experimental
exercise, which has since grown to become Shoprite’s biggest and most mature operation
outside of South Africa – with the group currently operating 15 supermarkets in Zambia.

By expanding into Africa, Shoprite has managed to create a strong competitive advantage.
At a time when many other South African-owned companies were looking towards developed
markets to expand their consumer base, Shoprite targeted developing markets in Africa and
India. As a low-cost provider, Shoprite targeted market opportunities in Africa where consumers
have comparatively low disposable incomes and seek good-quality products at low prices. As
the first mover among South African retailers expanding into the continent, Shoprite has gained
a considerable advantage by being able to build early customer loyalties and strengthen
relationships within these countries over time.

Shoprite has adopted a simple and effective strategy for entering markets on the continent.
At the outset, the selection of potential markets is informed by a thorough research process.
Thereafter, the development of country-specific business plans, the establishment of trading
partnerships, obtaining investment licences, investment, and recruiting and training staff all form
important components of the retail group’s approach to setting up operations in the selected
country. In addition, prior to entering a market, Shoprite’s CEO, Whitey Basson, arranges to
meet personally with the president of the country to introduce Shoprite.

According to Shoprite Chairman, Christo Wiese, “We want to be clear about who we are and
what it is that we want to do. We’ve always had a warm reception.”

In Zambia, distribution to all Shoprite stores is done on a door-to-door basis, with vehicles
loaded in South Africa and destined for specific store deliveries in Zambia. Shoprite has
established partnerships with forwarding and clearing agents in Zambia as well as with
transporters, and set up an innovative ‘document processing’ system to manage transport and

40
forwarding and clearing processes. This has ensured that the process of transporting products
across the border remains relatively simple. In contrast, for fresh food products, Shoprite has
set up a distribution centre in Zambia – through the acquisition of Fresh Market – to deal with
the distribution of fruits and vegetables to its various stores in the country.

The Shoprite Group is realistic about the challenges associated with trading in African markets,
but these challenges are by no means impossible to overcome. Some of the supply chain
challenges that the supermarket chain has faced range from complex customs clearance
procedures and delays at border posts, to inadequate infrastructure and a lack of common
standards both within and between countries. Furthermore, a lack of available retail space
meant that Shoprite was able to open just five new stores across the continent in the 2008
financial year. In order to overcome some of these challenges, Shoprite employs a number
of ‘information gatherers’ or ‘country buddies’ who are tasked with advising the retailer on
basic issues related to the identification of key contact persons and the provision of advice on
political and business developments and undercurrents.

The Shoprite experience in Africa provides compelling evidence of the potential wealth of
profitable opportunities for South African businesses in retail markets across the continent.
Massmart, Mr Price, Pep Stores, Tiger Brands and Game have all already followed Shoprite in
seizing opportunities in African markets. And, although African markets have not been shielded
from the fall-out from the global financial crisis, retail opportunities in Africa will continue to
abound. As Whitey Basson explains, “People are now used to air-conditioning, cellphones,
movies and decent stores - there is no way they will turn back.”

Key Investment Sectors and Characteristics

Currently, a significant share of South Africa’s investment on the continent has taken
place within its immediate neighbours in the SADC region. In contrast, South African
companies and investors have invested relatively little in the Francophone and North
African countries. Large-scale investments from companies such as Mozal, Sasol and
AngloGold Ashanti remain relatively rare, with the dominant sources of investment
coming in the form of medium-sized investments in the agro-business, railways, finance,
telecommunications, retail and utilities sectors.

41
Africa’s wealth has always been associated, to a large extent, with its abundance of

natural agricultural and mineral resources. In many senses, agriculture represents the

mainstay of the African economy, with the agricultural sector representing a key contributor

to GDP across the continent. Over the past fifteen years, agriculture has accounted for

approximately one-third of growth in SSA; and, despite holding a declining share in GDP

in many African economies as per capita incomes rise, agriculture remains an important

contributor to growth on the continent. Within this context, the agricultural sector in Africa

continues to attract investment from South African companies that recognise the strong,

and rising, demand for food in Africa, as well as the reality that, for the most part, SSA’s

comparative advantage remains in primary activities and agro-processing due to natural

resource endowments that favour agriculture and a lack of skilled labour.

ILLOVO SUGAR
Sweetening Southern Africa

Illovo is a leading low-cost sugar producer in South Africa with a global presence. The Illovo
Sugar Group is also a significant manufacturer of high-value downstream products. In line
with its global aspirations, the group has sought to become a leading sugar and downstream

products operation in Africa, and is currently Africa’s largest sugar producer.

Illovo’s African operations span six African countries (including South Africa), with the group
boasting extensive agricultural and manufacturing operations in Malawi, Mozambique,
Swaziland, Tanzania and Zambia. Illovo’s expansion into Africa has enabled the group to
develop a wide geographic and climatic spread of core interests – the countries in which the
group has established agricultural and manufacturing operations all have excellent climatic
and soil conditions as well as secure water sources for irrigation, thereby serving as ideal
locations for “the cultivation of high-yielding and excellent-quality sugar cane.” The company
manages agricultural estates in Malawi, Mozambique, Swaziland, Tanzania and Zambia, with
these estates producing a combined aggregate of 5,1 million tonnes of cane. Each of these
countries also contributes significantly to the group’s total sugar-production, which amounted
to 1,8 million tonnes. Specifically, while South Africa remains Illovo’s largest sugar-producing
location – the group produced 920 000 tonnes in the country in 2008/09 – the Illovo Group

42
Contents
presided over the production of 304 000 tonnes in Malawi, 210 000 tonnes in Swaziland, 193
000 tonnes in Zambia, 118 000 tonnes in Zambia and 76 000 tonnes in Mozambique over the
same period.

“Production growth has been significant since the group first embarked on its expansion
outside South Africa and strong cash flows have been maintained enabling dividends to be
paid consistently, twice covered by annual earnings.”
Source: Illovo Sugar Annual Report 2009.

This production is underpinned by extensive ownership of operations in each of these countries.

In Zambia, Illovo owns 90% of Zambia Sugar, managing a sugar factory and a sugar refinery
as well as interests in speciality sugar/syrup plants. Similarly, in Malawi, Illovo owns 76% of
Illovo Sugar (Malawi), boasting 2 sugar factories and 2 sugar refineries alongside interests in
speciality sugar/syrup plants. The Illovo Sugar group holds a 72% stake in Maragra Açúcar Sarl
in Mozambique, with sugar cane estates and one sugar factory in the country. The group owns
smaller, but significant, stakes in Umbombo Sugar Limited (60%) in Swaziland and Kilombero
Sugar Company in Tanzania (55%), with sugar cane estates, two sugar factories and one
sugar refinery in Tanzania.

In most of these countries Illovo accounts for significant shares of production in the local industry.
For instance, the company is the sole producer of sugar in Malawi, while it is responsible for
87% of local sugar production in Zambia. Furthermore, the group accounts for 42% of sugar
industry production in Tanzania, and contributes smaller, yet important, shares of local industry
production in Swaziland (33%) and Mozambique (31%).

The African countries in which Illovo has established its operations also provide a large
consumer market, contributing to Illovo’s presence as a major supplier of sugar to African
consumer and industrial markets. Furthermore, the group supplies pre-packed and bagged
sugar into other regional markets within Africa. While the group produces syrup and speciality
sugars primarily for domestic consumption in South Africa and Zambia, its speciality sugars
produced in Malawi and Zambia also gain preferential market access into the European Union
and, in the case of Malawi, into the USA as well.

43
Contents
Illovo’s operations in Africa have made major contributions to the group’s overall revenue
and operating profit. Operations in Malawi contributed one-fifth (20%) of total group revenue
in 2009, while operations in Zambia accounted for 13% of the Illovo Group’s total revenue.
In comparison, revenue from operations in Swaziland and Tanzania contributed 9% and 8% to
total group revenue, respectively. Finally, revenue from the group’s operations in Mozambique
provided a further 4% of the Illovo Group’s total revenue in 2009. Illovo’s operations in these
countries have also made sizeable contributions to the groups’ total operating profit. Most
notably, in 2009 Illovo’s operations in Malawi contributed 45% of the group’s total operating
profit, eclipsing the equivalent contribution of 19% from the group’s South African operations,
partly due to record cane and sugar output in Malawi and domestic sugar sales that increased
by 11% in comparison to the previous season. The group’s operations in Zambia (12%),
Tanzania (9%) and Mozambique (6%) also made significant contributions to the group’s total
operating profit in 2009.

“The group continues to consolidate its South African operations, recognising the potential for
superior returns elsewhere in Africa.”
Source: Illovo Sugar Annual Report 2009.

The Illovo Sugar Group has plans for further expansion in each of the countries in which
it already operates. For example, the group has entered into a joint venture with a local
community at Maragra in Mozambique to develop 4 000 hectares of land for cane production,
with the joint venture expected to product 400 000 tonnes of cane on an annual basis. Plans
for the expansion of the Ubombo factory in Swaziland are also underway; and the group has
already completed the final phase of a major expansion project to increase the capacity of
the Nakambala sugar mill in Zambia. Furthermore, the group is set to expand beyond the
existing countries in which it operates, with a proposed greenfields project in Mali, where it
is anticipated that the mooted operation will ultimately produce 195 000 tonnes of sugar. The
group’s investment on the African continent is set to continue. According to the Illovo Sugar
Group’s Annual Report 2009:

Major investment outside South Africa will be undertaken in areas that display positive and
stable social, political and economic fundamentals, have adequate water and land resources,
favourable climatic and agronomic conditions, strong local sugar markets and good export
potential.

44
Aware of Africa’s vast mineral resources, South Africa has traditionally shown keen

interest in investing in the continent’s mining sectors. Since 1994, however, South Africa

has made extensive leaps in diversifying its investment in Africa. This has come about

mainly because of the South African government’s commitment to the continent and its

people.

the dti, apart from highlighting the growth potential of the mining and minerals sectors

in Africa, has identified the following sectors as also showing growth and investment

potential on the continent:

• Retail;

• Telecommunications;

• Beverages;

• Hospitality;

• Construction;

• Logistics;

• Financial services; and

• Energy.

In particular, South African companies in the financial services and telecommunication

sectors have increasingly looked to the African continent as a strategic investment

partner. In the financial services sector this has been motivated by the ease of entering

the African market, coupled with an ability to compete successfully within African financial

markets. In the telecommunications sector, South African companies have seen Africa

as the perfect investment opportunity because of the underdeveloped nature of fixed-line

communication in many African countries.

45
On a broader level across sectors, investing regionally, when being unfamiliar with the

international market, poses less investment risk. Moreover, Africa now offers the world’s

highest rate of return on investment, despite many international investors continuing to

harbour negative perceptions related to investing on the continent – fuelled by issues

such high levels of poverty, civil unrest and war and the debilitating effects of the HIV and

AIDS pandemic.

A continent Benefiting from South African Investment

South Africa plays a significant role in countries such as the Democratic Republic of

Congo, despite the negative publicity which the country receives because of its ongoing

political instability. One of the positive aspects of South African investment has been

its ability to overcome the considerable business and political risks currently present in

certain African countries, with many investors believing that these, primarily political, risks

can be managed. In addition, South Africa’s investment in Africa has played an important

role in demonstrating to the international community the merits of looking at African

countries individually, rather than considering the continent as a whole and assuming

that all African countries are plagued by the same level of political and business risk. For

instance, countries such as Benin, Ghana, Mali, Mauritius and Senegal have emerged

as new stars on the horizon, and have begun to attract significant attention from South

African investors.

South African investment in Africa must also be contextualised within the broader

framework of the efforts of the South African Government to improve socio-economic

conditions across the continent. In this regard, investment by South African businesses

has facilitated the transfer of knowledge and business know-how on the continent.

Moreover, South Africa has served as the gateway for foreign investors who seek to

penetrate the wider African markets.

46
STANDARD BANK GROUP
Banking on Africa

Standard Bank is an established global financial services group with strong African roots.
Outside its South African base the bank operates through Stanbic, its African division, in 17
African countries. Standard Bank’s services in Africa encompass retail banking, corporate and
project finance, treasury, trade finance and commercial banking.

The banking group’s expansion has been inspired mainly by the significant opportunities arising
from the underdeveloped nature of the financial services sector in Africa. These opportunities
are partly in the domestic financial services sector, but primarily in providing services for
South African companies taking their businesses north of the border. South African banks
have a sizeable competitive advantage in Africa due to their capital strength and technological
capabilities. They also have a ready-made client base of South African companies operating in
African countries which reduces client risk.

Standard Bank’s African operations extend to Nigeria, the Democratic Republic of Congo,
Ghana, Kenya, Tanzania, Uganda, Madagascar, Malawi, Mauritius, Botswana, Lesotho,
Mozambique, Namibia, Swaziland, Zambia, Zimbabwe and Angola. This extensive footprint
makes it one of the biggest banking operations on the continent. The setting up in 2008 of an
office in Angola, which focuses on corporate and investment banking, has opened doors for
Standard Bank to enter one of Africa’s fast-growing economies.

Standard Bank’s business in Africa has been bolstered by the acquisition of a 20% stake,
valued at US$5,5 billion, in the financial services group by the Industrial and Commercial Bank
of China (ICBC), the largest bank in the world in terms of market capitalisation. Described as
a ‘win-win’ business transaction, the deal is expected to provide ICBC with an already large
footprint in Africa while it will also enable Standard Bank to tap into commercial opportunities
stemming from the growing Chinese presence in the rest of Africa. Moreover, it is hoped that
a far stronger balance sheet flowing from the deal will enable Standard Bank to be bolder in
venturing into other emerging markets.

47
48
Part III:
Country-Specific Profiles
This part of the Handbook provides country-specific information

designed to assist in the identiﬁcation of target export markets and/

or investment destinations on the African continent. Individual country

proﬁles are provided for 53 African countries, and are presented in the

following ﬁve regional groupings:

• Southern Africa

• East Africa

• Central Africa

• West Africa

• North Africa

49
SOUTHERN AFRICA
• Angola • Namibia
• Botswana • Seychelles
• Lesotho • South Africa
• Madagascar • Swaziland
• Malawi • Zambia
• Mauritius • Zimbabwe
• Mozambique

50
Seychelles

Malawi

Angola

Mozambique
Zambia

Madagascar Mauritius

Zimbabwe
Namibia
Botswana

Swaziland
South Africa

Lesotho

51
Republic of Angola
Geography and People

Southern Africa, bordering the south Atlantic Ocean, between Namibia

and Democratic Republic of the Congo. The province of Cabinda is
Location
an enclave, separated from the rest of the country by the Democratic
Republic of the Congo.

Area 1 246 700km2

Capital city Luanda

Other major
Benguela, Cabinda, Huambo, Lobito, Namibe
cities

Semi-arid in south and along coast to Luanda; north has cool, dry season
Climate
(May to October) and hot, rainy season (November to April)

Natural Petroleum, diamonds, iron ore, phosphates, copper, feldspar, gold,

resources bauxite, uranium

Ports of Luanda (it has four terminals: Unicargos, Intertransit, SGEP and
Key ports
a conventional quay), Lobito, Namibe and Malongo

Population 12 799 293 (2009 est.)

Population
2,095%
growth rate
Life
38,2 years
expectancy

0 – 14 years: 43,5%
Age
15 – 64 years: 53,7%
distribution
65 years and over: 2,7%

Languages Portuguese (official), indigenous languages

Ovimbundu (37%), Kimbundu (25%), Bakongo (13%), Mestico (mixed

Ethnic groups
European and native African, 2%), European (1%) and other (22%)

Religions Indigenous beliefs (47%), Roman Catholic (38%), Protestant (15%)

52
Economy
Current account (as % of GDP) -3,4%

Savings rate (% of GDP) 37,03%

Foreign direct investment flows US$15,5 billion

Size of labour force 7,569 million

Unemployment -

Currency Kwanza (AOA)

2007 2008

Average exchange rate (versus US$) 76,6 75,02

GDP US$59,26 billion US$84,94 billion

GDP growth rate 20,3% 13,2%

GDP per capita (PPP) US$8 200 US$9 000

GNI US$77,20 billion US$ 90,46 billion

GNI per capita (PPP) US$ 4 400 US$ 5 020

Inflation rate (consumer prices) 12,2% 12,5%

Growth and Structure of the Economy

Angola currently ranks as one of the fastest-growing economies in the world, with
growth averaging 20% between 2005 and 2007. Angola’s high growth rate is driven
by its burgeoning oil sector, with record oil prices and rising petroleum production. Oil
production and its supporting activities contribute about half of GDP and 90% of exports.
The current account balance rose from US$9,402 billion in 2007 to about US$17,11 billion
in 2008 as a result of both the increase in oil production volumes and high crude oil prices
on international markets.

53
The Angolan economy is dominated by extractive industries, with prominent diamond

and oil (essentially offshore) sectors. The oil industry and its supporting activities are the

lifeblood of the Angolan economy, accounting for approximately 85% of GDP. In 2007, the

country’s oil exports stood at 1,407 million barrels per day and, in late 2006, the country

became a member of the Organisation of the Petroleum Exporting Countries and was

assigned, in 2007, a production quota of 1,9 million barrels per day.

A post-war reconstruction boom and the resettlement of displaced persons have led to

high rates of growth in the construction industry and in agriculture. The agriculture sector

accounts for 9,2% of GDP. Despite subsistence agriculture providing the main livelihood

for half of the population, 50% of the country’s food produce is imported. The services

sector, essentially financial services, accounts for 24,6% of GDP.

Despite recording impressive growth figures in recent years, much of the country’s

infrastructure is still damaged or underdeveloped from the 27-year-long civil war. In 2005,

the government started using a US$2 billion line of credit, which has since increased

to US$7 billion, from China to rebuild Angola’s public infrastructure. Several large-scale

projects were completed in 2006.

In 2003, the central bank implemented an exchange rate stabilisation program using

foreign exchange reserves to buy Kwanzas out of circulation. This policy became more

sustainable in 2005 because of strong oil export earnings, and has considerably reduced

inflation. Indeed, consumer inflation declined sharply from 325% in 2000 to about 18% in

2005 and 12,5% in 2008. However, the stabilisation policy continues to place pressure on

Angola’s international net liquidity.

Angola’s total gold and foreign exchange reserves amounted to US$18,36 billion as of the

end of December 2008, growing by nearly 34.4% since December 2007. The country’s

54
external debt totalled US$14,09 billion as of the end of December 2009, an increase of

about 68,6% since December 2007. Towards the end of 2006 and during the first quarter

of 2007, Angola reduced its outstanding contractual obligations (US$2,3 billion in interest

and principal) to the members of the Paris Club and began to meet its current debt service

payments on time. Towards the end of 2007, the government reached an agreement with

the Paris Club on terms and conditions for payment of US$1,8 billion in accumulated

interest on late payments. Repayment was to be made in three instalments beginning

in January 2008 and ending in January 2010. This agreement paved the way for normal

financial relations with the Paris Club creditors, including the opening of new export credit

lines. Spain was the first country to conclude a new agreement, opening a US$600 million

credit line, and Germany has recently begun negotiations in this regard.

Trade
Exports and Imports 2007 2008

Total exports US$44,4 billion US$66,3 billion (2008 est.)

Export growth rate - 10,2%

Total imports US$13,66 billion US$17,08 billion (2008 est.)

Import growth rate - 18,4%

International Trade
Angola’s primary export commodities are crude oil, diamonds, refined petroleum products,
coffee, sisal, fish and fish products. The country’s main export partners are China (33%),
the USA (28,7%), France (6%), South Africa (4,6%) and Canada (4,1%). The country’s
primary imports include machinery and electrical equipment, vehicles and spare parts,
medicines, food, textiles and military goods. Angola’s main import partners are Portugal
(17,6%), China (15,7%), the USA (11,3%), Brazil (7,6%), South Korea (6,8%) and South
Africa (4,8%).

55
Trade with South Africa

(Rands ‘000) 2007 2008 2009

Total exports 3 535 751 4 739 163 5 501 653

Total imports 1 891 093 2 486 137 11 584 443

Trade balance 1 644 658 2 253 026 -6 082 790

Bilateral Agreements with South Africa

• Reciprocal Protection and Promotion of Investments Agreement (2005) [signed but
not yet ratified]; and
• Memorandum of Understanding on Economic Co-operation (2009).

Barriers to Trade
Angola employs a range of trade barriers, and diverse market access constraints exist

for exporters wanting to access the Angolan market. From a South African perspective,

several tariff peaks exist for products of strategic importance, particularly within the

beverages nomenclature, which is the leading category of exports to Angola. Automatic

licensing measures, technical measures and price-control measures are all used or

available to be used by Angolan authorities to control imports. Although improvements

have been made to Angola’s customs service, customs administration remains a barrier

to market access.

Furthermore, Angola also makes use of import prohibitions, and several products require

an import licence issued by the Ministry of Trade. Prohibitions apply on a large number

of agricultural products. Restrictions on imports of Angolan products into South Africa are

primarily in the form of non-tariff measures. In particular, technical barriers as well as sanitary

and phytosanitary measures serve as the greatest restriction facing Angolan exporters.

The importation of certain goods also requires ministerial authorisation. These include:

56
pharmaceutical substances and saccharine and derived products (Ministry of Health);

radios, transmitters, receivers, and other devices (Ministry of Telecommunications);

weapons, ammunition, fireworks, and explosives (Ministry of Interior); plants, roots,

bulbs, microbial cultures, buds, fruits, seeds, and crates and other packages containing

these products (Ministry of Agriculture); fiscal or postal stamps (Ministry of Post and

Telecommunications); poisonous and toxic substances and drugs (Ministries of Agriculture,

Industry, and Health); and samples or other goods imported to be given away (Customs).

Angola has delayed implementation of the SADC Trade Protocol – which seeks to facilitate

trade through tariff harmonisation and tariff reductions and through the establishment of

regional trade policies – until 2010. This has been done with a view to reviving domestic

production of non-petroleum goods.

Business Climate
Infrastructure and Trade

Number of power outages in a typical month 7,81 (2006)

Average time to clear direct exports through customs (days) 16,49 days (2006)

Average time to clear imports through customs (days) 28,25 days (2006)

Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 169 Getting credit 87

Starting a business 165 Protecting investors 57

Dealing with construction

123 Paying taxes 139
permits

Employing workers 178 Trading across borders 171

Registering property 173 Enforcing contracts 181

Closing a business 144

57
Business Travel, Culture, Risk and Investment
Angola is well served in terms of airports with three international airports and several
domestic airports. South African Airways, Air Namibia and Air Zimbabwe fly to Angola
from South Africa. All flights depart from OR Tambo – Johannesburg’s international airport
– and South African Airways flies directly to Angola. In contrast, Air Namibia and Air
Zimbabwe offer connecting flights through Harare and Windhoek. South Africans require
a visa to travel to Angola. Travel throughout the country has been hindered by conflict
and, in many cases, is almost impossible. It is recommended that visitors make enquiries
at their nearest embassy before travelling to the country. Angola is rated ‘medium’ for both
political and security risk.

In terms of the Angolan business culture, business dress is usually casual; ties are
not necessary for men. Business trips should be avoided from June to September as
Angolans tend to take their holidays at this time. Knowledge of Portuguese, the official
language, is an advantage as there are limited translation services and, outside the oil
industry, few people speak English fluently. French and Spanish are also used.

Generally, Angola offers both high returns and great risks to investors and exporters. The
business environment is one of the most difficult in the world. Investors must factor in
pervasive corruption, an underdeveloped financial system and high on-the-ground costs.

Regulatory Policy Framework for Businesses

The Angolan National Private Investment Agency helps facilitate new investment under
the 2003 Basic Law for Private Investment (Law 11/03). Law 11/03 lays out the general
parameters, benefits, and obligations for foreign investors in Angola, and provides for
equal treatment, offers fiscal and custom incentives, simplifies the investment application
process and sets capital requirements. Furthermore, Law 11/03 guarantees the
repatriation of profits for officially-approved foreign investment, and investors can remit
funds through local commercial banks. Under Central Bank Order 4/2003, the Central
Bank must authorise the repatriation of profits and dividends exceeding US$100 000.

58
However, investments in the energy, diamond, telecommunication and financial sectors
continue to be governed by legislation specific to each sector. Decrees and regulations
issued by other government ministries may take precedence over the 2003 Law. The
2003 investment law was part of an overall effort by the government to create a more
investor-friendly environment. Other legislative measures include the Company Law and
the Voluntary Arbitration Law. The Company Law consolidates the rules that apply to
the incorporation of commercial companies in Angola, and the Voluntary Arbitration Law
provides a legal framework for non-judicial resolution of disputes.

Angolan law provides for basic protection of intellectual property rights, and the country
is party to the World Intellectual Property Organisation (WIPO) Convention, the Paris
Convention for the Protection of Industrial Property, and the WIPO Patent Co-operation
Treaty. However, intellectual property rights protection remains relatively weak due to
capacity shortages related to enforcement. This is particularly relevant outside of the
petroleum sector, where the country’s regulatory and legal framework remains relatively
underdeveloped in terms of facilitating large-scale foreign investment or providing
sufficient protection to foreign investors and businesses.

In the petroleum sector, the Angolan government has embarked on a gradual process
of implementing local content legislation (originally promulgated in November 2003)
that requires many existing foreign oil companies operating in the sector to form joint
ventures with domestic companies when embarking on new ventures. Similarly, foreign
companies providing goods or services that do not require heavy capital investment or
non-specialised expertise are only permitted to participate in the economy as contractors
to Angolan companies. Furthermore, foreign companies engaged in activities requiring a
medium level of capital investment and a higher level of expertise may only participate in
association with their Angolan counterparts.

59
Opportunities for South African Businesses
With Angola increasingly opening its domestic markets and encouraging more competition,

the country offers great trade and investment opportunities for South African companies

– with foreign investors increasingly sought and welcomed. One area of great opportunity

is the commercial-scale farming sector. Foreign farmers are now investing in commercial-

scale farming operations on the Angolan planalto (highveld), and South African farmers are

already taking advantage of this. Currently, there is a 17 000 hectare South African-owned

farming operation in Bihé province, and a 6 000 hectare South African-owned arable farm

in Huambo province.

The most prominent opportunities for investment are found in the construction and

infrastructure rehabilitation (roads, bridges, schools, hospitals and dams that were

destroyed during the 27-year-long war), fishing, mining, manufacturing, farming, retailing

and services sectors. Tourism is another sector expanding rapidly. Moreover, significant

opportunities still remain in the petroleum and gas sector as more offshore and onshore

concessions are still to be licenced and exploration is already underway.

A vital area in terms of South African exports is the export of skills and services. South

Africa boasts a developed commercial farming sector, along with marketing and processing

abilities, which place the country in a unique position in Africa in terms of human capital

and expertise. These resources provide a valuable opportunity for South African farmers,

producers, processors and managers to export their skills to the Angolan economy.

60
The country has abundant forest resources, especially in north Kwanza and Cabinda,

with potential for wood production and transformation. The ocean offshore from Angola is

very rich in fishing resources. Furthermore, the mining sector (petroleum, diamonds and

other minerals) has strong growth potential that will certainly stimulate the advent of both

upstream and downstream industries.

Areas for the establishment of industrial and agro-industrial development poles are

identified in Luanda, Benguela, Huíla, Cabinda and Huambo. Opportunities for investment

are also increasing in the construction and infrastructure sectors, and the tourism sector

is expanding rapidly.

61
Republic of
Botswana
Geography and People

Botswana is centrally located in the heart of Southern Africa. It is bordered

Location by Zambia in the north, Namibia in the north and north-west, Zimbabwe
in the north-east and South Africa in the south and south-east.

Area 581 730km2

Capital city Gaborone

Other major
Francistown
cities

Climate Semi-arid; warm winters and hot summers

Natural
Diamonds, copper, nickel, salt, soda ash, potash, coal, iron ore, silver
resources

Key ports Botswana is landlocked

Population 1 990 876 (2009 est.)

Population
1,937% (2009 est.)
growth rate

Life
61,85 years
expectancy

0 – 14 years: 34,8%
Age
15 – 64 years: 61,4%
distribution
65 years and over: 3,9%

English (official, 2,1%), Setswana (78,2%), Kalanga (7,9%), Sekgalagadi

Languages
(2,8%), other (8,6%), unspecified (0,4%)

Tswana (or Setswana) (79%), Kalanga (11%), Basarwa (3%) other

Ethnic groups
(including Kgalagadi and white) (7%)

Christian (71,6%), Badimo (6%), other (1,4%), unspecified (0,4%), none

Religions
(20,6%)

62
Economy
Current account (as % of GDP) -7,6%

Savings rate (% of GDP) 52,32% (2006)

Foreign direct investment flows US$4 million

Size of labour force 685 300 (2007)

Unemployment 7,5% (2007 est.)

Currency Pula (BWP)

2007 2008

Average exchange rate (versus US$) 6,20 6,79

GDP US$12,34 billion US$13,46 billion

GDP growth rate 4,4% 2,9%

GDP per capita (PPP) US$13 800 US$13 900

GNI US$24,01 billion US$24,96 billion

GNI per capita (PPP) US$12 760 US$13 100

Inflation rate (consumer prices) 7,1% (est.) 12,6% (est.)

Growth and Structure of the Economy

Botswana has ranked among the fastest-growing economies in Africa over the past 40

years. Indeed, the country has maintained one of the world’s highest economic growth

rates since independence in 1966, although growth fell below 5% in 2007/08. Through

fiscal discipline, sound macro-economic policies and good governance, Botswana has

transformed itself from one of the poorest countries in the world to a middle-income

country with a per capita GDP of US$13 900 in 2008.

63
The diamond industry is the most important economic sector in Botswana, and the

country is the world’s biggest diamond producer. Diamond mining has fuelled much of the

expansion of the economy and currently accounts for more than one-third of GDP and

between 70% and 80% of export earnings.

The industry sector accounts for 52,6% of the country’s GDP, with the mining sector

contributing 36% of this total. Tourism, financial services and agriculture (characterised

primarily by subsistence farming and cattle farming) are also important sectors. The

agriculture sector contributes 1,6% of GDP and the services sector 45,8%.

Despite impressive economic growth, high rates of unemployment and poverty still remain.

In 2004, official figures recorded an unemployment rate of 23,8%, but unofficial estimates

have placed it closer to 40%. HIV and AIDS infection rates are the second highest in the

world and threaten Botswana’s impressive economic gains. Moreover, expectations of a

levelling-off in diamond mining production overshadow long-term growth prospects. In

recent years, economic growth has slowed considerably due to the erratic performance

of the diamond mining sector. This is exacerbated by the fact that, to date, Botswana has

been unable to achieve significant diversification in exports, despite considerable efforts

made by the government.

Trade

Exports and Imports 2007 2008

Total exports US$5,158 billion US$4,707 billion

Export growth rate - 1,3%

Total imports US$3,447 billion US$4,486 billion

Import growth rate - 6,0%

64
International Trade
Botswana’s primary export commodities are diamonds, copper, nickel, soda ash, meat

(beef exports are an important source of revenue for the country) and textiles. The

country’s main export partners are the United Kingdom (79%), Norway (7%), South Africa

(8%) and Zimbabwe (3%). In turn, the country’s primary imports are foodstuffs, machinery,

electrical goods, transport equipment, textiles, fuel and petroleum products, wood and

paper products, metal and metal products. Botswana’s main import partners are South

Africa (88%), Sweden (3%), the United Kingdom (3%), and France (1%).

Trade with South Africa

(Rands ‘000) 2007 2008 2009

Total exports 0 0 0

Total imports 1 926 032 1 802 623 1 538 602

Trade balance -1 926 032 -1 802 623 -1 538 602

Bilateral Agreements with South Africa

• Convention for the Prevention of Fiscal Evasion with respect to Taxes on Income
(2003); and
• Treaty for the Avoidance of Double Taxation Agreement (2004).

Barriers to Trade
As a result of the launch of the FTA within the SADC region in 2008, no tariff barriers exist

between South Africa and Botswana, or indeed between Botswana and the other SADC

member states. However, Botswana has maintained its policy on tariff protection vis-à-vis

the outside world. South Africa does not include Botswana in its published external trade

statistics as the country is a member of the SACU, and the trade between the countries is

not technically external. The Botswana government has, however, taken steps to protect

65
the country’s basic industries and as a result follows the stipulations of the infant industry

clause of the SACU agreement. In terms of this, Botswana provides tariff protection by

levying import duties on the SACU member countries. The aim of this is to allow domestic

industries to compete effectively within the SACU block.

Business Climate
Infrastructure and Trade

Number of power outages in a typical month 1,74 (2006)

Average time to clear direct exports through customs (days) 1,35 days (2006

Average time to clear imports through customs (days) 3,12 days (2006)

Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 45 Getting credit 43

Starting a business 83 Protecting investors 41

Dealing with construction

122 Paying taxes 18
permits

Employing workers 71 Trading across borders 150

Registering property 44 Enforcing contracts 79

Closing a business 27

Business Travel, Culture, Risk and Investment

Botswana has two international airports at Gaborone and Maun and major domestic

airports at Kasane and Francistown. Air Botswana, Air Namibia and South African Airways

all provide scheduled flights to Gaborone and Maun, and private and charter flights are

available to the smaller airports. Travelling by road from Gaborone to Johannesburg takes

about four hours. Visas are not required by South African passport holders. Visitors may

only stay in the country for a maximum period of 90 days.

66
Business hours in Botswana are typically from 08h00 to 17h00 between April and October

and from 07h30 to 16h30 between October and April. Botswana has a stable and efficient

business environment with very low corporate default probability loans. Furthermore, the

country is ranked by two prominent investment services as offering the lowest credit risk

of all countries in Africa. Botswana also boasts the highest sovereign debt ratings of all

African countries and the best Transparency International anticorruption ranking in Africa.

Despite recording impressive economic growth figures for many years, the HIV and AIDS

pandemic has undermined Botswana’s long-term economic and investment outlook with

the country’s AIDS prevalence rate among the highest in the world (35% of the adult

population is affected).

Regulatory Policy Framework for Businesses

Botswana offers a secure environment for foreign capital with liberal and flexible

foreign capital investment policies. In addition, the country’s constitution prohibits the

nationalisation of private companies. This means that the risk of expropriation is extremely

low, thereby providing another form of security for foreign investors. Moreover, the country

is a signatory to the World Bank’s Multilateral Investment Guarantee Agency (MIGA). It

also signed a bilateral investment treaty in 1997 with the Overseas Private Investment

Corporation (OPIC).

The government actively seeks to improve the level of FDI in the country. To this end, it

provides foreign investors with equal access to general incentive schemes. This occurs in

most sectors, although the investment of foreign capital in job-creating industrial sectors

is specifically encouraged.

Capital can be moved without restriction in Botswana. There are no foreign exchange

controls and profit, dividends and capital can be readily repatriated. Investors also have

67
access to Botswana’s expanding Double Taxation Treaty network – at present comprising

South Africa, the United Kingdom, Mauritius, Sweden, France, Zimbabwe, Namibia, India,

Russia, Barbados and the Seychelles.

Regulation of the country’s financial sector has been strengthened with the introduction

of the Non-Bank Institutions Financial Regulatory Authority which is responsible for

regulating non-bank financial institutions such as micro-lenders and asset managers.

Opportunities for South African Businesses

Botswana’s economy remains heavily dependent on the mining sector, particularly the

diamond industry, which contributes about a third of the country’s GDP. With this in mind,

the government is actively seeking to diversify the economy away from the mineral sector,

with a specific focus on industrial policies geared towards export-oriented manufacturing.

Potential investment opportunities are based on the availability of raw materials locally, or

on imported raw materials for processing.

The most prominent investment opportunities are available in, but not limited to, five

different industries: textiles, garments and accessories, and leather products; glass

products; information technology, with specific opportunities in the call centre, software

development, data capture and processing systems sub-sectors; the jewellery industry;

and tourism, where the focus is on ecotourism, and cultural and educational development

in the untouched and unspoiled areas of the country.

68
69
Republic of
Lesotho
Geography and People

Location Southern Africa, an enclave of South Africa

Area 30 355km2

Capital city Maseru

Other major
Teyateyaneng, Mafateng
cities

Climate Temperate; cool to cold, dry winters; hot, wet summers

Natural
Water, agricultural and grazing land, diamonds, sand, clay, building stone
resources

Key ports Lesotho is landlocked

Population 2 130 819 (2009 est.)

Population
0,116% (2009 est.)
growth rate

Life
40,38 years
expectancy

0 – 14 years: 34,8%
Age
15 – 64 years: 60,2%
distribution
65 years and over: 5%

Languages Sesotho (Southern Sotho), English (official), Zulu, Xhosa

Ethnic groups Sotho (99,7%), Europeans, Asians and other (0,3%)

Religions Christian (80%), indigenous beliefs (20%)

70
Economy
Current account (as % of GDP) -15,1%

Savings rate (% of GDP) 27,31% (2006)

Foreign direct investment flows US$199 million

Size of labour force 854 600

Unemployment 45% (2002)

Currency Loti (LSL)

2007 2008

Average exchange rate (versus US$) 7,25 7,75

GDP US$1,67 billion US$1,62 billion

GDP growth rate 5,1% 3,5%

GDP per capita (PPP) US$1 500 US$1 600

GNI US$3,77 billion US$ 4,03 billion

GNI per capita (PPP) US$ 1 880 US$2 000

Inflation rate (consumer prices) 8% 10,7%

Growth and Structure of the Economy

As a small, landlocked and mountainous country, much of Lesotho’s economy is based

on subsistence agriculture, especially livestock farming. However, droughts have served

to decrease agricultural activity in the country. Despite the importance of subsistence

agriculture, the share of agriculture in GDP has declined steadily and the agricultural

sector now contributes approximately 15,1% of GDP, with significantly larger contributions

to national GDP from the industry (46,4%) and services (38,5%) sectors.

71
Much of the population remains heavily reliant on remittances from miners employed in

South Africa as a primary source of income; and the government of Lesotho derives a

significant proportion of its revenue from the SACU common revenue pool. However, as

the number of mineworkers has declined steadily since the 1990s, a small manufacturing

base has developed in Lesotho based on farm products that support the milling, canning,

leather and jute industries. There is also a rapidly expanding apparel-assembly sector.

The latter has grown significantly, mainly due to Lesotho qualifying for the trade benefits

contained in the Africa Growth and Opportunity Act (AGOA). The manufacturing sector,

which is dominated by the production of clothing and textiles for export markets, accounted

for 18% of national GDP in 2008. Given the export-oriented nature of the sector, it is

particularly vulnerable to global demand and price fluctuations, particularly in the USA

market, where the majority of the country’s clothing and textile exports are destined.

The opening of new diamond mines in 2004 and 2005 has made a significant contribution

to economic growth in Lesotho. Activity in the diamond mining sub-sector has also

contributed significantly to increased capital formation.

Trade

Exports and Imports 2007 2008

Total exports US$805 million (2007 est.) US$956 million (2008 est.)

Export growth rate - -

Total imports US$1,604 billion (2007 est.) US$1,88 billion (2008 est.)

Import growth rate - 6,0%

72
International Trade
Lesotho’s primary export commodities are manufactured clothing, footwear and road

vehicles (75%), wool and mohair, food and live animals. The country’s primary export

partners are the USA (58,9%), Belgium (37%), South Africa and Madagascar (1,2%).

The country’s primary imports are food, building materials, vehicles, machinery, medicines

and petroleum products. Lesotho’s main import partners are China (35,5%), Hong Kong

(22,1%), South Korea (19,1%), Germany (5,9%) and Pakistan (4,6%).

Trade with South Africa

(Rands ‘000) 2007 2008 2009

Total exports 0 0 0

Total imports 1 704 83 15

Trade balance -1 704 -83 -15

Bilateral Agreements with South Africa

• Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion
with respect to Taxes on Income (1997); and
• Agreement on the Establishment of a Joint Commission of Co-operation (2001).

Barriers to Trade
Lesotho is a member of both the SACU and SADC. Although tariff barriers and quantitative

restrictions have largely been eliminated between the SACU members, intra-SACU trade

is constrained by various non-tariff barriers including seasonal import bans, levies and

surcharges, customs administration procedures and border transport charges. SADC

implemented an FTA in 2008, which involves the elimination of tariffs and non-tariff

barriers among member countries.

73
Business Climate
Infrastructure and Trade

Number of power outages in a typical month 7,17 (2009)

Average time to clear direct exports through customs (days) 5,43 days (2009)

Average time to clear imports through customs (days) 4,43 days (2009)

Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 130 Getting credit 113

Starting a business 131 Protecting investors 147

Dealing with construction
155 Paying taxes 63
permits
Employing workers 67 Trading across borders 143

Registering property 142 Enforcing contracts 105

Closing a business 72

Business Travel, Culture, Risk and Investment

Several direct flights from South Africa to Lesotho are operated by South African Airways
from Johannesburg’s OR Tambo International Airport to Lesotho’s capital city, Maseru, on
a daily basis. South African passport holders do not require a visa to travel to Lesotho.

The dominant business languages in Lesotho are English and Sesotho. Usual business

formalities should be observed, but expect a casual atmosphere and pace.

Regulatory Policy Framework for Businesses

Lesotho is largely open to FDI and treats foreign investors well. However, FDI policy
and the legal framework for foreign investment remain underdeveloped. In particular,
regulations relating to business taxation, land regulation, work and residence permits,
industrial and trade licensing, competition policy and aspects of foreign exchange control
require further development.

74
Foreign investment in business and consumer services related to small-scale retail and

personal services is restricted, with foreign ownership or board directorship not permitted

at any level in these businesses. In contrast, most trading businesses and all substantial

manufacturing activities are open to FDI provided that the relevant trading or industry

licences have been acquired and are renewed on an annual basis.

Foreign businesses and local Basotho investors generally receive equal treatment with

respect to ‘normal business’. One exception is the prohibition of ownership of land lease

titles by foreign investors. Despite treating and protection foreign investors in line with

good practice, the legal framework guaranteeing these protections in Lesotho remains

underdeveloped. In particular, the country does not have a foreign investment law.

However, foreign investors do have full and equal recourse to Lesotho’s courts in the

case of commercial and labour disputes.

Nationalisation or expropriation of private property by the state is only permitted by the

Constitution for specific public purposes. In such instances, the law provides for full and

prompt compensation.

Opportunities for South African Businesses

Lesotho’s manufacturing base is grounded in the clothing and textile and footwear sectors.

However, investment opportunities are also available in the emerging power generation,

transport and light-manufacturing industries.

The Lesotho National Development Corporation, charged with the implementation of

the country’s industrial development policy, highlights opportunities for investment in the

country’s knitted fabric mill; leather and footwear industry; the assembly of consumer

electrical and electronic appliances; food processing; water bottling; plastic products;

resources-based projects; environmental projects; and infrastructure development.

75
Republic of
Madagascar
Geography and People

Location Southern Africa, island in the Indian Ocean, east of Mozambique

Area 587 041km2

Capital city Antananarivo

Other major
Antsirabé, Fianarantsoa, Mahajanga, Toamasina
cities

Climate Tropical along coast, temperate inland, arid in south

Natural Graphite, chromite, coal, bauxite, salt, quartz, tar sands, semi-precious
resources stones, mica, fish, hydropower

Key ports Ports of Antsiranana, Mahajanga, Toamasina and Toliara

Population 20 653 556 (2009 est.)

Population
3% (2009 est.)
growth rate

Life
62,89 years
expectancy

0 – 14 years: 43,5%
Age
15 – 64 years: 53,5%
distribution
65 years and over: 3%

Languages English (official), French (official), Malagasy (official)

Malayo-Indonesian (Merina and related Betsileo), Cotiers (mixed African,

Ethnic groups Malayo-Indonesian, and Arab ancestry – Betsimisaraka, Tsimihety,
Antaisaka, Sakalava), French, Indian, Créole, Comoran

Religions Indigenous beliefs (52%), Christian (41%) and Muslim (7%)

76
Economy
Current account (as % of GDP) -18,7%

Savings rate (% of GDP) 16,03% (2006)

Foreign direct investment flows US$1,5 billion

Size of labour force 9,504 million (2007 est.)

Unemployment 45% (2002)

Currency Ariary (MGA)

2007 2008

Average exchange rate (versus US$) 1 880 1 654,78

GDP US$7,34 billion US$9,46 billion

GDP growth rate 6,2% 7,1%

GDP per capita (PPP) US$1 000 US$,1 000

GNI US$18,21 billion US$19,88 billion

GNI per capita (PPP) US$980 US$1 040

Inflation rate (consumer prices) 10,3% (est.) 9,2% (est.)

Growth and Structure of the Economy

Agriculture, including fishing and forestry, is the mainstay of the economy, accounting for

more than one-fourth of GDP and employing 80% of the population. In turn, the industry

and services sectors contribute 15,2% and 58,5% to national GDP, respectively. Exports

of apparel have boomed in recent years primarily as a result of Madagascar’s qualification

for duty and quota-free access to the USA market under AGOA.

77
Production in the country’s secondary sector has, however, slowed in recent years,

mostly as a result of the weak performance of the country’s export processing zones

(EPZs) and difficulties faced by the clothing and textile sector as a result of the ending

of the Multi-Fibre Agreement (MFA). In contrast, recent growth in the tertiary sector has

been spearheaded by construction and public works.

Since the mid-1990s, Madagascar has followed a World Bank- and IMF-led policy of

privatisation and liberalisation, and discarded a number of previous socialist policies.

This strategy has placed the country on a slow and steady growth path, albeit from an

extremely low level. Most recently, the country boasted strong economic growth of more

than 7% in 2008. Growth in the economy is driven primarily by private investment in the

mining sector through large extractive projects for nickel and cobalt in the eastern and

southern parts of the country, as well as an expansion of agricultural production.

Trade

Exports and Imports 2007 2008

Total exports US$1,095 billion (2007 est.) US$1,254 billion (2008 est.)

Export growth rate - -

Total imports US$1,944 billion (2007 est.) US$2,419 billion (2008 est.)

Import growth rate - 47,1%

International Trade
Madagascar’s primary export commodities are coffee, vanilla, shellfish, sugar, cotton

cloth, chromite and petroleum products. The country’s main export partners are France

(38,9%), the USA (20,3%) and Germany (5%). Madagascar’s primary imports include

capital goods, petroleum, consumer goods and food. The country’s key import partners

are China (20,1%), Bahrain (8,7%), France (6,3%), South Africa (5,7%), the USA (4,9%)

and India (4,4%).

78
Trade with South Africa

(Rands ‘000) 2006 2007 2008 2009

Total exports 538 875 515 652 1 161 202 1 886 329

Total imports 11 168 13 317 42 326 124 769

Trade balance 527 707 502 335 1 118 876 1 761 560

Bilateral Agreements with South Africa

• Reciprocal Protection and Promotion of Investment Agreement (2006) [signed but not
yet ratified]; and
• Memorandum of Understanding on Economic Co-operation (2006) [signed but not yet
tabled in parliament].

Barriers to Trade
In 2008, Madagascar’s weighted average tariff rate stood at 8,4%. Madagascar maintains

a limited number of import restrictions. Restrictions currently in force are retained for

reasons of health, security or morals, and include specific products such as arms,

explosives and radioactive products. Import restrictions are also applied to products

considered by the government to be strategic (e.g. vanillin and precious stones). The

import of all these products is either prohibited or requires prior authorisation from the

relevant ministry. Prior authorisation is also required for imports of telecommunication

items and equipment in order to ensure compatibility with established standards.

In addition to these import bans and restrictions, import taxes, sanitary and phytosanitary

regulations, inadequate infrastructure to support trade and a customs process that is

susceptible to corruption, all add to trade costs in the country.

79
Business Climate
Infrastructure and Trade

Number of power outages in a typical month 13,69 (2009)

Average time to clear direct exports through customs (days) 14,17 days (2009)

Average time to clear imports through customs (days) 19,28 days (2009)

Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 134 Getting credit 167

Starting a business 12 Protecting investors 57

Dealing with construction
108 Paying taxes 74
permits
Employing workers 152 Trading across borders 111

Registering property 152 Enforcing contracts 155

Closing a business 183

Business Travel, Culture, Risk and Investment

There are currently two airlines, Air Madagascar and South African Airways Airlink,

operating flights to Madagascar from South Africa. Both of these airlines offer at least five

scheduled direct flights, primarily mainly between Johannesburg and Antananarivo. South

African Airways Airlink also provides a weekly flight to the mining town of Fort Dauphin.

Lightweight suits are recommended for business. The use of interpreters for business

meetings can be arranged through the embassy by prior arrangement.

Investment risk in Madagascar is relatively high given the uncertain political and economic

outlook in the country, together with an underdeveloped business environment. In addition,

the country’s corporate default probability is high.

80
Regulatory Policy Framework for Businesses
Madagascar’s new commercial law allows foreigners to set up businesses in Madagascar.

The law also contains provision for the establishment of single person-limited companies

where there is no need for articles of association. The process of establishing a new

business in Madagascar is comparatively quick. However, despite efforts to streamline

the regulatory process, red tape and lack of transparency still impede business activity. In

addition, Madagascar lacks modern and efficient bankruptcy procedures.

Madagascar has high tax rates. Both the top income tax rate and the top corporate tax

rate are 30%. Other taxes include a value-added tax (VAT) and a capital gains tax. Fiscal

reforms in the 2008 budget have resulted in a simpler tax code, a wider tax base, and

improved fiscal administration.

In terms of the country’s Law on Foreign Investments, investors are required to submit

an investment plan to the Economic Development Board of Madagascar (EDBM). The

size of the land an investor can buy in Madagascar has been limited – for example, in the

real estate sector, investors may purchase land totalling no more than 15 000m2 – but the

specifics of the limitation are largely dependent on the nature of investment activities as

well as the perceived importance of the investment and the investor’s negotiations with the

EDBM. These restrictions aside, no other official restrictions exist on foreign investment, or

on foreign participation or control of domestic enterprises. Foreign investment is also not

subject to any mandatory screening. Both residents and non-residents may open foreign

exchange accounts, subject to certain restrictions and government approval. Similarly,

there are no restrictions on payments or transfers. Nevertheless, most international

capital movements require government authorisation.

However, foreign and domestic investors alike face a heavy bureaucratic burden, despite

efforts by the government to improve the investment climate. Indeed, hindrances to

81
investment include poor infrastructure, weak governance, a slow commercial legal system
and limited financing mechanisms.

The country’s export promotion law, adopted in December 2008, provides exporters with

a number of benefits including a lower customs tax rate on imported capital goods and

raw materials, which now stands at 5% (having previous ranged between 10% and 20%).

Exporters also exempted from export tax and are free to open bank accounts abroad.

Opportunities for South African Businesses

The government of Madagascar has highlighted three key sectors in which further

investment is required in order to boost economic growth in the country. In the mining

sector, the country is endowed with an abundance of natural resources such as nickel,

cobalt, titanium and gold. Mining activities have the capacity to increase the GDP of the

country to 30% by 2012. Consequently, the government is actively engaged in establishing

investor-friendly laws designed to attract foreign investment into the sector.

Madagascar has significant untapped tourism potential. The country is widely known as

the Great Red Island and is the fourth-largest island in the world. The exceptional fauna

and flora of the island, along with its favourable climate, contribute to a flourishing tourism

industry. Increasingly opportunities for investment are evident in the areas of eco-tourism,

sporting and adventure tourism, hotel development, marinas, residential property and

office buildings, and shopping centres.

82
Opportunities in organic farming and food processing are abundant in Madagascar

and are boosted by strong international demand for organic products. Opportunities

for investment are also available in the country’s fishing industry – particularly in inland

fishing, sea fishing (industrial, artisan and traditional) and aquaculture – owing to the fact

that Madagascar is home to a wide range of microclimates which result in a diverse range

of products, including octopus, and squid.

Other areas with growth potential in Madagascar are clothing and textile manufacturing,

arts and crafts and infrastructure development.

83
Republic of
Malawi
Geography and People

South-eastern Africa; between Zambia, Tanzania and Mozambique,

Location
protruding southwards into Mozambique along the valley of the Shire River

Area 118 484km2

Capital city Lilongwe

Other major
Blantyre, Karonga, Lilongwe, Mzuzu, Zomba
cities

Sub-tropical; rainy season (November to May); dry season (May to

Climate
November)

Natural Limestone, arable land, hydropower, unexploited deposits of uranium,

resources coal and bauxite

Key ports Malawi is landlocked

Population 15 028 757 (2009 est.)

Population
2,388% (2009 est.)
growth rate
Life
62,89 years
expectancy

0 – 14 years: 45,8%
Age
15 – 64 years: 51,5%
distribution
65 years and over: 2,7%

Chichewa (57,2%, official), Chinyanja (12,8%), Chiyao (10,1%),

Languages Chitumbuka (9,5%), Chisena (2,7%), Chilomwe (2,4%), Chitonga (1,7%),
other (3,6%)

Chewa, Nyanja, Tumbuka, Yao, Lomwe, Sena, Tonga, Ngoni, Ngonde,

Ethnic groups
Asian, European

Religions Christian (79,9%), Muslim (12,8%), other (3%), none (4,3%)

84
Economy
Current account (as % of GDP) -4,1%

Savings rate (% of GDP) 15,50% (2006)

Foreign direct investment flows US$37 million

Size of labour force 5,747 million (2007 est.)

Unemployment -

Currency Malawian Kwacha (MWK)

2007 2008

Average exchange rate (versus US$) 141,12 142,41

GDP US$3,59 billion US$4,27 billion

GDP growth rate 8,6% 9,7%

GDP per capita (PPP) US$800 US$800

GNI US$10,59 billion US$11,88 billion

GNI per capita (PPP) US$760 US$830

Inflation rate (consumer prices) 7,9% (est.) 8,7% (est.)

Growth and Structure of the Economy

Malawi ranks among the world’s most densely populated and least-developed countries.

The economy is predominantly agricultural with approximately 85% of the population living

in rural areas. Agriculture accounts for about 39,2% of GDP and 90% of export earnings.

The services sector contributes 44% of GDP and the industrial sector a further 16,8% of

GDP. The country has a small financial sector that is relatively stable in comparison to

others in the region. Similarly, Malawi’s formal manufacturing sector is small, accounting

for 8% of GDP.

85
Malawi’s macro-economic performance has been good in recent years, with GDP growth

averaging 8% since 2005. This growth has been underpinned by the strong performance

of the country’s agricultural sector, particularly with respect to maize production. The

performance of the tobacco sector is key to short-term economic growth in Malawi as

tobacco accounts for more than half of the country’s exports. Despite its impressive recent

growth performance, the economy remains heavily dependent on substantial inflows of

economic assistance from the IMF, the World Bank and individual donor nations.

Trade

Exports and Imports 2007 2008

Total exports US$721 million (2007 est.) US$830 million (2008 est.)

Export growth rate - -

Total imports US$1,323 billion (2007 est.) US$1,587 billion (2008 est.)

Import growth rate - 16,3%

International Trade
Malawi’s primary export commodities are tobacco (53%), tea, sugar, cotton, coffee,

peanuts, wood products and apparel. The country’s main export partners are South Africa

(14,2%), Egypt (9,8%), Zimbabwe (8,6%), the USA (7,4%), the Netherlands (7%), Russia

(5,7%) and Germany (5,7%). Malawi’s primary imports are food, petroleum products,

semi-manufactures, consumer goods and transportation equipment and its main import

partners are South Africa (41,5%), China (7,3%), India (6,1%), Tanzania (5,4%) and the

USA (4,1%).

86
Trade with South Africa

(Rands ‘000) 2006 2007 2008

Total exports 1 637 853 1 686 547 2 169 542

Total imports 455 837 531 080 647 182

Trade balance 1 182 016 1 155 467 1 522 360

Bilateral Agreements with South Africa

• Treaty for the Avoidance of Double Taxation (1971); and
• Bilateral Trade Agreement (1990).

Barriers to Trade
Malawi’s weighted-average tariff rate was 8,2% in 2008. Import restrictions, some

services market access restrictions, import and export licensing requirements, import

taxes, inadequate infrastructure, as well as inefficient and corrupt customs administration

all add to trade costs.

Malawi is a member of both SADC and COMESA. In terms of its SADC membership,

SADC implemented an FTA in 2008, which involves the elimination of tariffs and non-tariff

barriers among member countries.

Business Climate
Infrastructure and Trade

Number of power outages in a typical month 1,02 (2009)

Average time to clear direct exports through customs (days) 4,90 days (2009)

Average time to clear imports through customs (days) 7,60 days (2009)

87
Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 132 Getting credit 87

Starting a business 128 Protecting investors 73

Dealing with construction
163 Paying taxes 24
permits
Employing workers 92 Trading across borders 172

Registering property 101 Enforcing contracts 142

Closing a business 130

Business Travel, Culture, Risk and Investment

The principal airlines that fly to Malawi are South African Airways, British Airways, Air

France, KLM and the national carrier, Air Malawi.

South African passport holders do not require visas for stays in Malawi that do not exceed

90 days.

Regulatory Policy Framework for Businesses

Foreign and domestic private investments are generally welcome in most sectors of the

economy. The government’s overall economic and industrial policy does not discriminate

against foreign investors. Both local and foreign investors are not restricted in terms of

the size of investment, source of funds, ownership and the destination of final products.

In addition, there is no screening of foreign investment. Although foreign and domestic

investors are subject to industrial licensing in certain sectors, it is restricted to a short list

of products. Although regulatory transparency has been improving, procedural delays

and red tape continue to impede the investment process. The legal system is slow, and

contract enforcement can be uncertain.

88
Non-residents may hold foreign exchange accounts, subject to restrictions and

government approval. Because of shortages of foreign exchange, some payments and

transfers face quantitative limits. Most capital transactions by residents require approval.

Land ownership may be subject to some restrictions.

All rights to property, including real and intellectual property, are legally protected; and

Malawi adheres to international intellectual property rights treaties and agreements.

However, court administration is weak, and due process can be very slow.

Both local and foreign investors are protected, by Malawi’s Constitution, from deprivation

of individual property without due compensation. However, the Land Acquisition Act of

1971 does permit the government to employ land acquisition procedures provided that its

acquisition is justified as being in the public interest and fair market value is paid by the

government for the land.

Opportunities for South African Businesses

Malawi boasts a diverse agricultural sector that offers investors opportunities in a variety

of industries including cotton production, macadamia nut processing, tea and coffee

production, soya bean and sesame processing, cut flowers, fruit processing and canning.

Within the manufacturing sector, Malawi offers prospective investors opportunities in

textile accessories, garment manufacturing and phosphate fertiliser manufacturing.

Other sectors in Malawi with investment potential include the financial and tourism sectors,

both of which play in important role in contributing to socio-economic development in the

country.

89
Republic of
Mauritius
Geography and People

Southern Africa, island in the Indian Ocean, east of Madagascar; includes

Location
Agalega Islands, Cargados Carajos Shoals (Saint Brandon), Rodrigues

Area 2 040km2

Capital city Port Louis

Other major
Curepipe, Mahebourg
cities
Tropical, modified by southeast trade winds; warm, dry winter (May to
Climate
November); hot, wet and humid summer (November to May)
Natural
Arable land, fish
resources

Key ports Port Louis

Population 1 284 264 (2009 est.)

Population
0,766% (2009 est.)
growth rate
Life
74 years
expectancy

0 – 14 years: 22,5%
Age
15 – 64 years: 70,4%
distribution
65 years and over: 7,1%

Créole (80,5%), Bhojpuri (12,1%), French (3.4%), English (official; spoken

Languages
by less than 1% of the population), other (3,7%) and unspecified (0,3%)

Indo-Mauritian (68%), Creole (27%),

Ethnic groups
Sino-Mauritian (3%), Franco-Mauritian (2%)

Hindu (48%), Roman Catholic (23,6%), Muslim (16,6%), other Christian

Religions
(8,6%), other (2,5%), unspecified (0,3%), none (0,4%)

90
Economy
Current account (as % of GDP) -9,3%

Savings rate (% of GDP) 18,99% (2006)

Foreign direct investment flows US$383 million

Size of labour force 584 000 (2008 est.)

Unemployment 7,2% (2008 est.)

Currency Mauritian Rupee (MUR)

2007 2008

Average exchange rate (versus US$) 31,798 27,973

GDP US$6,93 billion US$8,74 billion

GDP growth rate 4,2% 6,6%

GDP per capita (PPP) US$11 600 US$12 100

GNI US$14,38 billion US$15,84 billion

GNI per capita (PPP) US$11 410 US$12 480

Inflation rate (consumer prices) 8,8% (est.) 9,7% (est.)

Growth and Structure of the Economy

With a well-developed legal and commercial infrastructure and a long tradition of

entrepreneurship and representative government, Mauritius is growing into one of the

developing world’s most successful economies. It is also one of the strongest economies in

the SSA region and has one of the region’s highest levels of per capita income. Moreover,

Mauritius has demonstrated a strong commitment to human resource development by

allocating significant shares of public expenditure to education and health.

Since independence in 1968, Mauritius has developed from a low-income, agriculturally-

based economy to a middle-income, diversified economy with growing industrial, financial

91
and tourist sectors. For most of the period, annual growth has been in the order of 5% to

6%. This growth has been reflected in more equitable income distribution, increased life

expectancy, lower infant mortality, and a much-improved infrastructure.

The economy rests on sugar, tourism, textiles and apparel, and financial services; and

is expanding into fish processing, information and communications technology, and

hospitality and property development. The agriculture sector contributes 4,6% of GDP,

industry 24,9% of GDP, and the services sector 70,5% of GDP. Sugar cane is grown

on about 90% of the cultivated land area and accounts for 15% of export earnings. The

government’s development strategy centres on creating vertical and horizontal clusters

of development in these sectors. Mauritius has attracted more than 32 000 offshore

entities, many aimed at commerce in India, South Africa and China. Investment in the

banking sector alone has reached over US$ 1 billion. The country also boasts a strong

textile sector, and has been well positioned to take advantage of the growth opportunities

afforded by the AGOA.

Trade
Exports and Imports 2007 2008

Total exports US$2,231 billion (est.) US$2,4 billion (est.)

Export growth rate - -

Total imports US$3,656 billion (est.) US$4,399 billion (est.)

Import growth rate - 3.1%

International Trade
Mauritius has based much of its development on preferential trade access to European
markets. Its primary export commodities are clothing and textiles, sugar, cut flowers,

molasses and fish. Notably, after several years of contraction related to the phasing out

92
of the MFA, the exports of articles of apparel and clothing accessories have increased

during the past three years. The country’s main export partners are the United Kingdom

(30,8%), France (1,1%), the USA (8,6%), Italy (6,5%), Belgium (5,3%), the United Arab

Emirates (UAE) (5,1%) and Madagascar (4,1%).

The country’s primary imports include manufactured goods, capital equipment, foodstuffs,

petroleum products and chemicals. Mauritius’s main import partners are India (21,1%),

France (11,8%), South Africa (9,9%) and China (8,2%).

Trade with South Africa

(Rands ‘000) 2005 2006 2007

Total exports 2 190 087 1 995 517 1 921 827

Total imports 167 885 259 589 437 510

Trade balance 2 022 202 1 735 928 1 484 317

Bilateral Agreements with South Africa

• Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion
with Respect to Taxes on Income (1994);
• Treaty for the Avoidance of Double Taxation (1997);
• Agreement for the Promotion and Reciprocal Protection of Investments (1998) [signed
but not yet ratified]; and
• Memorandum of Understanding on Economic Co-operation (2009) [signed but not yet
tabled in parliament].

Barriers to Trade
Mauritius’s weighted average tariff rate was 1,6% in 2006. The government has made

considerable progress in liberalising the trade regime, but some tariffs remain high, and

together with the existence of quotas, import restrictions, import and export permits, and

93
the weak enforcement of intellectual property rights have added to the cost of trade. The

government also controls imports of what it deems to be strategic products, including rice

and wheat flour.

Business Climate
Infrastructure and Trade

Number of power outages in a typical month 3,57 (2009)

Average time to clear direct exports through customs (days) 10,27 days (2009)

Average time to clear imports through customs (days) 10,27 days (2009)

Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 17 Getting credit 87

Starting a business 10 Protecting investors 12

Dealing with construction

42 Paying taxes 12
permits

Employing workers 36 Trading across borders 19

Registering property 66 Enforcing contracts 66

Closing a business 73

Business Travel, Culture, Risk and Investment

Direct flights are available from Johannesburg, Durban or Cape Town to Mauritius and

are operated by Air Mauritius, British Airways, Kenya Airways and South African Airways.

Mauritian business protocol and tradition demand punctuality when attending meetings.

It is recommended that appointments be arranged several days in advance. Mauritius

businesses deploy ‘flat and top down hierarchical structures’ where the only divide is

between managers and other ranks. It is customary always to shake hands when being

introduced or when meeting someone as well as when leaving.

94
Business cards are welcomed in business culture and are generally exchanged at the end

of business meetings. Misplaced or exaggerated praise is not appreciated in Mauritian

business culture. It is considered to be impolite and rude to maintain eye contact (unless

a point is being emphasised), to stand too close when speaking or to talk loudly. Mauritian

businessmen respect personal space and therefore keeping an acceptable distance is

recommended. It is considered rude to ask direct personal questions about occupation,

income and background. The Mauritian business dress code is generally conservative

and the norm for both men and women is to wear smart, well-tailored attire in darker

colours. Many Mauritian companies have now introduced more dressed-down attire but

this generally relates to the high-tech and core industries.

Regulatory Policy Framework for Businesses

The government of Mauritius’s policy since 2005 has been to open the economy and

streamline administrative procedures for people to work and live in Mauritius. The

Business Facilitation Act of 2006 abolished trade licences and allowed businesses to

start operations within three days of incorporation. Residence permits and work permits

for foreign investors, entrepreneurs and professionals have been combined into what is

called an occupation permit, which is now processed within three working days.

Investment in Mauritius is governed by the Investment Promotion Act of 2000 and the

Business Facilitation Act of 2006. Investment regulations are consistent with the WTO’s

Agreement on Trade Related Investment Measures. The government of Mauritius does

not discriminate between local and foreign investment. Businesses can be conducted

locally in several forms: under a self-employed activity, as a partnership with Mauritian

nationals, or as a 100% foreign-owned company under the Companies Act. For a limited
number of regulated activities in such sectors as tourism, sugar, and broadcasting, an

application for the appropriate permit or licence must be made to the competent authorities

prior to the start of operations.

95
Foreign and domestic investors are treated equally, and foreigners may control 100%

of Mauritian companies in most economic sectors. A transparent and well-defined

foreign investment code makes Mauritius one of the best places in the region for foreign

investment. The domestic legal system is generally non-discriminatory and transparent.

Residents and non-residents may hold foreign exchange accounts. There are no controls

on payments or transfers and few controls on capital transactions. Foreign nationals may

acquire property subject to some restrictions.

Opportunities for South African Businesses

Mauritius is pursuing a development strategy based on liberal and open investment policies

aimed at sustaining growth in the country. On the island, the government is well aware

that having to restructure the economy is essential to maintain global competitiveness. It

is for this reason that niche markets for investors are constantly changing. Currently, the

sectors posing the greatest opportunities for investors include renewable energy, water

conservation and management, telecommunications and the creative arts.

96
97
Republic of
Mozambique
Geography and People

South-eastern Africa, bordering the Mozambique Channel, between

Location
South Africa and Tanzania

Area 799 380km2

Capital city Maputo

Other major
Nampula, Beira
cities

Climate Tropical to subtropical

Natural
Coal, titanium, natural gas, hydropower, tantalum and graphite
resources

Key ports Ports of Maputo, Beira, Nacala, Quelimane and Pemba

Population 21 669 278 (2009 est.)

Population
1,791% (2009 est.)
growth rate
Life
41,18 years
expectancy
0 – 14 years: 44,3%
Age
15 – 64 years: 52,8%
distribution
65 years and over: 2,9%

Emakhuwa (26,1%), Xichangana (11,3%), Portuguese (8,8%) (Official;

spoken by 27% of population as a second language), Elomwe (7,6%),
Languages
Cisena (6,8%), Echuwabo (5,8%), other Mozambican languages (32%),
other foreign languages (0,3%), unspecified (1,3%)

African (99,66%) [Makhuwa, Tsonga, Lomwe, Sena, and others],

Ethnic groups
Europeans (0,06%), Euro-Africans (0,2%), Indians (0,08%)

Catholic (23,8%), Muslim (17,8%), Zionist Christian (17,5%), other

Religions
(17,8%), none (23,1%)

98
Economy
Current account (as % of GDP) -12,1%

Savings rate (% of GDP) 3,14% (2006)

Foreign direct investment flows US$587 million

Size of labour force 9,65 million (2008 est.)

Unemployment 21% (1997 est.)

Currency Meticai (MZM)

2007 2008

Average exchange rate (versus US$) 26,264 26,264

GDP US$8,1 billion US$9,9 billion

GDP growth rate 7% 6,8%

GDP per capita (PPP) US$900 US$900

GNI US$15,55 billion US$16,69 billion

GNI per capita (PPP) US$730 US$770

Inflation rate (consumer prices) 8,2% (est.) 10,3% (est.)

Growth and Structure of the Economy

Mozambique’s agricultural sector contributes about 23,5% of GDP, and subsistence

agriculture employs the vast majority of the country’s workforce. The industrial and service

sectors account for about 30,9% of GDP and 45,6% of GDP, respectively.

At independence in 1975, Mozambique was one of the world’s poorest countries. In

1987, the government embarked on a series of macroeconomic reforms designed to

stabilise the economy. These steps, combined with donor assistance and with political

stability since the multi-party elections in 1994, have led to dramatic improvements in the

country’s economic growth rate. Indeed, Mozambique’s economic growth averaged 8,6%

99
between 2000 and 2007. Inflation was reduced to single digits during the late 1990s and,

although it returned to double digits between 2000 and 2006, in 2007 it had slowed to

8% with GDP growth reaching 7,5%. Fiscal reforms, including the introduction of a VAT

and reform of the customs service, have improved the government’s revenue-collection

abilities. Currently, a significant proportion of Mozambique’s economic growth is driven by

capital-intensive export sectors and foreign investment projects in the mining sector and

aluminium smelters, which have led indirectly to growth in the services and construction

sectors.

In spite of these gains, Mozambique remains dependent on foreign assistance for much

of its annual budget, and the majority of the population remains below the poverty

line. Official Development Assistance (ODA) financed more than half of government

expenditure in 2009: nearly half of ODA takes the form of direct budget support, a sign

of donors’ continued confidence in Mozambique. However, donor support is expected to

decrease in the medium term, increasing the urgency of mobilising additional tax revenue.

Trade
Exports and Imports 2007 2008

Total exports US$2,412 billion (est.) US$2,653 billion (est.)

Export growth rate - -

Total imports US$2,811 billion (est.) US$3,458 billion (est.)

Import growth rate - 10,5%

International Trade
Mozambique’s primary export commodities are aluminium, prawns, cashews, cotton,
sugar, citrus, timber and bulk electricity. The country’s main export partners are the

Netherlands (55,5%), South Africa (9,2%) and Zimbabwe (2,1%). The country’s primary

100
imports are machinery and equipment, vehicles, fuel, chemicals, metal products,

foodstuffs and textiles. Mozambique’s main import partners are South Africa (27,4%), the

Netherlands (15,7%) and China (4,3%).

Mozambique’s foreign trade continues to be dominated by the mega-projects, including

the Mozal aluminium smelter, the Sasol natural gas pipeline and the Cahora Bassa

hydroelectric facility. After an improvement in the trade balance in 2006 – due to high

aluminium prices and strong growth of traditional exports, particularly cashew nuts, sugar,

tobacco and prawns – Mozambique’s trade deficit widened in 2007, reflecting the high oil

import bill and the deterioration in the performance of traditional exports.

Trade with South Africa

(Rands ‘000) 2005 2006 2007

Total exports 6 402 557 6 240 445 9 015 890

Total imports 199 282 318 590 2 388 346

Trade balance 6 203 275 5 921 855 6 627 544

Bilateral Agreements with South Africa

• Agreement on the Promotion and Reciprocal Protection of Investments (1997);
• Agreement Concerning Natural Gas Trade (2001);
• Memorandum of Understanding on Economic Co-operation (2005) [signed but not yet
tabled in parliament]; and
• Treaty for the Avoidance of Double Taxation (2009).

Barriers to Trade
Mozambique is a member of SADC. SADC implemented an FTA in 2008, which involves

the elimination of tariffs and non-tariff barriers among member countries. Despite this,

time-consuming and bureaucratic customs clearance and corruption add to trade costs

in the country.

101
Business Climate
Infrastructure and Trade

Number of power outages in a typical month 3,10 (2007)

Average time to clear direct exports through customs (days) 10,05 days (2007)

Average time to clear imports through customs (days) 10,39 days (2007)

Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 135 Getting credit 127

Starting a business 96 Protecting investors 41

Dealing with construction

159 Paying taxes 98
permits

Employing workers 156 Trading across borders 136

Registering property 151 Enforcing contracts 129

Closing a business 136

Business Travel, Culture, Risk and Investment

Beira and Nampula have international airports that serve South African Airways and Air

Portugal, the principal airlines flying to Mozambique. Mozambique’s national carriers are

Linhas Aereas de Mocambique (LAM) and Empresa Nacional de Transporte e Trabalho

Aereo (TTA). There are three main railway systems running east to west in Mozambique.

The development of the Maputo Corridor between Mozambique and South Africa has

reduced the travelling distance between the two countries.

South African passport holders do not require a visa for a stay of up to 30 days for tourist

visits (a valid passport is required and must be valid no less than six months and have at

least two blank pages). However, South Africans travelling to Mozambique for business

102
reasons or to work in Mozambique do require a visa and should contact the Consulate

General for visa requirements.

Regulatory Policy Framework for Businesses

Mozambique has moderate levels of fiscal, monetary, investment and trade freedom and

a government size that is about on par with the world average. Private-sector involvement

in the economy is substantial, although privatisation of state-owned enterprises has

slowed. Foreign capital and domestic capital are treated similarly in most cases, and

overall trade liberalisation has progressed despite lingering non-tariff barriers.

Most sectors of Mozambique’s economy are open to 100% foreign investment, although

certain sectors – including mining – are subject to specific performance requirements

and foreign investors generally receive the same treatment as domestic investors. Some

restrictions remain in place, especially in relation to the private ownership of land. The

government investment policy does not limit foreign ownership or control of companies. In

addition, Mozambique allows 100% repatriation of profits and retention of earned foreign

exchange in domestic accounts.

Bureaucracy can be burdensome, especially for smaller investors. Additionally, regulations

can be inconsistently applied, and the system is prone to corruption. Moreover, lengthy

registration and approval procedures governed by various laws and regulations, and in

some instances a lack of clear statutes, affect both domestic and foreign investors.

Mozambique allows repatriation of profits and retention of foreign exchange earnings.

Furthermore, both residents and non-residents may hold foreign exchange accounts.
Payments and transfers are subject to maximum amounts, above which they must be

approved by the central bank. All land is owned by the state.

103
Mozambique has relatively high tax rates. The top income tax rate is 32%. The corporate

tax rate is 32%, with the exception of income derived from agricultural or cattle breeding

activities, both of which are subject to a 10% corporate tax. Other taxes include VAT and

a tax on interest.

Opportunities for South African Businesses

Mozambique’s new-found political stability, coupled with the presence of two deep sea

ports that simplify the process of accessing regional and global export markets, has

attracted foreign investors to Mozambique. Currently, investment opportunities exist

in the agriculture and forestry sectors. In terms of agriculture, the greatest investment

potential can be found in the cotton, rice, sugar cane, timber, the activation of charcoal

from coconut shells, cashew nuts, castor (oil extraction), fruits and vegetable industries.

Other industries which will prove to be of interest to investors wanting to do business

in Mozambique are cattle breeding, poultry, fishing (at sea and in the country’s rivers

and lakes, and its Lagoon-Massingir Dam), industry and agro-processing, infrastructure

development, transport and logistics.

104
105
Republic of
Namibia
Geography and People

Southern Africa, bordering the South Atlantic Ocean, between Angola

Location
and South Africa

Area 824 292km2

Capital city Windhoek

Other major
Walvis Bay, Rundu, Swakopmund, Keetmanshoop
cities

Climate Desert; hot, dry; rainfall sparse and erratic

Natural Diamonds, copper, uranium, gold, silver, lead, tin, lithium, cadmium,
resources tungsten, zinc, salt, hydropower and fish

Key ports Ports of Walvis Bay and Lüderitz

Population 2 108 665 (2009 est.)

Population
0,95% (2009 est.)
growth rate
Life
51,24 years
expectancy

0 – 14 years: 35,9%
Age
15 – 64 years: 60,2%
distribution
65 years and over: 3,9%

Languages English (official), Afrikaans, German and indigenous languages

Black (87,5%), White (6%), Mixed (6,5%) Ovambo, Kavango, Herero,

Ethnic groups
Damara, Nama, Caprivian, Bushmen, Baster and Tswana

Christianity (80 to 90% amongst which at least 50% Lutheran) and

Religions
indigenous beliefs (10 to 20%)

106
Economy
Current account (as % of GDP) -1%

Savings rate (% of GDP) 42,21% (2006)

Foreign direct investment flows US$746 million

Size of labour force 686 000 (2008 est.)

Unemployment 5% (2008 est.)

Currency Namibian Dollar (NAD)

2007 2008

Average exchange rate (versus US$) 7,18 7,75 (est.)

GDP US$8,83 billion US$8,84 billion

GDP growth rate 5,5% 2,9%

GDP per capita (PPP) US$6 200 US$6 400

US$8,8
GNI US$8,54 billion
billion
GNI per capita (PPP) US$4 100 US$4 200

Inflation rate (consumer prices) 6,7% 10,3%

Growth and Structure of the Economy

The Namibian economy is heavily oriented towards services and industry, with the

services sector contributing 54% of the country’s GDP, and industry accounting for 37%

of GDP. While the agricultural sector accounts for just 9% of Namibia’s GDP, about half

of the population depends on subsistence agriculture for their livelihood. The country’s

major industries include meat packing, fish processing, dairy products and mining, with

the latter focused on non-fuel minerals including diamonds, lead, zinc, tin, silver, tungsten,

uranium and copper. Namibia is the fourth-largest producer of non-fuel minerals in Africa,

and the world’s fourth-largest producer of uranium. The country’s uranium production is

107
expected to treble to an annual output of 15 000 tonnes from 2011, and at least two of

five planned advanced-stage uranium projects are set to begin production within the next

two to three years.

Although Namibia boasts high per capita GDP and GNI relative to the region, the country

also has one of the world’s worst levels of income inequality. Following GDP growth of

just under 3% in 2008, Namibia’s real GDP contracted by 0.7% in the first three quarters

of 2009, but is expected to recover to grow at 1,7% in 2010. It is expected that this growth

recovery will be spurred by growth in the mining sector with an anticipated recovery in the
diamond market (the country’s main export), together with increased uranium and base

metal production.

Namibia has embarked on a process of privatisation of several enterprises and this is

expected to stimulate FDI in the long run.

Trade
Exports and Imports 2007 2008

Total exports US$2,922 billion US$3,167 billion

Export growth rate - -

Total imports US$3,102 billion US$ 3.849 billion

Import growth rate - 6,7%

International Trade
Namibia’s primary export commodities are diamonds, copper, gold, zinc, lead, uranium,

cattle, processed fish and karakul skins. The country’s main export partners are South

Africa, Switzerland, Morocco, Israel and Spain. In turn, the country’s primary imports

include foodstuffs, petroleum products and fuel, machinery and equipment, and chemicals.

Namibia’s main import partners are South Africa, Germany, the United Kingdom, the USA,

Spain and China.

108
The country’s recent trade performance has been mixed. Namibia’s trade deficit increased

by 50% to reach US$439 million in 2008; while, in contrast, it experienced a reversal of its

current account deficit, which recorded a surplus of US$96 million. Diamond exports – the

country’s main export item – fell by more than 53% in the first half of 2009 in comparison

to the equivalent period in 2008. More encouragingly, however, other exports such as

uranium increased over this period.

Trade with South Africa

(Rands ‘000) 2005 2006 2007

Total exports 0 0 0

Total imports 814 440 910 698 927 795

Trade balance -814 440 -910 698 -927 795

Bilateral Agreements with South Africa

• Bilateral agreement concerning debt (1997);
• Memorandum of understanding on natural gas trade (1997); and
• Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion
with respect to Taxes on Income and Capital Gains (1999).

Barriers to Trade
Namibia is a member of both the SACU and SADC. Although tariff barriers and quantitative

restrictions have largely been eliminated between the SACU members, intra-SACU trade

is constrained by various non-tariff barriers including seasonal import bans, levies and

surcharges, customs administration procedures and border transport charges. SADC

implemented an FTA in 2008, which involves the elimination of tariffs and non-tariff

barriers among member countries.

109
Business Climate
Infrastructure and Trade

Number of power outages in a typical month 1,66 (2006)

Average time to clear direct exports through customs (days) 1,49 days (2006)

Average time to clear imports through customs (days) 3,26 days (2006)

Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 66 Getting credit 15

Starting a business 123 Protecting investors 73

Dealing with construction

38 Paying taxes 97
permits

Employing workers 43 Trading across borders 151

Registering property 134 Enforcing contracts 41

Closing a business 55

Business Travel, Culture, Risk and Investment

Namibia has three international airports: the Hosea Kutako International Airport (located

45 minutes east of Windhoek), Walvis Bay and Keetmanshoop airports. Both direct and

indirect flights are available to Namibia from South Africa and are operated by South

African Airways, British Airways and Air Namibia. South African citizens do not require a

visa for tourism/holiday visits that do not exceed a period of 90 days. Those travelling to

Namibia for business purposes must check with the High Commission of the Republic of

Namibia in Pretoria if they qualify for the visa exemption.

When conducting business in Namibia it is recommended that suits be worn in winter; and

lighter suits or open-necked attire are recommended in summer. English is widely spoken

110
in business circles, as is Afrikaans. The best times for doing business are February to

May and September to November.

Regulatory Policy Framework for Businesses

Namibia welcomes foreign investment and virtually all business activities are open

to foreign investors. Foreign ownership of agricultural land is regulated. Namibia has

introduced the Foreign Investment Act, which affords protection to foreign investment in

Namibia and introduced an investment centre within the Ministry of Trade and Industry

in order to streamline and encourage foreign investment into Namibia. Foreign nationals

are awarded protection by this legislation by, among other things, being guaranteed

repatriation of funds and interest received in Namibia.

Namibia guarantees foreign investors national treatment for most sectors. However,

companies that are 75% or more foreign owned are subject to exchange controls.

The Namibian Constitution provides for the expropriation of property in the public interest

subject to the payment of ‘just’ compensation. It is important for investors to note that

Black Economic Empowerment (BEE) is a key government priority, meaning that it has

become increasingly necessary (although not yet a legal requirement) for new foreign

investors to form partnerships with local BEE firms or trusts. Although, at this stage, the

Namibian government has not approved a draft BEE bill, BEE provisions are in place in

the financial sector and certain parts of the mining sector.

Residents may hold foreign exchange accounts, subject to prior approval and some

restrictions. In contrast, non-residents may hold foreign currency accounts only if they
operate in an export-processing zone. Capital transactions, transfers and payments are

subject to various restrictions, approvals, and quantitative limits. Investments abroad by

residents are capped at N$750 000.

111
Normal tax is levied on the taxable income accruing to companies, trusts and individuals

from sources within or deemed to be within Namibia. The standard corporate tax rate

is applied at a flat tax rate of 35%. Individuals are taxed on a sliding scale, and the

maximum tax rate for individuals is 36%. Insurance companies are effectively taxed at

14% of investment income, mining companies are taxed at 37,5%, and diamond mines

are effectively taxed at 55%.

There is no taxation on local dividends from companies and distributions from close

corporations paid to residents, but dividends accruing to foreign residents are subject

to a non-resident shareholders’ tax of 10%. There is no capital gains tax payable, and

no estate duty is payable. A non-resident shareholder’s tax of 10% is deducted from

dividends received by non-resident shareholders who do not carry on business in

Namibia. Royalties paid to non-residents are subject to a 10,5% withholding tax.

Opportunities for South African Businesses

Namibia offers a wide range of investment opportunities in diverse sectors of its economy.

These opportunities have been enhanced through the provision of highly competitive

incentives for potential investors that include an EPZ regime offering a tax-free and duty-

free environment for export-oriented manufacturing enterprises.

The deep-water harbour of Walvis Bay serves as Namibia’s growth point and link to major

road transport corridors into neighbouring countries, creating a platform for investors to

gain access to the rest of the Southern African region.

112
Other potential areas for investment and business opportunities in Namibia include power

generation and transmission; gas (Kudu gas project) and oil prospecting, exploration and

processing; pharmaceuticals; iron and steel manufacturing; manufacturing, particularly in

the assembly of electronic and electrical components; mineral prospecting, exploration

and processing; hotel and conference facility development; information technology and

personal computer assembly; construction and engineering; cement production; textiles

and garment manufacturing; port and harbour infrastructure and facilities; leather and

leather products; cutting and polishing of semi-precious and precious stones; aquaculture

and mariculture; poultry and piggery; cotton production and ginnery; manufacturing of

plastic products; furniture manufacturing and assembly; and call centres and business

process outsourcing.

113
Republic of
Seychelles
Geography and People

Location Archipelago in the Indian Ocean, north-east of Madagascar

Area 455km2

Capital city Victoria

Other major
Anse Boileau, Anse Royal, Cascade, Takamaka
cities

Tropical marine; humid; cooler season during south-east monsoon (late

Climate May to September); warmer season during north-west monsoon (March
to May)

Natural
Fish, copra, cinnamon trees
resources

Key ports Port of Victoria

Population 87 476 (2009 est.)

Population
0,999% (2009 est.)
growth rate
Life
73,02 years
expectancy
0 – 14 years: 22,8%
Age
15 – 64 years: 70,1%
distribution
65 years and over: 7,1%

Languages Créole (91,8%), English (4,9%) (official), other (3,1%),

Ethnic groups Mixed French, African, Indian, Chinese and Arab

Roman Catholic (82,3%), Anglican (6,4%), Seventh Day Adventist

Religions (1,1%), other Christian (3,4%), Hindu (2,1%), Muslim (1,1%), other non-
Christian (1,5%), none (0,6%)

114
Economy
Current account (as % of GDP) -24,2%

Savings rate (% of GDP) 9,43% (2006)

Foreign direct investment flows US$364 million

Size of labour force 39 560 (2006 est.)

Unemployment 2% (2006 est.)

Currency Seychelles Rupee (SCR)

2007 2008

Average exchange rate (versus US$) 6,5 8 (2008 est.)

GDP US$0,91 billion US$ 0,2 billion

GDP growth rate 7,3% -1,%

GDP per capita (PPP) US$21 400 US$21 000

GNI US$1,63 billion US$1,7 billion

GNI per capita (PPP) US$19 190 US$19 770

Inflation rate (consumer prices) 5,3% (est.) 37% (est.)

Growth and Structure of the Economy

The services sector is the mainstay of the Seychelles’ economy with a GDP share of

close to 80%. A thriving tourism industry accounts for approximately one quarter of this

share, and the economy of the Seychelles archipelago relies heavily on tourism receipts.

The tourism industry employs 30% of the labour force and accounts for more than 70%

of export earnings The economy is also heavily dependent on the fishing industry, with

output from the Indian Ocean tuna cannery and re-exports of petroleum accounting for

the majority of the country’s exports. The manufacturing sector, which is dominated by

the canned tuna industry, is the second-largest sector in the economy and contributes

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nearly 10% of the country’s GDP. The construction industry also plays an important role

in the economy, accounting for 8% of GDP, and is based primarily around hotel and resort

construction associated with the tourism industry.

Even though per capita income is among the highest in the region, the economy’s small

size makes it vulnerable to external shocks. The Government of the Seychelles has

implemented some economic reforms – a mix of reduced controls on the economy and

increased economic liberalisation. In both areas, gradual and limited progress has been

made. More recently the country has been trying to improve its economy by reducing

debt and privatising industries. However, in 2008 the country suffered a severe balance

of payments and debt crisis on the back of unsustainable macro-economic policies and

imbalances which were exacerbated by external shocks. This crisis has had a significant

negative impact on the Seychelles’ short-term economic growth outlook.

Trade
Exports and Imports 2007 2008

Total exports US$391 million (est.) US$495 million (est.)

Export growth rate - 4.2%

Total imports US$804 million (est.) US$1,018 billion (est.)

Import growth rate - -4,1%

International Trade
Seychelles’ primary export commodities are canned tuna, frozen fish, cinnamon bark,

copra and petroleum products (re-exports). The country’s main export partners are the

United Kingdom (21,1%), France (19,1%), Mauritius (10,1%), Japan (7,9%), Italy (7,8%)

and the Netherlands (6%).

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The country’s primary imports are machinery and equipment, foodstuffs, petroleum

products and chemicals and its main import partners are Saudi Arabia (17,5%), Singapore

(12,4%), France (10,3%), Spain (8,1%), Germany (7%), India (5,4%) and South Africa

(4,7%).

Trade with South Africa

(Rands ‘000) 2006 2007 2008 2009

Total exports 597 973 502 363 407 662 472 663
Total imports 17 877 15 217 45 121 3 773
Trade balance 580 096 487 146 362 541 468 890

Bilateral Agreements with South Africa

• Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion
with respect to Taxes on Income (1998);
• Treaty for the Avoidance of Double Taxation (2002); and
• General Co-operation Agreement (2007).

Barriers to Trade
The Seychelles is a member of SADC. SADC implemented an FTA in 2008, which

involves the elimination of tariffs and non-tariff barriers among member countries.

However, burdensome and non-transparent regulations and standards, and inefficient

and inconsistent customs administration still add to trade costs in the country.

Business Climate
Infrastructure and Trade

Number of power outages in a typical month -

Average time to clear direct exports through customs (days) -

Average time to clear imports through customs (days) -

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Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 111 Getting credit 150

Starting a business 81 Protecting investors 57

Dealing with construction

56 Paying taxes 34
permits

Employing workers 130 Trading across borders 93

Registering property 59 Enforcing contracts 70

Closing a business 183

Business Travel, Culture, Risk and Investment

The Seychelles government is keen to create a suitable environment for foreign

investment. The Investment Promotion Act (1994) legislates inward investment incentives

that are granted to approved projects in the domestic and export sectors, including

tourism, agriculture, manufacturing and the service industries. Procedures for approval

of investments have been streamlined and available incentives include the following: the

issue of a certificate of approval; tax changes that cannot be to the detriment of the

investor; exemption from import duties on primary and intermediate inputs and entitlement

to employ a staff complement that is 50% foreign. Notably, however, the employment of

foreign workers is only permitted when no suitably qualified domestic labour is available.

Foreign investors are free to purchase land provided that approval has been granted by

the government.

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Foreign exchange and capital transactions are subject to restrictions and controls. The

procedures associated with obtaining trade licences are cumbersome and, for most types

of businesses, investors are required to renew their licences on an annual basis.

In the Seychelles there is no restriction placed on payment for imports. However,

import permits are required for certain products. There is provision for a limited form

of exchange control under the Exchange Control (Exemption) (Amendment) Order of

1995, which stipulates that it is illegal to deal in foreign currency in instances other than

with an authorised dealer. While the corporate tax rate in the Seychelles is high, with a

top corporate tax rate of 40%, individuals are not subject to income tax. Other taxes in

operation in the country include a goods and services tax and a vehicle tax.

Opportunities for South African Businesses

A business matchmaking initiative is offered by the Seychelles Investment Bureau

whereby business people interested in doing business on the island can register and

operate businesses in the country’s key growth sectors. The most promising industries for

business matchmaking are tourism, fisheries, agriculture, industry, information technology

and trading.

119
Republic of
South Africa
Geography and People

Location Southern Africa, at the southern tip of the continent of Africa

Area 1 219 090km2

Capital city Pretoria

Other major
Cape Town, Johannesburg, Durban, Port Elizabeth, Bloemfontein
cities
Mostly semi-arid; subtropical along east coast; sunny days and cool
Climate
nights
Gold, chromium, antimony, coal, iron ore, manganese, nickel,
Natural
phosphates, tin, uranium, gem diamonds, platinum, copper, vanadium,
resources
salt, natural gas

Ports of Cape Town, Durban, Port Elizabeth, Richards Bay and Saldanha
Key ports
Bay

Population 49 052 489 (2009 est.)

Population
0,281% (2009 est.)
growth rate
Life
48,98 years
expectancy

0 – 14 years: 28,9%
Age
15 – 64 years: 65,8%
distribution
65 years and over: 5,4%

IsiZulu (23,8%), IsiXhosa (17,6%), Afrikaans (13,3%), Sepedi (9,4%),

Languages English (8,2%), Setswana (8,2%), Sesotho (7,9%), Xitsonga (4,4%),
other (7,2%)

Ethnic groups Black African (79%), White (9,6%), Coloured (8,9%), Indian/Asian (2,5%)

Zion Christian (11,1%), Pentecostal/Charismatic (8,2%), Catholic (7,1%),

Religions Methodist (6,8%), Dutch Reformed (6,7%), Anglican (3,8%), Muslim
(1,5%), other Christian (36%), other (2,3%), none (15,1%)

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Economy
Current account (as % of GDP) -5%

Savings rate (% of GDP) 13,91% (2006 est.)

Foreign direct investment flows US$9 billion

Size of labour force 17,79 million (2008 est.)

Unemployment 22,9%

Currency South African Rand (ZAR)

2007 2008

Average exchange rate (versus US$) 7,05 7,9576

GDP US$283,38 billion US$276,76 billion

GDP growth rate 5,1% 3,1%

GDP per capita (PPP) US$9 900 (est.) US$10 100 (est.)

GNI US$452,53 billion US$476,24 billion

GNI per capita (PPP) US$9 460 US$9 780

Inflation rate (consumer prices) 6,5% (est.) 11,3% (est.)

Growth and Structure of the Economy

South Africa is a middle-income, emerging market with an abundant supply of natural

resources, well-developed financial, legal, communications, energy and transport

sectors, a stock exchange that is the 17th largest in the world and modern infrastructure

supporting an efficient distribution of goods to major urban centres throughout the region.

South Africa’s mines are the world’s largest producers of platinum, gold and chromium;

and the country’s mining sector accounts for 8,4% of total value added. South African

has significant automobile assembly, metal-working, machinery, textiles, iron and steel,

chemicals, fertiliser, foodstuffs and commercial ship repair industries. However, the

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country’s manufacturing sector remains constrained by low productivity and capacity

constraints. The tertiary sector accounts for nearly 65% of national GDP, and is dominated

by financial services and wholesale and retail trade.

Growth was robust from 2004 to 2008, averaging 5%, as South Africa reaped the benefits

of macro-economic stability and a global commodities boom, but began to slow in the

second half of 2008 due to the impact of the global financial crisis on commodity prices

and demand. The industrial sector registered a 1% growth rate in 2008. Unemployment

remains high in South Africa and outdated infrastructure has constrained growth. At the

end of 2007, South Africa began to experience an electricity crisis because the state

power supplier, Eskom, suffered supply problems with ageing plants, necessitating

‘load-shedding’ cuts to residents and businesses in the major cities. Daunting economic

problems also remain from the apartheid era, especially poverty, a lack of economic

empowerment among the population’s previously disadvantaged groups and a shortage

of public transportation.

Trade
Exports and Imports 2007 2008

Total exports US$75,92 billion (est.) US$86,12 billion (est.)

Export growth rate - 1,7%

Total imports US$81,66 billion (est.) US$90,57 billion (est.)

Import growth rate - 1,1%

International Trade
South Africa’s chief exports are gold, diamonds, platinum, other metals and minerals,

machinery and equipment. These commodities are mainly exported to the USA (11,9%),

Japan (11,1%), Germany (8%), the United Kingdom (6,8%), China (6%) and the

Netherlands (5,2%).

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South Africa’s main imports are machinery and equipment, chemicals, petroleum

products, scientific instruments and foodstuffs. The country’s chief import partners are

Germany (11,2%), China (11%), the USA (7,9%), Saudi Arabia (6,2%), Japan (5,5%) and

the United Kingdom (4%).

Barriers to Trade
South Africa is a member of both the SACU and SADC. Although tariff barriers and

quantitative restrictions have largely been eliminated between the SACU members, intra-

SACU trade is constrained by various non-tariff barriers including seasonal import bans,

levies and surcharges, customs administration procedures and border transport charges.

Additional barriers to trade in South Africa include services market barriers, some import

and export permit requirements, burdensome technical standards, non-transparent

government procurement procedures, and cumbersome and inefficient bureaucracy, all

of which add to the cost of trade in the country.

SADC implemented an FTA in 2008, which involves the elimination of tariffs and non-tariff

barriers among member countries. South Africa’s weighted average tariff rate was 5,1%

in 2006.

Business Climate

Infrastructure and Trade

Number of power outages in a typical month 2,17 (2007)

Average time to clear direct exports through customs (days) 4,56 (2007)

Average time to clear imports through customs (days) 5,92 (2007)

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Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 34 Getting credit 2

Starting a business 67 Protecting investors 10

Dealing with construction

52 Paying taxes 23
permits

Employing workers 102 Trading across borders 148

Registering property 90 Enforcing contracts 85

Closing a business 76

Business Travel, Culture, Risk and Investment

Travelling to South Africa from any part of the world is easy as most countries offer flights

to OR Tambo International Airport (outside Johannesburg), and, increasingly, to the

international airports in Durban and Cape Town.

When looking to do business in South Africa, it is important to note that, generally,

South Africans are transactional and do not need to establish long-standing personal

relationships before conducting business. Prior appointments for business engagements

are recommended and should be made as far in advance as possible.

South Africa has an independent judiciary, and contracts are generally secure. Investment

risk in the country is low.

Regulatory Policy Framework for Businesses

Foreign and domestic investments are treated equally under South African law. South

Africa permits foreign investment in most business sectors, generally without restricting

its form or extent. Assistance to foreign investors is provided by the dti’s Trade and

Investment South Africa (TISA) Division, in the form of information on sectors and

industries, consultation on the regulatory environment, facilitation of investment missions,

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links to joint ventures, information on incentive packages and assistance with work

permits. Investment incentives for manufacturing offered by the dti include Foreign

Investment Grants, Industrial Development Zones, the Skills Support Programme, the

Strategic Investment Project Programme, the Critical Infrastructure Facility, and the Small

and Medium Enterprise Development Programme.

Black Economic Empowerment (BEE) is a key government priority in South Africa and

seeks to increase the economic participation of historically disadvantaged members of the

population. BEE requirements are set out in the Codes of Good Practice and relate to best

practices for employment equity, skills development, enterprise development, preferential

procurement, equity ownership and SMEs. Importantly, while meeting BEE criteria is not

a legal requirement, businesses that do not meet the criteria are disadvantaged when

competing for government tenders.

Non-residents are permitted to transfer capital freely into and out of South Africa, but

all transactions must be reported to the relevant authorities. International commercial

transactions must be handled by an authorised foreign exchange dealer and every

purchase of foreign exchange is required to be reported, regardless of the amount

purchased.

The South African government is legally permitted to expropriate private property for

reasons of public necessity under the Expropriation Act of 1975, and is required to pay

fair compensation (fair market value).

Income tax rates in South Africa are relatively high, with the top income tax rate set at

40%. In comparison, the corporate tax rate is moderate, with a top corporate tax rate of

28%. Other relevant taxes include VAT levied at 14%, property tax, securities transfer tax,

inheritance tax and capital gains tax.

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Opportunities for Investment in South Africa
South Africa boasts a unique combination of a highly developed first-world economy with

a huge emergent market economy that makes entrepreneurship and dynamic investment

possible.

There are a wide range of investment opportunities in the country, and the dti has

highlighted seven sectors and industries where growth has occurred at a rapid rate.

First, major investment opportunities exist in the country’s diverse agri-processing sector

that consists of 11 downstream agricultural sub-sectors, including meat processing,

preservation of fruit and vegetables, dairy products, and canning and preserving of fish.

Second, the country is home to a rapidly expanding automotive industry. Major global

companies including BMW, Ford, Volkswagen, DaimlerChrysler and Toyota all have

production plants in the country. In addition, component manufacturers like Arvin Exhaust,

Bloxwitch, Corning and Senior Flexonics have also established production bases in South

Africa. The industry is largely located in two provinces, the Eastern Cape (coastal) and

Gauteng (inland). One of the many benefits for investors in this sector is that companies

with production plants in South Africa are well placed to take advantage of low production

costs, coupled with access to new markets.

Third, the banking and financial services sector is dominated by four major commercial

banking groups: Absa, First National Bank, Standard Bank and Nedbank that provide retail

and investment banking services in competition with a wide range of niche commercial

banks.

Fourth, South Africa is a world leader in the chemicals sector and specialises in the

manufacture of synthetic fuel from coal. The petroleum and petrochemical industry is

dominated by four oil refineries as well as the Sasol and PetroSA operations.

126
Fifth, the commercial fishing industry in South Africa is valued at about R2 billion annually,

with trawling representing the most important economic activity. Demersal fish – such as

hake, Agulhas sole and kingklip – comprise the largest part of the fishery sector.

Sixth, opportunities are abundant in the mining and minerals sectors, with South Africa

holding the world’s largest reserves of gold (35%), platinum group metals (55,7%),

manganese ore (80%), chrome ore (68,3%) and titanium metals (21%). The country

also produces a large share of the world’s diamonds and mineral deposits. Lucrative

opportunities exist for downstream processing and value adding in the iron, carbon steel,

stainless steel, aluminium, platinum group metals and gold industries.

Seventh, the South African tourism industry is valued at US$10 billion a year and is

expected to rise sharply as the government and the private sector invest in a marketing

and promotion drive. The country’s tourism infrastructure is sophisticated and developed,

but key opportunities exist in this arena driven by rising demand. Eco-tourism promises

excellent investment and development potential.

Other important potential sectors for investment in South Africa include food and

beverages, Information and Communications Technology (ICT) and electronics, property,

telecommunications and textiles.

127
Kingdom of
Swaziland
Geography and People

Location Southern Africa, between Mozambique and South Africa

Area 17 364km2

Capital city Mbabane

Other major
Manzini, Mhlume
cities

Climate Varies from tropical to near temperate

Natural Asbestos, coal, clay, cassiterite, hydropower, forests, small gold and
resources diamond deposits, quarry stone, talc

Key ports Swaziland is landlocked

Population 1 123 913 (2009 est.)

Population
-0.459% (2009 est.)
growth rate
Life
31,99 years
expectancy

0 – 14 years: 39,4%
Age
15 – 64 years: 56,9%
distribution
65 years and over: 3,7%

English (official, government business conducted in English), siSwati

Languages
(official)

Ethnic groups Black (97%), European (3%)

Zionist (40%), Roman Catholic (20%), Muslim (10%), other (includes

Religions
Anglican, Bahai, Methodist, Mormon, Jewish) (30%)

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Economy
Current account (as % of GDP) -6,6%

Savings rate (% of GDP) 18,73% (2006 est.)

Foreign direct investment flows US$10 million

Size of labour force 457 900 (2007 est.)

Unemployment 40% (2006 est.)

Currency Lilangeni (SZL)

2007 2008

Average exchange rate (versus US$) 7,4 7,75

GDP US$2,95 billion US$2,84 billion

GDP growth rate 3,5% 2,4%

GDP per capita (PPP) US$4 400 US$4 400

GNI US$5,62 billion US$5,85 billion

GNI per capita (PPP) US$4 800 US$5 010

Inflation rate (consumer prices) 8,1% (2007 est.) 13,4% (2008 est.)

Growth and Structure of the Economy

Swaziland’s economy is small, and approximately 70% of the population is involved in

subsistence agriculture. While agriculture and fishing only account for approximately

7% of national GDP, the sector plays a significant role in generating employment and

reducing poverty in Swaziland. Manufacturing accounts for a significantly greater share

of GDP, contributing 43,4% to national GDP. Although the manufacturing sector has
diversified since the mid-1980s, it is still driven primarily by the country’s sugar industry.

Indeed, sugar and wood pulp represent important foreign exchange earners. Other key

manufacturing activities in Swaziland include the production of soft drink concentrates

129
and clothing and textiles. Mining has declined in importance in recent years with only coal

and quarry stone mines remaining active.

Surrounded by South Africa, except for a small border with Mozambique, the Swaziland

economy is heavily dependent on South Africa from which it receives more than 90% of

its imports and to which it sends 60% of its exports. Swaziland’s currency is pegged to

the South African Rand.

Economic growth in Swaziland is constrained by a variety of social challenges. In particular,

the country’s high HIV and AIDS prevalence rate has created substantial human capacity

problems which have a negative impact on economic growth.

Trade
Exports and Imports 2007 2008

Total exports US$1,95 billion (est.) US$1,756 billion (est.)

Export growth rate - -

Total imports US$1,926 billion (est.) US$1,855 billion (est.)

Import growth rate - -0.4%

International Trade
Swaziland’s major exports are soft drink concentrates, sugar, wood pulp, cotton yarn,

refrigerators, citrus and canned fruit. The country’s dominant export partners are South

Africa, the USA and the European Union (EU).

Swaziland’s primary import commodities are motor vehicles, machinery, transport

equipment, foodstuffs, petroleum products and chemicals. The country’s chief import

partners are South Africa (95,6%), the EU (0,9%), Japan (0,9%) and Singapore (0,3%).

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Trade with South Africa

(Rands ‘000) 2005 2006 2007

Total exports 0 0 0
Total imports 264 807 1 541
Trade balance -264 -807 -1 541

South Africa does not include Swaziland in its published external trade statistics as the

country is a member of the SACU, and trade between the countries is, technically, not

seen as external.

Bilateral Agreements with South Africa

• Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion
with respect to Taxes on Income (2004); and
• Agreement on the Establishment of a Joint Bilateral Commission for Co-operation (2004).

Barriers to Trade
Swaziland is a member of both the SACU and SADC. Although tariff barriers and
quantitative restrictions have largely been eliminated between the SACU members, intra-
SACU trade remains constrained by various non-tariff barriers, including seasonal import
bans, levies and surcharges, customs administration procedures and border transport
charges. SADC implemented an FTA in 2008, which involves the elimination of tariffs and

non-tariff barriers among member countries.

Business Climate
Infrastructure and Trade

Number of power outages in a typical month 2,54 (2006)

Average time to clear direct exports through customs (days) 3,98 days (2006)

Average time to clear imports through customs (days) 2,17 days (2006)

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Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 115 Getting credit 43

Starting a business 158 Protecting investors 180

Dealing with construction

24 Paying taxes 54
permits

Employing workers 55 Trading across borders 158

Registering property 158 Enforcing contracts 130

Closing a business 68

Business Travel, Culture, Risk and Investment

Royal Swazi Air and South African Airways fly regularly between Swaziland and South

Africa. South African passport holders do not require a visa to enter Swaziland.

While the usual business formalities should be observed in Swaziland, business people

and investors should expect a casual atmosphere and pace when conducting business

in the country.

Regulatory Policy Framework for Businesses

There are no formal policies or practices that discriminate against foreign investors, and

companies can be 100% foreign-owned. However, the new Constitution bars the vesting

of ownership of land in foreign-owned companies or foreigners unless ownership was

attained before the promulgation of the Constitution on 8 February 2006. However, the

Constitution states that this provision “may not be used to undermine or frustrate any

existing or new legitimate business undertaking of which land is a significant factor or

base”.

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Foreign investment is screened in the form of standard background checks. If the source

of investment funding comes from outside of Swaziland there is no requirement for further

screening. As a general rule, all investors are screened for credit-worthiness and their

business ethics track record as well as for any criminal records.

Foreign investors are free to invest in all sectors of the Swazi economy, aside from the

government monopolies in telephones, water and electricity. Other areas in which the

government disallows investment are in the manufacturing of arms, chemical and biological

weapons, radioactive materials, explosives and manufacturing involving hazardous waste

treatment or disposal. The country’s investment legislation also guarantees investors

protection against expropriation, except under specified circumstances.

Payments are made freely within the Common Monetary Area (Swaziland, Lesotho,

Namibia and South Africa) and any exchange control regulations only apply outside

this area. The Central Bank of Swaziland administers exchange control, and authorised

dealers (commercial banks) are empowered to approve certain foreign exchange

transactions. No customs or excise tariffs are applicable on goods originating from the

SACU as Swaziland is a member of the SACU and customs duties are levied at the first

port of entry into the Common Customs Area.

Taxes are moderately high in Swaziland. The top income tax rate is set at 33%, while the

corresponding corporate tax rate is 30%. Other relevant taxes include a real estate tax

and a fuel tax.

Opportunities for South African Businesses

Swaziland boasts a favourable business environment, excellent market access, good

infrastructure and a well-educated and skilled workforce. Key sectors that are flourishing

in Swaziland and that would interest investors include mining, tourism, manufacturing and

agro-business.

133
Republic of
Zambia
Geography and People

Location Southern Africa, east of Angola

Area 752 618km2

Capital city Lusaka

Other major
Ndola, Kitwe, Kabwe
cities

Climate Tropical; modified by altitude; rainy season (October to April)

Natural Copper, cobalt, zinc, lead, coal, emeralds, gold, silver, uranium,
resources hydropower

Key ports Zambia is landlocked

Population 11 862 740 (2009 est.)

Population
1,631% (2009 est.)
growth rate
Life
38,63 years
expectancy

0 – 14 years: 45,1%
Age
15 – 64 years: 52,6%
distribution
65 years and over: 2,3%

Bemba (official), Nyanja (official), Tonga (official), Lozi (official), Lunda

Languages (official), Kaonde (official), Luvale (official), English (official), Chewa,
Nsenga, Tumbuka, Lala

Black Includes Bemba, Tonga, Chewa, Lozi, Nsenga, Tumbuka, Ngoni,

Ethnic groups Lala, Kaonde, Lunda) (99,5%), other (includes Europeans, Asians,
Americans) (0,5%)

Christian (50% – 75%), Muslim and Hindu (24% – 49%), indigenous

Religions
beliefs (1%)

134
Economy
Current account (as % of GDP) -3,9%

Savings rate (% of GDP) 22,97% (2006)

Foreign direct investment flows US$939 million

Size of labour force 5,235 million (2008 est.)

Unemployment 50% (2000 est.)

Currency Zambian Kwacha (ZMK)

2007 2008

Average exchange rate (versus US$) 3 990,2 (est.) 3 512,9 (est.)

GDP US$11,41 billion US$14,65 billion

GDP growth rate 6,3% 5,8%

GDP per capita (PPP) US$1 400 US$1 500

GNI US$13,88 billion US$15,52 billion

GNI per capita (PPP) US$1 130 US$1 230

Inflation rate (consumer prices) 10,6% (est.) 12,4% (est.)

Growth and Structure of the Economy

During the 1960s, Zambia was considered a middle-income country and was the world’s

third-largest producer of copper. However, falling copper prices and mismanagement of

state-owned mines led to steadily declining income from 1974 to 1990. Today, subsistence

agriculture is the main employer. The agriculture sector contributes about 16% of GDP,

industry about 26,6% of GDP and the services sector 57,4% of GDP. Zambia’s main
industries include copper mining and processing, construction, foodstuffs, beverages,

chemicals, textiles, fertiliser and horticulture.

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Zambia’s political and macro-economic stability has facilitated steady economic growth

over the past five years. As a result, poverty levels have declined in urban areas but growing

poverty levels in the rural areas of the country remain a matter of concern. Consequently,

better governance, the development of a more robust private sector, and diversification of

the economy are government priorities designed to improve business opportunities and

generate continued economic development. Nevertheless, the manufacturing, wholesale

and retail and finance and insurance sectors have all registered steady growth in recent

years.

Trade

Exports and Imports 2007 2008

Total exports US$4,594 billion (est.) US$4,818 billion (est.)

Export growth rate - -

Total imports US$3,611 billion (est.) US$4,694 billion (est.)

Import growth rate - 6,0%

International Trade
Zambia’s primary export commodities are copper and cobalt (64%), electricity, tobacco,

flowers and cotton. The country’s main export partners are China (14,2%), South Africa

(8,5%), the Democratic Republic of the Congo (8,1%), Saudi Arabia (7,9%), South Korea

(7,9%), Egypt (7,7%), Italy (6,9%) and Belgium (4,1%).

Zambia’s primary imports are machinery, transportation equipment, petroleum products,

electricity, fertiliser, foodstuffs and clothing and its dominant import partners are South

Africa (51,7%), the UAE (8%), China (6,8%) and India (4,5%).

136
Trade with South Africa

(Rands ‘000) 2005 2006 2007

Total exports 5 441 963 7 984 927 10 084 381

Total imports 1 303 600 1 842 287 2 490 076

Trade balance 4 138 363 6 142 640 7 594 305

Bilateral Agreements with South Africa

• Treaty for the Avoidance of Double Taxation (1956); and
• Memorandum of Understanding on Economic Co-operation (2009) [signed but not yet
tabled in Parliament].

Barriers to Trade
Zambia is a member of SADC. SADC implemented an FTA in 2008, which involves the

elimination of tariffs and non-tariff barriers among member countries.

Countries outside the SADC region are faced with some trade barriers. These include

import restrictions, some services market access barriers, import taxes, non-transparent

and burdensome import certification requirements, export licensing requirements, inefficient

and cumbersome customs implementation and corruption, all of which add to trade costs.

Business Climate
Infrastructure and Trade

Number of power outages in a typical month 4,15 (2007)

Average time to clear direct exports through customs (days) 3,11 days (2007)

Average time to clear imports through customs (days) 6,55 days (2007)

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Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 90 Getting credit 30

Starting a business 94 Protecting investors 73

Dealing with construction
151 Paying taxes 36
permits

Employing workers 116 Trading across borders 157

Registering property 94 Enforcing contracts 87

Closing a business 83

Business Travel, Culture, Risk and Investment

The principal airlines that fly to Zambia are Air Zambia and South African Airways as well

as a number of other African airlines. There is an international airport at Lusaka. South

African passport holders do not require a visa to enter Zambia.

Formal dress is acceptable at business meetings. English is widely used in business

circles in Zambia.

Regulatory Policy Framework for Businesses

The government actively seeks foreign investment through the Zambian Investment

Centre, intended to be a one-stop resource for international investors interested in

Zambia. There are no local content, equity, financing, employment or technology transfer

requirements. Investments may be expropriated only by an Act of Parliament, and

compensation at a fair market value is required. In addition, land, which is held under 99-

year leases, may ‘revert’ to the government if it is ruled to be underdeveloped.

Foreign investors are treated in the same way as domestic investors. An investment

board screens all investments for which incentives are requested. Investments in

communications, banking, tourism, transport, mining, health, education and aviation are

subject to additional regulations and approvals. The retail sector is closed to foreigners.
138
Residents and non-residents may hold foreign exchange accounts. There are no controls

on payments, transfers, capital transactions or repatriation of profits.

The government requires ‘import certificates’ for items such as meat, poultry, plants,

pharmaceuticals, firearms and ammunitions. Export licences are required for fertiliser,

firearms, live animals, historical artefacts and wildlife trophies. The Exchange Control

Act has been abolished. The Bank of Zambia does not apply any exchange controls and,

therefore, is not involved in the approval of payments for imports.

In general terms, the regulatory framework governing business in Zambia is characterised

by extensive bureaucratic red tape, weak contract enforcement and a burdensome

dispute resolution process.

Tax rates in Zambia are relatively high. Both the top income and corporate tax rates are

set at 35%. Banks, mining companies and farmers are also subject to an array of special

tax rates. Other relevant tax rates in force include VAT and a property transfer tax.

Opportunities for South African Businesses

Zambia is endowed with abundant natural resources ranging from minerals, arable

land and forests, to rivers, waterfalls, lakes and wildlife – all of which increase the

investment potential of the country. The country remains sufficiently underdeveloped to

offer considerable potential for profitable opportunities for investors. The prime sectors

for investment include manufacturing, bolstered by Zambia’s abundant raw materials, a

strong labour force and access to a stable banking and financial system; and agriculture,

with widespread access to arable land for large-scale modern farming. This has prompted

the Zambian government to allocate land for potential investors close to railway tracks

where electrification is possible.

139
Opportunities in the mining sector are based around Zambia’s enormous reserves of

copper-cobalt ore, which have positioned the country as the fourth-largest producer

of copper metal. Gold, nickel, lead-zinc, iron and manganese are also mined on a

significant scale in Zambia. In addition, Zambia is endowed with a very high quality of

gemstones – emerald, amethyst, aquamarine, rubies, garnets, and diamonds – which

remain unexploited. With the privatisation of the mining sector, potential opportunities

have become very attractive.

In Zambia’s vibrant tourism industry, opportunities exist to promote adventure holidays,

white-water rafting, canoeing, rock-climbing, hang-gliding, fishing, and bungee jumping

at Victoria Falls.

Other industries with investment potential include the energy sector along with the

development of infrastructure.

140
141
Republic of
Zimbabwe
Geography and People

Location Southern Africa, between South Africa and Zambia

Area 390 757km2

Capital city Harare

Other major
Bulawayo, Kariba, Gweru, Mutare
cities

Climate Tropical; moderated by altitude; rainy season (November to March)

Natural Coal, chromium ore, asbestos, gold, nickel, copper, iron ore, vanadium,
resources lithium, tin, platinum group metals

Key ports Zimbabwe is landlocked

Population 11 392 629 (2009 est.)

Population
1,53% (2009 est.)
growth rate
Life
45,77 years
expectancy
0 – 14 years: 43,9%
Age
15 – 64 years: 52,2%
distribution
65 years and over: 3,9%

English (official), Shona, Sindebele (Ndebele), numerous but minor

Languages
tribal dialects

Shona (82%), Ndebele (14%), mixed and Asian (1%), white (less than
Ethnic groups
1%)

Syncretic (50%), Christian (25%), indigenous beliefs (24%), Muslim and

Religions
other (1%)

142
Economy
Current account (as % of GDP) -21.4%

Savings rate (% of GDP) -

Foreign direct investment flows US$52 million

Size of labour force 4,039 million (2008 est.)

Unemployment 80% (2008 est.)

Currency Zimbabwean Dollar (ZWD)

2007 2008

Average exchange rate (versus US$) 30 000 -

GDP US$3,58 billion US$3,15 billion

GDP growth rate -6,9% -14,1%

GDP per capita (PPP) US$200 US$200

GNI - -

GNI per capita (PPP) - -

Inflation rate (consumer prices) 12 563% (est.) 14,93 billion % (est.)

Growth and Structure of the Economy

Zimbabwe’s previously well-developed economic infrastructure has been set back due

to the political tension prevalent in the country in the last decade. Agriculture, which

contributes about 18,1% of GDP, was previously the mainstay of the Zimbabwean

economy. However, the sector has been crippled by mismanagement. The industry sector

contributes about 22,6% of GDP and the services sector 59,3% of GDP. Zimbabwe’s major
industries include mining (coal, gold, platinum, copper, nickel, tin, clay, numerous metallic

and non-metallic ores), steel, wood products, cement, chemicals, fertiliser, clothing and

footwear, foodstuffs and beverages.

143
Hyperinflation and high national expenditures have crippled the national economy, leaving

Zimbabwe as one of Africa’s poorest countries. National GDP has declined by more than

50% in the past eight years. The Zimbabwean government has used the Reserve Bank

of Zimbabwe to finance the deficit spending and to provide direct loans to state-owned

enterprises. The government has also used various combinations of foreign-exchange

controls and complicated multiple exchange-rate regimes to try to keep exporters in

business as the economic crisis in the country has spiralled out of control. Corruption and

lack of transparency are likely to remain high as long as the government maintains its

steadfast control of the economy.

Trade

Exports and Imports 2007 2008

Total exports US$1,467 billion (est.) US$1,396 billion (est.)

Export growth rate - -

Total imports US$1,975 billion (est.) US$1,915 billion (est.)

Import growth rate - -

International Trade
Zimbabwe’s main export commodities include platinum, cotton, tobacco, gold, ferro-alloys

and textiles and clothing. The country’s main export partners are South Africa (32.1%),

the Democratic Republic of the Congo (9,7%), Botswana (8,7%), China (5,6%), Zambia

(4,8%), Japan (4,5%), Italy (4,4%) and the USA (4,3%).

Zimbabwe’s main import commodities are machinery and transport equipment, other

manufactures, chemicals and fuels. Key import partners include South Africa (60,1%),

China (4,2%) and Botswana (3,7%).

144
Trade with South Africa

(Rands ‘000) 2005 2006 2007

Total exports 7 486 859 7 410 602 8 501 124

Total imports 3 131 518 4 633 368 6 036 490
Trade balance 4 355 341 2 777 234 2 464 634

Bilateral Agreements with South Africa

• Treaty for the Avoidance of Double Taxation (1965); and
• Agreement on the Promotion and Reciprocal Protection of Investments (2009) [signed
but not yet ratified].

Barriers to Trade
Zimbabwe is a member of SADC. The implementation of the SADC FTA in 2008 has

meant that there are no existing trade barriers between South Africa and Zimbabwe. The

FTA involves the elimination of tariffs among SADC member countries, while each country

maintains its policy on tariffs vis-à-vis the outside world.

Zimbabwe’s weighted average tariff rate was 17,3% in 2003. Import bans and restrictions,

services market access restrictions, import taxes, government controls on exports

and domestic trading of major agricultural commodities, and customs inefficiency and

corruption add to trade costs for countries outside the SADC region.

Business Climate
Infrastructure and Trade

Number of power outages in a typical month -

Average time to clear direct exports through customs (days) -

Average time to clear imports through customs (days) -

145
Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 159 Getting credit 113

Starting a business 145 Protecting investors 119

Dealing with construction
178 Paying taxes 131
permits

Employing workers 142 Trading across borders 167

Registering property 84 Enforcing contracts 78

Closing a business 156

Business Travel, Culture, Risk and Investment

All flights from South Africa to Zimbabwe are available via Johannesburg and are operated

by South Airways and British Airways to Livingstone and Harare, and Air Zimbabwe to

Harare. South African passport holders are able to obtain a free single-entry visa stamp

at their port of entry into Zimbabwe. South African temporary passports are accepted as

long as they are valid. Business travellers from South Africa are required to provide a

letter of invitation from the company or organisation to be visited in Zimbabwe, as well as

a supporting letter from their employer.

It is recommended that men wear a suit and tie when conducting business engagements.

The turbulent political climate in Zimbabwe has led many international investors to either

withdraw their investment or refrain entirely from investing due to the heightened risk to

investments. The shortage of foreign currency in the country makes it almost impossible

to repatriate dividends from investments and there is reportedly a large backlog of such

dividends awaiting repatriation. Furthermore, state intervention in many sectors and the

government’s tight command on the economy make for an unwelcoming environment of

foreign investment.

146
Regulatory Policy Framework for Businesses
The government prefers majority Zimbabwean participation in new investment projects

and specifies that the degree of local ownership will be a prime criterion in the evaluation

of investment proposals. Certain sectors are preserved for local investment, while

foreign ownership is restricted to 35% in agricultural operations related to the primary

production of food and cash crops; primary horticulture; game; wildlife ranching and

livestock; forestry; poultry farming; grain milling; and sugar refining. Similar restrictions

apply in transportation; retail and wholesale trade; barber shops, hairdressing and beauty

salons; commercial photography; employment agencies; manufacturing, marketing and

distribution of armaments; water provision for domestic and industrial purposes; bakery

and confectionary; tobacco packaging and grading; and cigarette manufacturing.

Foreign investors are required to register with the Zimbabwe Investment Authority and

obtain prior approval by means of an investment certificate before launching a new

project. Furthermore, all private businesses are required to incorporate and register

with the Registrar of Companies within the framework of their investment certificate or

exchange control approval.

Zimbabwe’s Constitution prohibits the acquisition of private property without compensation.

Tax rates in Zimbabwe are high and burdensome. The top income tax and corporate tax

rates are 47,5% and 30%, respectively. Additional taxes include a 3% AIDS surcharge on

all taxes, VAT and capital gains tax.

147
Opportunities for South African Businesses
Despite been plagued by devastating economic and political crises, Zimbabwe still offers

opportunities for investment based on its abundant natural resources, well-developed

infrastructure and an educated, competitive labour force.

Great emphasis is placed on growing Zimbabwe’s manufacturing sector where textiles,

clothing and footwear, chemical, wood and furniture, metal and metal products, and

technology are the most influential industries. The mining and tourism sectors also

offer investment opportunities. Along with the agriculture sector, where opportunities to

establish businesses in agro-processing and the agro-forestry sectors exist, investors

should look to the construction, infrastructure and transport sectors as influential sectors

in Zimbabwe

148
149
EAST AFRICA
• Burundi • Rwanda

• Comoros • Somalia

• Djibouti • Sudan

• Eritrea • Tanzania

• Ethiopia • Uganda

• Kenya

150
Eritrea

Djibouti

Sudan

Somalia
Ethiopia

Uganda
Kenya

Rwanda

Burundi
Tanzania

Comoros

151
Republic of
Burundi
Geography and People

Location Central Africa, east of Democratic Republic of Congo

Area 27 830km2

Capital city Bujumbura

Other major
Gitega, Ngozi, Bururi
cities

Equatorial; two wet seasons (February to May and September to

Climate November), and two dry seasons (June to August and December to
January)

Nickel, uranium, rare earth oxides, peat, cobalt, copper, platinum,

Natural
vanadium, arable land, hydropower, niobium, tantalum, gold, tin,
resources
tungsten, kaolin, limestone

Key ports Burundi is landlocked

Population 8 988 091 (2009 est.)

Population
3,279% (2009 est.)
growth rate
Life
52,09 years
expectancy

0 – 14 years: 46,2%
Age
15 – 64 years: 51,3%
distribution
65 years and older: 2,5%

Kirundi (official), French (official), Swahili (along Lake Tanganyika and in

Languages
the Bujumbura area

Hutu (Bantu) (85%), Tutsi (Hamitic) (14%), Twa (Pygmy) (1%), Europeans
Ethnic groups
(0,03%), South Asians (0,02%)

Christian (67% – Roman Catholic 62%, Protestant 5%), indigenous

Religions
beliefs (23%), Muslim (10%)

152
Economy
Current account (as % of GDP) -10,9%

Savings rate (% of GDP) -

Foreign direct investment flows US$1 million

Size of labour force 4,245 million (2007)

Unemployment -

Currency Burundi Franc (BIF)

2007 2008

Average exchange rate (versus US$) 1 065 1 198 (est.)

GDP US$0,97 billion US$1,1 billion

GDP growth rate 3,6% 4,5%

GDP Per capita (PPP) US$300 US$300

GNI US$2,88 billion US$3,08 billion

GNI Per capita (PPP) US$370 US$380

Inflation rate (consumer prices) 8,3% 24,1% (est.)

Growth and Structure of the Economy

Burundi is a landlocked, resource-poor country with an underdeveloped manufacturing
sector. Agriculture is the mainstay of the economy, contributing nearly half of the country’s
GDP, and with more than 90% of the population dependent on subsistence agriculture.
Economic growth and performance is heavily dependent on coffee and tea exports, which
account for 90% of foreign exchange earnings. This renders the economy particularly
vulnerable to fluctuations in weather conditions and international coffee and tea prices,
which have a pervasive influence on the country’s ability to pay for imports. The economy’s
vulnerability to international food prices is evident in the sharp rise in inflation between

153
2007 and 2008, with inflation reaching 24,1% in 2008 on the back of significant increases
in international food and oil prices.

The country’s GDP growth rate slowed between 2006 and 2008, primarily due to the

vulnerability of the primary sector and exposure to external shocks, which saw the primary

sector grow at a rate of just 0,1% in 2007. The secondary and tertiary sectors fared

comparatively better, achieving steady growth of 6,2% and 7,2% respectively in 2007.

Encouragingly, although food, medicine and electricity remain in short supply, new-found

political stability and the end of the civil war in the country have both contributed to

improved aid flows and an upturn in economic growth and activity in Burundi.

Trade
Exports and Imports 2007 2008

Total exports US$52,9 million (est.) US$79 million (est.)

Export growth rate - 10,2%

Total imports US$257,6 million (est.) US$350 million (est.)

Import growth rate - 1,9%

International Trade
The Burundian economy is largely subsistence based with coffee as its chief cash crop.

Burundi’s other main exports are tea, sugar, cotton and hides and its main exporting partners

are Switzerland (27,9%), the United Kingdom (11%), Pakistan (9,5%), Belgium (5,1%), Rwanda

(5%) and Egypt (4,7%).

The country’s chief imports are capital goods, petroleum products and foodstuffs. Burundi

imports these commodities mainly from Saudi Arabia (20,7%), Belgium (12,6%), Uganda

(8,4%), Kenya (7,4%), China (5,9%), France (5,4%), Germany (4,9%), India (4,1%), Tanzania

(4,1%) and Japan (4%).

154
Trade with South Africa

(Rands ‘000) 2007 2008 2009

Total exports 36 944 48 010 47 238

Total imports 3 075 2 511 484

Trade balance 33 870 45 499 46 754

Bilateral Agreements with South Africa

• General Co-operation Agreement (2007).

Barriers to Trade
Burundi’s weighted average tariff rate was 13,5% in 2006. The government has removed

most quantitative restrictions on imports, but numerous fees and taxes, inadequate

administrative capacity, and corruption in customs and excise administration add to

trade costs.

Business Climate

Infrastructure and Trade

Number of power outages in a typical month 12,04 (2006)

Average time to clear direct exports through customs (days) -

Average time to clear imports through customs (days) 10,75 (2006

155
Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 176 Getting credit 167

Starting a business 130 Protecting investors 154

Dealing with construction

172 Paying taxes 116
permits

Employing workers 88 Trading across borders 175

Registering property 118 Enforcing contracts 172

Closing a business 183

Business Travel, Culture, Risk and Investment

Flights from South Africa to Burundi enter the country via the international airport in the

capital city, Bujumbura. Several airlines offer flights from Johannesburg. South African

Airways offers one-stop flights via Nairobi, while Kenya Airways, Air Mauritius, Ethiopian

Airlines and Emirates have two-stop flights to Burundi. South Africans require a visa to

travel to Burundi. Visas are valid for one month from the date of issue.

Lightweight suits are typically worn to business meetings in Burundi and the best times for

visiting the country to conduct business are between April and October, or, alternatively,

between December and January.

Burundi has laws, regulations, and penalties in place to counter corruption. Enforcement

is sporadic, but, when applied, enforcement tends to be impartial, and no particular group,

domestic or foreign, is discriminated against.

156
Regulatory Policy Framework for Businesses
In 2008, the Burundian National Assembly adopted a new Investment Code designed

to represent a new framework for doing business in Burundi with a view to stimulating

economic growth and social development. The Investment Code simplifies and homonises

the country’s investment legislation in line with the frameworks in operation in the other

countries within the EAC (Kenya, Uganda, Tanzania and Rwanda). Importantly, the

code expressly states that the Republic of Burundi will refrain from the nationalisation or

expropriation of investments made in its territory.

The Code also encompasses the creation of straightforward tax advantages. Most notably,

investment tax incentives are automatic and do not require prior authorisation by the

National Investment Commission or by the Council of Ministers. Furthermore, the Code

contains provisions regarding the resolution of conflicts between investors and the state,

with the choice between litigation before a court or arbitration. Importantly, however, the

choice of arbitration is limited to internal arbitration for conflicts arising from investments

made with Burundian capital. In contrast, both internal and international arbitration are

available to investors for conflicts arising from investments that include some form of

foreign capital.

There is mandatory screening of foreign investment in specific circumstances. For

example, if a company seeks any of the special incentives provided through the

Investment Code, the project is screened by a panel of experts within the Ministry of

Planning. The screening mechanisms are routine and non-discriminatory, and serve to

determine whether a company is eligible to receive benefits from the Investment Code or

advantages from the Free Economic Zone. Any enterprise from any part of the country

can be a member of the Free Economic Zone, as long as its products are for export

only. All sectors within the economy are open to direct foreign investment, and foreign

investors receive the same legal treatment as domestic companies.

157
In general terms, the government of Burundi’s official policy toward FDI is welcoming,

generally free of restrictions on potential investors and designed to promote direct

investment. The legal system upholds the sanctity of contracts, and specific provisions

exist within the Civil and Commerce Code, which was adopted to provide substantial

incentives to FDI. No overall economic or investment strategy exists that has any

discriminatory effect on foreign-owned investors, and, in contrast to many states in the

region, there are no limits on foreign ownership or control of business.

Opportunities for South African Businesses

The agricultural sector is the backbone of the Burundian economy. And it is in agriculture

that investors will find the greatest potential. Specifically, the floriculture-, tea- and coffee-

producing industries are among the most influential in the country. Tourism in the country is

also flourishing as Burundi becomes increasingly known as the Eden in the Heart of Africa.

158
159
Union of the
Comoros
Geography and People

Southern Africa; group of islands at the northern mouth of the Mozambique

Location Channel, about two-thirds of the way between northern Madagascar and
northern Mozambique

Area 2 235km2

Capital city Moroni

Other major
Moutsamoudou, Domoni, Fomboni and Tsimbeo
cities

Climate Tropical marine; rainy season (November to May)

Natural
Few natural resources
resources

Key ports Port Moroni

Population 752 438 (2009 est.)

Population
2,766% (2009 est.)
growth rate

Life
63,47 years
expectancy

0 – 14 years(42,2%)
Age
15 – 64 years years (54,8%)
distribution
65 years and over (3,1%)

Arabic (official), French (official), Shikomoro (a blend of Swahili and

Languages
Arabic

Ethnic groups Antalote, Cafre, Makoa, Oimatsaha, Sakalava

Religions Sunni Muslim (98%), Roman Catholic (2%)

160
Economy
Current account (as % of GDP) -8%

Savings rate (% of GDP) 4,25% (2006)

Foreign direct investment flows US$8 million

Size of labour force 268 500 (2007 est.)

Unemployment 20% (1996 est.)

Currency Comoran Franc (KMF)

2007 2008

Average exchange rate (versus US$) 361,4 -

GDP US$0,47 billion US$ 0,53 billion

GDP growth rate 0,5% 1%

GDP Per capita (PPP) US$1 000 US$ 1 000

GNI US$0,73 billion US$0,75 billion

GNI Per capita (PPP) US$1 170 US$1 170

Inflation rate (consumer prices) 3% (est.) -

Growth and Structure of the Economy

One of the world’s poorest countries, the Comoros is made up of three separate islands.

The country is home to a young and rapidly increasing population, and few natural

resources. The low level of education of the labour force contributes to a subsistence

level of economic activity, high unemployment, and a heavy dependence on foreign

grants and technical assistance. Agricultural activities contribute about 40% of GDP and,

aside from a few large plantation owners, take place on a small scale. Nevertheless,

plantations engage a large proportion of the population in producing vanilla, cloves,

161
perfume essences and copra, which constitute the country’s primary cash crops. Indeed,

the agricultural economy, which also includes fishing, hunting and forestry, is heavily

monetised and employs about 80% of the labour force. This has allowed small-scale

farmers to benefit from recent currency devaluations directly but, at the same time, has

made them vulnerable to international price changes for imported items such as rice.

The industry sector contributes about 4% to national GDP and the services sector, a key

component of the economy, contributes approximately 56% of GDP. The most prominent

services industry in the Comoros is the tourism industry, which is growing – the country

attracts around 20 000 tourists annually, mainly from South Africa and Europe. However,

the unstable political situation in the country continues to hinder more rapid growth in

the industry. Furthermore, the Comoros has recorded persistent trade deficits, which are

covered by foreign aid, most of which comes from France. The country’s total external

debt was estimated at 72% of GDP in the first quarter of 2008.

Trade

Exports and Imports 2007 2008

Total exports - -

Export growth rate - -

Total imports - -

Import growth rate - -

International Trade
Primary export commodities are vanilla, ylang-ylang (perfume essence), cloves and

copra. The country’s main export partners are France (27,1%), Turkey (15,2%), India

(9,5%), Greece (9,4%), Brazil (8,9%), Algeria (7%), Singapore (6,8%) and Saudi Arabia

162
(4,3%). The country’s primary imports are rice and other foodstuffs, consumer goods,

petroleum products, cement and transport equipment. The main import partners of the

Comoros are Brazil (13,4%), France (13,1%), China (11,5%), the UAE (9,1%), India

(5,8%), Italy (5,3%), Pakistan (5,3%), Singapore (4,2%) and Kenya (4,2%).

Trade with South Africa

(Rands ‘000) 2007 2008 2009

Total exports 48 311 57 255 88 124

Total imports 1 668 889 1 699

Trade balance 46 643 56 367 86 425

Bilateral Agreements with South Africa

• None

Barriers to Trade
In addition to import fees, a number of non-tariff barriers to trade are prevalent in the

Comoros. Specifically, inadequate infrastructure and trade capacity, fragmented and non-

transparent customs administration and inefficient regulatory bureaucracy all add to trade

costs.

Business Climate
Infrastructure and Trade

Number of power outages in a typical month -

Average time to clear direct exports through customs (days) -

Average time to clear imports through customs (days) -

163
Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 162 Getting credit 167

Starting a business 168 Protecting investors 132

Dealing with construction
66 Paying taxes 41
permits

Employing workers 164 Trading across borders 133

Registering property 96 Enforcing contracts 153

Closing a business 183

Business Travel, Culture, Risk and Investment

The main international airport is Moroni International Prince Said Ibrahim (HAH), 25km

north of the city. There are numerous airlines flying to Comoros: Air France operates

regularly from Paris via Réunion and Comores Aviation provides domestic air services

between Moroni, Moheli, Anjouan and Mayotte. In addition, ships regularly sail from

East Africa, Mombasa, Madagascar, Mauritius, Réunion and Zanzibar to Moroni or

Moutsamoudou. These are mostly cargo vessels that might carry passengers. The islands

are linked by regular ferry services.

Business is usually conducted in French, and sometimes in Arabic, as few people speak

English. Investment risk remains relatively high in the Comoros in the sense that the country

is not yet a member of the MIGA, which protects investors against non-commercial risks.

Regulatory Policy Framework for Businesses

The investment division of the Ministry of Finance, Budget, Economy, Commerce and

Investments monitors and facilitates investment in the Comoros. There are no general

fiscal or other incentives for investors. Instead, each case is judged by the government

on its merits regarding which, if any, tax benefits should be granted. Capital transfers are

subject to prior approval, and foreign exchange is controlled by the central bank.

164
The Comoros has high taxes. The top income tax rate is 30%, and the top corporate tax

rate is 50%. Other taxes include a VAT, an insurance tax and a vehicle tax.

Protection of property rights is weak, and registration of real property is time-consuming

and expensive. Although women do not have the same legal protection as men, traditional

custom grants women favourable inheritance and property rights. The judicial system

is ineffective, contracts are weakly enforced, and courts are relatively inexperienced in

commercial litigation. Despite an adequate legal regime for the protection of intellectual

property rights, the government lacks the capacity and resources to enforce copyright
violations.

The Central Bank of Comoros manages the country’s exchange control and authorises

foreign exchange based on the strength of the import licence in question. However, the

Central Bank has delegated some approval authority related to exchange controls to

commercial banks and the country’s postal administration. Notably, all import transactions

valued at 500 000 CFA Francs or more must be domiciled with the authorised bank. In

terms of international payments, payments to France, Monaco and the CEMAC countries

are permitted freely, while invisible payments to other countries are subject to approval.

Opportunities for South African Businesses

The government in the Comoros has placed great emphasis on expanding and enhancing

the country’s tourism industry. The rehabilitation of infrastructure in the Comoros is having

a positive effect on the industry. The country continues to improve its capacity to provide

services of international standard in the form of access to quality hotels and tourism

infrastructure in the industry which makes it a lucrative prospect for investment.

Other sectors, which should prove to be of interest to South African businesses and

investors, are agriculture (vanilla, copra and essential oils) and fishing, which serve as

the primary sources of income in the Comoros.

165
Republic of
Djibouti
Geography and People

Eastern Africa, bordering the Gulf of Aden and the Red Sea, between
Location
Eritrea and Somalia

Area 23 200km2

Capital city Djibouti

Other major
Ali-Sabieh; Arta; Dikhil
cities

Climate Desert; torrid, dry

Natural Geothermal areas, gold, clay, granite, limestone, marble, salt, diatomite,
resources gypsum and pumice

Key ports Port Djibouti

Population 516 055 (2009 est.)

Population
1,903% (2009 est.)
growth rate

Life
63,47 years
expectancy

0 – 14 years: 43,3%
Age
15 – 64 years years: 53%
distribution
65 years and over: 3,7%

Languages French (official), Arabic (official), Somali and Afar

Somali (60%), Afar (35%), other (5%) (includes French Arab, Ethiopian,
Ethnic groups
Italian)

Religions Muslim (94%), Christian (6%)

166
Economy
Current account (as % of GDP) -17,1%

Savings rate (% of GDP) 20,70%

Foreign direct investment flows US$234 million

Size of labour force 351 700 (2007 est.)

Unemployment 59% (2007 est.)

Currency Djiboutian Franc (DJF)

2007 2008

Average exchange rate (versus US$) 177,71 -

GDP US$0,85 billion US$0,98 billion

GDP growth rate 5,1% 5,8%

GDP Per capita (PPP) US$2 600 (est.) US$2 700 (est.)

GNI US$1,87 billion US$1,97 billion

GNI Per capita (PPP) US$2 240 US$2 330

Inflation rate (consumer prices) 5% (est.) -

Growth and Structure of the Economy

The dominant services sector in Djibouti accounts for 81,9% of GDP. As a port city,

centrally located with respect to maritime routes to Asia, Europe, the Arabian Peninsula

and East Africa, Djibouti plays a central role in COMESA. The capital city, in which the

country’s sea port is located, serves as both a transit port for the region and an international

trans-shipment and refuelling centre, and is responsible for the bulk of economic activity.

Djibouti’s advantageous geographical location, coupled with a favourable environment for

FDI, has contributed to a rising GDP growth rate since 2004.

167
Agriculture contributes just 3,2% to national GDP. This is mainly due to minimal rainfall

in the country, which limits crop production to fruits and vegetables. Consequently, most

food in the country is imported. Industry in the country is limited and it contributes 14,9%

of national GDP. Djibouti’s main industries are construction and agricultural processing.

Unemployment is a major issue in Djibouti, with over 50% of people being without

work. In contrast, inflation in Djibouti is not a major concern due to a fixed tie between

the Djiboutian Franc and the US Dollar. However, the artificially high value of the local

currency has an adverse affect on the country’s balance of payments. Indeed, the country

is highly dependent on foreign assistance to help support its balance of payments and

to finance development projects. Per capita consumption has declined in the country as

a result of the pervasive effects of civil war and high population growth rates (including

immigrants and refugees). In addition, the Djiboutian government faces major economic

difficulties, having fallen into arrears on long-term external debt repayments and struggles

to meet the demands of foreign aid donors. These factors may serve to constrain future

economic growth.

Trade

Exports and Imports 2007 2008

Total exports - -

Export growth rate - 6,1%

Total imports - -

Import growth rate - 10,9%

168
International Trade
Djibouti’s major export partner is Somalia (79,9%). Much of the trade between Djibouti

and its neighbouring countries is informal. Other export partners include the UAE (4%)

and Yemen (4,1%). The country’s export sector is primarily focused on re-exports, hides,

skins and coffee.

Djibouti is highly dependent on imports and its import partners vary considerably. Most

imports come from Saudi Arabia and India, with each country accounting for 20,5% of

total imports. Other import partners include China (10,6%), the USA (6%) and Malaysia

(6%).

Trade with South Africa

(Rands ‘000) 2007 2008 2009

Total exports 37 184 115 157 70 861

Total imports 1 007 667 217

Trade balance 36 177 114 490 70 644

Bilateral Agreements with South Africa

• None

Barriers to Trade
The prohibition of certain imports, variable and sometimes high import taxes and fees,

import licensing requirements, and restrictions on access to markets in the services sector

are the main barriers to trade in Djibouti.

169
Business Climate
Infrastructure and Trade

Number of power outages in a typical month -

Average time to clear direct exports through customs (days) -

Average time to clear imports through customs (days) -

Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 163 Getting credit 177

Starting a business 177 Protecting investors 178

Dealing with construction
102 Paying taxes 65
permits
Employing workers 151 Trading across borders 34

Registering property 140 Enforcing contracts 161

Closing a business 135

Business Travel, Culture, Risk and Investment

Djibouti’s international airport is served mainly by Air France and the national carrier, Air

Djibouti. Ethiopian Airlines offers the greatest number of one-stop flights between Djibouti

and Johannesburg.

French and Arabic are the main languages used when conducting business in the country.

Since Djibouti offers very few interpreter services, a knowledge of one of these languages

is essential when doing business.

Djibouti has a very uncertain political and economic outlook with the prevailing business

environment posing many troublesome weaknesses which could significantly impact on

corporate payment behaviour. For this reason corporate-default probability is very high.

170
Regulatory Policy Framework for Businesses
The government of Djibouti recognises the crucial need for foreign investment for the

economic development of the country. With this in mind the government has made

considerable efforts to create an environment conducive to private investment, both

domestic and foreign. During 2001 the National Investment Promotion Agency was

established to promote investment, facilitate operations and modernise the country’s

regulatory framework.

No formal laws exist that discourage foreign investment in the country and, in principle, no

screening of investment or other discriminatory measures are in place. Furthermore, no

performance requirements are in place as pre-conditions for establishing, expanding or

maintaining FDIs. Nevertheless, significant investment incentives are provided to private

individuals and corporate investors, and these incentives increase with the size of the

investment and its impact in terms of job creation. It is important to note, however, that

certain sectors, including public utilities, are state owned and are not currently open for

foreign investment.

A VAT system was introduced by the government in January 2009, and consists of a flat

rate of 7% imposed on companies with an annual turnover exceeding 80 million Djiboutian

Francs. Notably, where VAT is levied at 7%, other existing taxes on the same transaction

are reduced by 7%. Tax reforms have been implemented in the construction and

transportation sectors as well as the textile industry with a view to promoting the growth

of these sectors, and these reforms include reductions of taxes levied on automobile

spare parts and recording or image producing electronic devices, electrical, plumbing or

sanitary material, heavy construction vehicles and raw cloth.

As a member of the MIGA, which protects investors against commercial risk, Djibouti’s

Investment Code stipulates that “no partial or total, temporary or permanent expropriation

will take place without equitable compensation for the damages suffered”.

171
Djibouti’s financial regulatory system is characterised by free interest rates and no limits

on foreign share ownership. In addition, the country has no foreign exchange restrictions

and there are no existing limitations on converting or transferring funds.

Opportunities for South African Businesses

Some investment opportunities in Djibouti stem from the country’s primary port, the

Doraleh fuel pier, and the US$400 million Doraleh container terminal which began

operations in December 2008. In addition, the country’s growing tourism industry has

been boosted by the construction and recent expansion of a large resort hotel complex

managed by Kempinski Hotel Group which opened in October 2006 and which is likely to

have positive spill-over effects for the country’s tourism industry.

The manufacturing, fishing and infrastructure development sectors should also interest

investors as Djibouti continues to actively seek out the help of the international private

sector to develop the country’s infrastructure and manufacturing capacity.

172
173
State of Eritrea
Geography and People

Location Eastern Africa, bordering the Red Sea, between Djibouti and Sudan

Area 117 600km2

Capital city Asmara

Other major
Massawa, Assab
cities

Hot, dry desert strip along Red Sea coast; cooler and wetter in the central
Climate highlands (heaviest rainfall from June – September); semi-arid in western
hills and lowlands

Natural
Gold, potash, zinc, copper, salt, possibly oil and natural gas, fish
resources

Key ports Ports of Assab and Massawa

Population 5 647 168 (2009 est.)

Population
2,577% (2009 est.)
growth rate

Life
61.78 years
expectancy

0 – 14 years: 42,8%
Age
15 – 64 years years: 53,7%
distribution
65 years and over: 3,6%

Languages Afar, Arabic, Tigre and Kunama, Tigrinya, other Cushitic languages

Tigrinya (50%), Tigre and Kunama (40%), Afar (4%), Saho (Red Sea
Ethnic groups
coast dwellers) (3%), other (3%)

Religions Muslim, Coptic Christian, Roman Catholic and Protestant

174
Economy
Current account (as % of GDP) -3,7%

Savings rate (% of GDP) 8,66% (2006)

Foreign direct investment flows -

Size of labour force -

Unemployment -

Currency Nafka (ERN)

2007 2008

Average exchange rate (versus US$) 15,5 15,38 (est.)

GDP US$1,32 billion US$1,48 billion

GDP growth rate 1,3% 1%

GDP Per capita (PPP) US$700 (est.) US$700 (est.)

GNI US$3,01 billion US$3,13 billion

GNI Per capita (PPP) US$620 US$630

Inflation rate (consumer prices) 17% (est.) 18% (est.)

Growth and Structure of the Economy

The economy in Eritrea is fundamentally a command economy, with government activities

crowding out much potential private-sector investment. Agriculture currently contributes

17,4% of GDP and many people in the country remain almost exclusively dependent on

subsistence farming. Industry and services contribute 23,2% and 59,4% to national GDP,

respectively. Eritrea’s primary industries include food processing, beverages, clothing and

textiles, light manufacturing, salt and cement.

175
The Ethiopian-Eritrean War, which raged from 1998 to 2000, has had a fundamental

impact on the growth and development of the Eritrean economy. In the midst of the war

years, GDP growth fell back to zero in 1999, and, thereafter, the economy contracted

by 12,1% in 2000. In May 2000, during the Ethiopian offensive into northern Eritrea, the

country suffered US$600 million in property losses including livestock losses totalling

US$225 million in value and damage to 55 000 homes. In addition, the offensive prevented

the planting of crops in Eritrea’s most productive region, resulting in a sharp decline of

62% in domestic food production.

Despite the pervasive effects of the war, efforts to develop transportation infrastructure

and the quality of the road network, improve imports and repair war-damaged roads and

bridges have continued. Since the conclusion of the war, the government has paid close

attention to improving the economic fundamentals in the country with a view to facilitating

economic growth. One key strategy in this area has been the expansion of the use of

military- and party-owned businesses to drive Eritrea’s development agenda.

Trade

Exports and Imports 2007 2008

Total exports US$12 million (est.) US$13 million (est.)

Export growth rate - -

Total imports US$ 580 million (est.) US$ 601 million (est.)

Import growth rate - -

International Trade
Eritrea currently runs a large trade deficit, primarily due to the underdeveloped nature of

the economy. The country’s main export products are livestock, sorghum, textiles, food

176
and small manufacturers. Its chief export partners are Italy (25,3%), Sudan (17,2%),

China (15,8%), India (8,8%), France (6,7%), Saudi Arabia (6,5%) and Russia (4,1%).

Eritrea’s major import commodities are machinery, petroleum products, food and

manufactured goods. The country’s main import partners are India (28,5%), Saudi Arabia

(17,8%), Italy (10,9%), China (8,5%), the USA (4,4%) and Germany (4%).

Trade with South Africa

(Rands ‘000) 2007 2008 2009

Total exports 25 547 31 951 30 357

Total imports 473 654 1 330

Trade balance 25 073 31 297 29 028

Bilateral Agreements with South Africa

• None

Barriers to Trade
Eritrea has made significant progress in liberalising its trade regime since independence

in 1993. However, the government maintains trade and exchange restrictions to contain

external imbalances stemming from fiscal deficits. The exchange and payments system

is tightly controlled; and permits are required for all private imports. Furthermore, private

households and businesses often face difficulties accessing foreign currency and licences

for imports.

177
Business Climate
Infrastructure and Trade

Number of power outages in a typical month 2,97 (2009)

Average time to clear direct exports through customs (days) 9,59 (2009)

Average time to clear imports through customs (days) 20,12 (2009)

Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 175 Getting credit 177

Starting a business 181 Protecting investors 109

Dealing with construction
183 Paying taxes 110
permits
Employing workers 86 Trading across borders 164

Registering property 171 Enforcing contracts 48

Closing a business 183

Business Travel, Culture, Risk and Investment

Flights are available from Cape Town and Johannesburg with South African Airways,

Egypt Air, Emirates and Turkish Airlines to Eritrea. South African passport holders require

a visa to travel to Eritrea.

Local business people tend to speak English and Italian. Knowledge of French can also

be useful.

Eritrea has very low levels of corruption and is considered a high-trust society. However,

political turmoil and a lack of transparency in decision-making processes pose the biggest

investment risks to potential investors in the country.

178
Regulatory Policy Framework for Businesses
Eritrea’s investment policies and regulatory framework are strongly market oriented.

However, an underdeveloped regulatory policy framework poses significant challenges

to businesses and investors in the country. Specifically, there is a lack of transparency

in regulatory processes, stringent limits are in place on the possession and exchange

of foreign currency, there is a lack of objective dispute settlement mechanisms for

commercial disputes, and businesses frequently face difficulties in obtaining licences.

Investment laws in Eritrea date back to 1991 when the government sought to expedite

economic growth in the country in the face of looming independence. During 1991 the

Investment Proclamation Number 18 was established and encourages both nationals

and foreigners to invest in the country. The Eritrean Investment Centre used this law as a

basis for approving investment projects. Notably, however, the Foreign Financed Special

Investments Proclamation limits foreign investment in the financial services, domestic

wholesale trade and retail trade and commission agencies sectors. Furthermore, despite

the Investment Proclamation containing assurances against expropriation, the Eritrean

government has nationalised several foreign-owned businesses and expropriated other

assets in the past.

Investment Proclamation Number 59/1994 grounds the regulatory framework for private

sector investment within the country’s macro-economic policy objectives. It states that

Eritrea has adopted an open and market-oriented economic policy, assigning the private

sector a leading role in the economic activities of the country. The Proclamation allows

private investment to function with no restrictions or discrimination in order to promote,

encourage, safeguard, and protect investments by the private sector. In practice, investors

required approval from the Ministry of Trade and Industry prior to investing in a specific

project, and additional unpublicised approval requirements are also common. For all

large-scale projects, prior approval is required from the Office of the President.

179
Unrestricted investment and repatriation of foreign currency is permitted under

Proclamation 115 issued in August 2001. The Bank of Eritrea is responsible for all foreign

exchange, and no other entity is permitted to transfer funds either into or out of the country.

Opportunities for South African Businesses

Following the end of the Ethiopia-Eritrea War, the process of reconstructing Eritrea’s

infrastructure has expanded into a massive undertaking, creating significant opportunities

in the country’s construction sector.

The other major prospects for investment in the country are centred on the development

of offshore oil, offshore fishing and tourism. In addition, Eritrea’s location at the highest

landmass of the African continent creates favourable climate conditions which make the

country suitable for a range of agricultural pursuits.

180
181
Federal Democratic
Republic of Ethiopia
Geography and People

Location Eastern Africa, west of Somalia

Area 1 104 300km2

Capital city Addis Ababa

Other major
Nazret, Dire Dawa, Gonder, Bahir Dar, Awasa, Jima, Dese
cities

Climate Tropical monsoon with wide topographic-induced variation

Natural
Small reserves of gold, platinum, copper, potash, natural gas, hydropower
resources

Key ports Ethiopia is land locked

Population 85 237 338 (2009 est.)

Population
3,208% (2009 est.)
growth rate
Life
55,41 years
expectancy

0 – 14 years: 46,1%
Age
15 – 64 years years: 51,2%
distribution
65 years and over: 2,7%

Amarigna (32,7%), Oromigna (31,6%), Tigrigna (6,1%), Somaligna (6%),

Languages Guaragigna (3,5%), Sidamigna (3,5%), Hadiyigna (1,7%), other (14,8%),
English (major foreign language taught in schools

Oromo (32,1%), Amara (30,1%), Tigraway (6,2%), Somalie (5,9%),

Ethnic groups
Guragie (4,3%), Sidama (3,5%), Welaita (2,4%), other (15,4%)

Christian (60,8%) (Orthodox 50,6%, Protestant 10,2%), Muslim (32,8%),

Religions
traditional (4,6%), other (1,8%)

182
Economy
Current account (as % of GDP) -5,6%

Savings rate (% of GDP) 9,37%

Foreign direct investment flows US$93 million

Size of labour force 37,9 million

Unemployment -

Currency Ethiopian birr (ETB)

2007 2008

Average exchange rate (versus US$) 8,96 9,57

GDP US$19,54 billion US$26,39 billion

GDP growth rate 11,5% 11,6%

GDP Per capita (PPP) US$800 US$900

GNI US$61,65 billion US$70,16 billion

GNI Per capita (PPP) US$780 US$870

Inflation rate (consumer prices) 17,2% (est.) 44,4% (est.)

Growth and Structure of the Economy

Ethiopia’s poverty-stricken economy is based on agriculture, accounting for almost half of

GDP, 60% of exports and 80% of total employment. Agricultural activity in the country is

primarily focused on crop production, farming and animal husbandry; with smaller forestry

and fishing sub-sectors. Despite the importance of the agricultural sector, its growth and

development is constrained by frequent droughts and poor cultivation practices. Coffee

is critical to the Ethiopian economy with the value of the country’s coffee exports totalling

US$350 million in 2006. However, historically low prices for coffee have prompted many

farmers to switch to other crops to supplement their income.

183
Ethiopian industry depends largely on food processing, beverages production, textiles,

leather, chemicals, metals processing and cement. Currently, non-agricultural output

is growing significantly faster in comparison to the agricultural sectors, and industrial

production registered a growth rate of 10,4% in 2008. The expansion of the industrial

sector has been driven primarily by growth in electricity and water supply together with

construction.

The war between Ethiopia and Eritrea spanning from 1998 to 2000, together with recurrent

drought, have severely constrained growth in the Ethiopian economy, particularly with

respect to coffee production. Under Ethiopia’s Constitution, the state owns all land and

provides long-term leases to tenants. This system continues to hamper growth in the

industrial sector, as entrepreneurs are unable to utilise land as collateral for loans.

Trade

Exports and Imports 2007 2008

Total exports US$1,285 billion US$1,555 billion

Export growth rate - -

Total imports US$5,156 billion US$7,206 billion

Import growth rate - 23,1%

International Trade
Ethiopia’s major exports are coffee, qat, gold, leather products, live animals and oilseeds.

The country’s major export partners are Germany (11,8%), Saudi Arabia (8,7%), the

Netherlands (8,6%), the USA (8,1%), Switzerland (7,7%), Italy (6,1%), China (6%), Sudan

(5,5%) and Japan (4,4%).

184
Ethiopia’s main imports are food and live animals, petroleum and petroleum products,

chemicals, machinery, motor vehicles, cereals and textiles. The country’s chief import

partners are China (16,3%), Saudi Arabia (12%), India (8,7%), Italy (6%), Japan (4,9%)

and the USA (4,5%).

Trade with South Africa

(Rands ‘000) 2006 2007 2008

Total exports 162 812 233 206 248 266

Total imports 9 272 24 262 31 888

Trade balance 153 540 208 944 216 378

Bilateral Agreements with South Africa

• Agreement on the Prevention of Fiscal Evasion with respect to Taxes on Income
(2004);
• Treaty for the Avoidance of Double Taxation Agreement (2006);
• Reciprocal Protection and Promotion of Investment Agreement (2008) (signed but not
yet ratified); and
• Memorandum of Understanding on Economic Co-operation (2008) (signed but not yet
tabled in Parliament).

Barriers to Trade
There are no free-trade zones in Ethiopia and the strict foreign exchange-control-regime

administered by the National Bank is still a deterrent to imports. Other non-tariff barriers

include import licences and burdensome regulations and bureaucracy. In addition to these

barriers, the Ethiopian Central Bank operates a strict foreign currency-control regime that

has made it increasingly difficult for importers to obtain foreign exchange, particularly

those importing goods or inputs for sale in the domestic market.

185
Business Climate
Infrastructure and Trade

Number of power outages in a typical month 5,08 (2006)

Average time to clear direct exports through customs (days) 4,30 (2006)

Average time to clear imports through customs (days) 14,06 (2006)

Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 107 Getting credit 127

Starting a business 93 Protecting investors 119

Dealing with construction

60 Paying taxes 42
permits

Employing workers 98 Trading across borders 159

Registering property 110 Enforcing contracts 57

Closing a business 77

Business Travel, Culture, Risk and Investment

South African Airways offers direct flights to Ethiopia from South Africa via Johannesburg’s

OR Tambo International Airport. Other airlines flying to Ethiopia are British Airways, Kenya

Airways, Tanzania Air, Virgin Atlantic and Ethiopian Airlines. South African business

people travelling to Ethiopia are required to obtain a visa prior to travelling to the country.

Relationships are extremely important in Ethiopia. All meetings start with extended social

pleasantries. Meetings seldom have a scheduled ending time since it is considered more

important to complete the meeting satisfactorily than be slavishly tied to the clock.

186
Regulatory Policy Framework for Businesses
The 1995 Constitution of the Federal Democratic Republic of Ethiopia, which is the

supreme law of the country, recognises the right of individuals to acquire and own property.

The Constitution also provides for protection against the expropriation and nationalisation

of investments in the country. In the case of expropriation or nationalisation dictated

by the public interest, the Constitution and the Ethiopian Investment Law guarantee

that adequate compensation, corresponding to the prevailing market value, be paid in

advance.

Ethiopia is a member and signatory of several international agreements for the protection

of foreign investments and the settlement of investment disputes arising between the

government and investors. These include the Convention on the Settlement of Investment

Disputes between States and Nationals of other States (ICSID) and the World Intellectual

Property Organisation (WIPO).

All the transactions in foreign exchange must be carried out through authorised dealers

under the control of the National Bank. Payments abroad for imports require exchange

licences that are obtainable upon presentation of a valid importer’s licence. Foreign

exchange licences are granted in any convertible currency requested.

Payments and transfers for international transactions are subject to four restrictions: a tax

certifications requirement for the repatriation of dividend and other investment income;

restrictions on the repayment of legal external loans and supplies and foreign partner

credits; rules governing the issuance of import permits by commercial banks; and a

requirement to provide a clearance certificate from the National Bank of Ethiopia in order

to obtain import permits.

187
Notably, a number of sectors remain closed to private investment, including electricity

generation and transmission through the national grid. Furthermore, investment in the

telecommunications services and defence industries is only permitted in partnership with

the Ethiopian government. Foreign investment is not permitted in the broadcasting, certain

air transport services and forwarding/shipping agency services industries, as well as in a

wide range of small retail and wholesale enterprises, with these industries reserved for

Ethiopian nationals.

Private ownership of land is not permitted, and all land in Ethiopia is owned by the state.

Nevertheless, land may be leased from local or regional authorities for a maximum

period of 99 years. In practice, land is readily made available to foreign investors in the

manufacturing and agriculture sectors.

Opportunities for South African Businesses

Investment opportunities in Ethiopia are concentrated in four main sectors. In the

agricultural sector, significant opportunities exist in the production of food for the country’s

impoverished population. The country is blessed with an abundance of arable land – out

of the Ethiopia’s total land area of 114 million hectares about 45% is suitable for the

production of annual and perennial crops.

Ethiopia is rich in mineral resources of which gold, tantalum, soda ash, potash, nickel and

platinum are the most likely candidates for exploitation by either local or foreign investors.

188
Although Ethiopia’s manufacturing sector only makes a small contribution to GDP,

potentially influential industries in terms of their gross value of production include food

processing, beverages and tobacco.

The tourism industry has suffered tremendously as a result of the country’s long-running

civil war, as well as persistent droughts and famine. As a result, the total number of

international tourist arrivals in Ethiopia, although growing, is by no means commensurate

with the country’s potential as a tourist attraction, suggesting that significant opportunities

exist to revive the country’s tourism industry.

189
Republic of
Kenya
Geography and People

Eastern Africa, bordering the Indian Ocean, between Somalia and

Location
Tanzania

Area 580 367km2

Capital city Nairobi

Other major
Mombasa, Nakuru, Eldoret, Kisumu, Malindi, Garissa
cities

Climate Varies from tropical along coast to arid in the interior

Natural Limestone, soda ash, salt, gemstones, fluorspar, zinc, diatomite, gypsum,
resources wildlife, hydropower

Key ports Ports of Lamu, Malindi and Mombasa

Population 39 002 772 (2009 est.)

Population
2,691% (2009 est)
growth rate
Life
57,86 years
expectancy
0 – 14 years: 42,3%
Age
15 – 64 years years: 55,1%
distribution
65 years and over: 2,6%

Languages English (official), Kiswahili (official), numerous indigenous languages

Kikuyu (22%), Luhya (14%), Luo (13%), Kalenjin (12%), Kamba (11%),
Ethnic groups Kisii (6%), Meru (6%), other African (15%), Asian, European, Arab
(combined 1%)

Religions Protestant (45%), Roman Catholic (33%), Muslim (10%),

Religions
indigenous beliefs (10%), other (2%)

190
Economy
Current account (as % of GDP) - 8,1%

Savings rate (% of GDP) 12,55% (2006)

Foreign direct investment flows US$96 million

Size of labour force 17,37 million (2007 est.)

Unemployment 40% (2008 est.)

Currency Kenyan Shilling (KES)

2007 2008

Average exchange rate (versus US$) 68,309 68,358

GDP 27,1% 29,56%

GDP growth rate 7,1% 1,7%

GDP Per capita (PPP) US$1 600 (est.) US$1 600 (est.)

GNI US$58,11 billion US$60,88 billion

GNI Per capita (PPP) US$1 550 US$1 580

Inflation rate (consumer prices) 9,7% (est.) 26,2% (est.)

Growth and Structure of the Economy

Kenya is the transportation, communication, and financial hub of East Africa. Consequently,

the services sector represents the major contributor to national GDP, accounting for

62,3% of GDP. Agriculture also represents an important sector, accounting for close

to 24% of national GDP and employing the majority of the Kenyan labour force. The

country’s primary agricultural products include tea, coffee, corn, wheat, sugarcane, fruit,

vegetables, meat (beef, port and poultry) and dairy products. Industry is comparatively

less prominent, contributing 16,3% of GDP. Much of the industrial activity in Kenya is

focused on the production of small-scale consumer goods (including plastic, clothing and

textiles, furniture and soap), agro-processing, oil refining and the aluminium, steel and

lead industries.

191
Economic growth, hindered for decades by government mismanagement, counterproduc-

tive economic policies, and corruption, was improving steadily prior to the onset of recent

political instability following the 2007 elections. Despite this, Kenya’s manufacturing, elec-

tricity and water, wholesale and retail trade and fishing sectors all enjoyed positive growth

in 2008. Sustained growth has also been achieved in the construction sector, under-

pinned by a number of long-term construction activities as well as mining and quarrying

activities, which have benefited from rising demand for construction material.

Trade

Exports and Imports 2007 2008

Total exports US$4,123 billion (est.) US$5,04 billion (est.)

Export growth rate - -2,0%

Total imports US$8,381 billion (est.) US$10,69 billion (est.)

Import growth rate - 5,3%

International Trade
Kenya’s main exports are tea, horticultural products, coffee, petroleum products, fish

and cement. The country’s dominant export partners are the United Kingdom (10%), the

Netherlands (9,2%), Uganda (9%), Tanzania (8,7%), the USA (6,3%) and Pakistan (5,6%).

In turn, Kenya’s main imports are machinery and transportation equipment, petroleum

products, motor vehicles, iron and steel, resins and plastics. Its major import partners are

India (14,1%), the UAE (11,5%), China (10%), Saudi Arabia (8%), South Africa (5,7%)
and Japan (5,1%).

192
Trade with South Africa

(Rands ‘000) 2005 2006 2007

Total exports 25 547 31 951 30 357

Total imports 473 654 1 330

Trade balance 25 073 31 297 29 028

Bilateral Agreements with South Africa

• Bilateral Trade Agreement (2008); and
• Memorandum of Understanding on Economic Co-operation (2008).

Barriers to Trade
High import barriers, coupled with Kenya’s VAT regulations, constitute significant barriers
to trade in Kenya, particularly in the agricultural sector. The country’s import regulations
on agricultural products are sometimes altered due to domestic demand and supply
fluctuations, and political factors.

Kenya applies the EAC Customs Union Common External Tariff, which consists of three
tariff bands on imported goods: zero duty for raw materials and inputs; 10% for processed
or manufactured inputs; and 25% for finished products. Sensitive items, including milk and
milk products, corn, popcorn, rice, sugar and wheat are subject to tariff rates greater than
25%. Import controls are applied to selected food products, electronics and medicines.

Imports of seed corn are also carefully controlled.

Business Climate
Infrastructure and Trade

Number of power outages in a typical month 7,28 (2007)

Average time to clear direct exports through customs (days) 5,59 (2007)

Average time to clear imports through customs (days) 11,96 (2007)

193
Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

4
Doing business 95 Getting credit
(2007)
93
Starting a business 124 Protecting investors
(2007)
Dealing with construction 164
34 Paying taxes
permits (2007)
147
Employing workers 78 Trading across borders
(2007
126
Registering property 125 Enforcing contracts
(2007)

Closing a business 79

Business Travel, Culture, Risk and Investment

Kenya has three international airports. When flying from South Africa, it is best to fly to the

Jomo Kenyatta International Airport in Nairobi, which is located approximately 20 minutes

from the city’s main business district. South African passport holders do not require visa

for stays not exceeding 30 days.

When conducting business engagements in Kenya, business cards should be presented

and received with both hands. When being introduced to someone for the first time, a

short handshake is recommended, while handshakes among people that have already

established a personal relationship are typically longer. When addressing individuals,

the use of titles is important. Specifically, honorific titles should be used as well as the

individual’s surname and any academic or professional title (where applicable).

Despite reforms that started in the early 1990s, issues of governance, labour unrest, poor

infrastructure, bureaucracy and red tape, together with a lack of corporate governance

codes, frequent, power shortages and high utility costs have adversely affected investor’s

confidence in doing business in Kenya.

194
Regulatory Policy Framework for Businesses
Prior to 2004, Kenya boasted one of the most liberal FDI regimes in SSA. However, entry

requirements for FDI have been more stringent following the introduction of the Investment

Promotions Act in 2004. The Act introduced a mandatory investment threshold and a

restrictive screening procedure for all foreign investments. In addition, the Act makes

a formal distinction between domestic and foreign investors and requires that the latter

apply to the Kenya Investment Authority (KIA) for an investment certificate. The KIA is only

allowed to issue investment certificates to foreign investors under very strict conditions.

All operators in domestic or international trade in Kenya must be registered with the

Attorney General’s Chambers and licenced by the Ministry of Trade under the 1968

Trade Licensing Act. In terms of this Act, while trading activities are open to both Kenyans

and foreigners, foreigners are not allowed to conduct business in certain places or with

specified goods. Licensing fees vary with the type of the business and its location.

Work permits, which are often difficult to obtain, are a requirement for all foreign nationals

that wish to work in the country. Foreign ownership of companies listed on the Nairobi

Stock Exchange is limited to 75% and foreign brokerage and fund management firms

must have minimum Kenyan ownership of 30% and 51%, respectively.

A minimum investment threshold of US$100 000 is required for foreign investments.

Foreign investors are also expected to fill senior management positions or possess

specialised skills that are not available locally. In addition, foreign investors are required to

sign an agreement with the government that articulates training arrangements designed

to phase out the employment of expatriates in favour of local employees.

195
All resident companies in Kenya are subject to income tax of 30%. The incomes of

branches of non-resident companies are taxed at a higher rate of 37,5%. In addition, VAT

is levied on goods imported into or manufactured in Kenya at a standard rate of 16%.

Foreign investors are permitted to repatriate capital, and the remittance of dividends and

interest is guaranteed to foreign investors under the Foreign Investment Protection Act.

Furthermore, there are no existing restrictions on the conversion or transfer of funds

associated with investments in Kenya.

Opportunities for South African Businesses

The potential for investment in Kenya is enhanced by the country’s pro-investment policies,

a large pool of skilled workers, a strategic location as a regional financial communications

and transportation hub, access to good infrastructure and a liberalised economy with

easy market access.

At present, the sectors with the most potential for investment include agriculture; tourism;

building and construction; infrastructure; energy; manufacturing; environment and natural

resources; banking and finance; and ICT.

196
197
Republic of
Rwanda
Geography and People

Location Central Africa, east of Democratic Republic of the Congo

Area 26 338km2

Capital city Kigali

Other major
Butare, Gisenyi, Kibungo, Ruhengeri
cities

Temperate; two rainy seasons (February to April, November to January);

Climate
mild in mountains with frost and snow possible

Natural Gold, cassiterite (tin ore), wolframite (tungsten ore), methane,

resources hydropower, arable land

Key ports Rwanda is landlocked

Population 10 473 282 (2009 est.)

Population
2,782% (2009 est.)
growth rate
Life
50,52 years
expectancy
0 – 14 years: 42,1%
Age
15 – 64 years years: 55,4%
distribution
65 years and over: 2,4%

Kinyarwanda (official) universal Bantu vernacular, French (official),

Languages
English (official), Kiswahili (Swahili) used in commercial centres

Ethnic groups Hutu (Bantu) (84%), Tutsi (Hamitic) (15%), Twa (Pygmy) (1%)

Roman Catholic (56.5%), Protestant (26%), Adventist (11,1%), Muslim

Religions
(4.6%), indigenous beliefs (0,1%), none (1,7%)

198
Economy
Current account (as % of GDP) -6,8%

Savings rate (% of GDP) 13,76%

Foreign direct investment flows US$103 million

Size of labour force 4,446 million (2007)

Unemployment -

Currency Rwandan Franc (RWF)

2007 2008

Average exchange rate (versus US$) 585 550 (est.)

GDP US$3,41 billion US$4,46 billion

GDP growth rate 7,9% 11,2%

GDP Per capita (PPP) US$900 (est.) US$900 (est.)

GNI US$8,70 billion US$9,85 billion

GNI Per capita (PPP) US$920 US$1 010

Inflation rate (consumer prices) 9,1% (est.) 15,4% (est.)

Growth and Structure of the Economy

Rwanda is a landlocked country with very limited natural resources. About 90% of the

country’s population is engaged in subsistence agriculture. The agricultural sector accounts

for 38% of national GDP, with growth in the sector driven by the production of food crops

and cereals production. Other important agricultural crops include cassava, Irish potatoes
and tea. However, discrepancies between population growth and food production continue

to necessitate food imports. Manufacturing accounts for approximately 6% of GDP, while

overall industrial activity contributes 15% to national GDP.

199
Despite high levels of poverty, the country has made significant progress in stabilising and

rehabilitating its economy to pre-1994 genocide levels. The country has managed to curb

inflation and national GDP has stabilised. Industrial production has exhibited relatively

strong growth in Rwanda in recent years, and is centred on the construction sub-sector

as well as large public-sector investment projects and private-sector investments in hotels

and private housing.

The country receives substantial aid money and is heavily dependent on aid flows, with

50% of the national budget financed through ODA. The country obtained debt relief under

the IMF-World Bank Heavily Indebted Poor Countries (HIPC) initiative in 2005 – 06 and also

obtained the Millennium Challenge Account Threshold status in 2006. The government has

embraced an expansionary fiscal policy to reduce poverty through improving education,

infrastructure, and foreign and domestic investment and pursuing market-oriented

reforms. However, these efforts continue to be threatened by energy shortages, instability

in neighbouring states, and a lack of adequate transportation linkages to other countries.

Trade
Exports and Imports 2007 2008

Total exports US$184 million (est.) US$210 million (est.)

Export growth rate - 2,3%

Total imports US$637 million (est.) US$834 million (est.)

Import growth rate - 14,0%

International Trade
Rwanda’s key export partners include China (9,1%), Thailand (8,6%), Germany (7,3%),

the USA (4,5%) and Belgium (4,1%). The country mainly exports coffee, tea, hides and tin

ore. In turn, Rwanda’s chief import partners are Kenya (15,2%), Uganda (13,3%), China

200
(6,3%), Belgium (5,3%) and Germany (4,5%). Its main imports are foodstuffs, machinery

and equipment, steel petroleum products, cement and construction materials.

Trade with South Africa

(Rands ‘000) 2005 2006 2007

Total exports 70 156 87 256 108 312

Total imports 6 4245 4 072 546

Trade balance 63 731 83 184 107 766

Bilateral Agreements with South Africa

• Agreement and Protocol for the Reciprocal Promotion and Protection of Investments

(2000) (signed but not yet ratified by Rwanda);

• Agreement for the Establishment of a Joint Commission of Co-operation (2000);

• Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion

with respect to Taxes on Income (2002);

• Memorandum of Understanding on Economic Co-operation (2006) (signed but not yet

tabled in Parliament); and

• Bilateral Trade Agreement (2000).

Barriers to Trade
In 2008, Rwanda’s weighted-average tariff rate was 11,3%. Certain prohibitive tariffs,

import restrictions, import taxes and import and export licensing requirements are in

place. For instance, authorisation is required for the import of explosives and arms. The

import of some products also requires the approval of the Ministry of Health while the

import of asbestos and asbestos products is prohibited.

201
Frequent police checks, roadblocks and numerous weighbridges represent key non-tariff

barriers in Rwanda, along with complex and inefficient customs procedures that add to

the cost of trade.

Business Climate

Infrastructure and Trade

Number of power outages in a typical month 13,68 (2006)

Average time to clear direct exports through customs (days) 6,67 (2006)

Average time to clear imports through customs (days) 12,73 (2006)

Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 67 Getting credit 61

Starting a business 11 Protecting investors 27

Dealing with construction

89 Paying taxes 59
permits

Employing workers 30 Trading across borders 170

Registering property 38 Enforcing contracts 40

Closing a business 183

Business Travel, Culture, Risk and Investment

RwandAir flies directly between South Africa and Kigali. Airlines such as Kenya Airways,

and Ethiopian Airlines offer flights to Rwanda from South Africa, with one connection via

either Nairobi or Addis Abba. South African passport holders do not require a visa to enter

Rwanda.

202
The main language for doing business in Rwanda is French and very few executives

speak English. Appointments are necessary for doing business in the country.

Regulatory Policy Framework for Businesses

Rwanda has adopted several initiatives to facilitate foreign investment including the

establishment of the Rwanda Development Board (RDB) in 2008. There are no existing

statutory limits on foreign ownership or control in Rwanda, and there is no mandatory

screening of foreign investments. However, the RDB does evaluate the business plans

of investors seeking tax incentives in order to record incoming foreign investment and to

better allocate investment incentives better to qualified foreign investors. The Investment

Law of 2006 assists investors in obtaining the necessary licences, visas, work permits,

and tax incentives. The law provides permanent residence and access to land for investors

who deposit US$500 000 in a commercial bank in Rwanda for a period of not less than six

months. This law also fixes the minimum initial capital investment requirement for foreign

investors at US$250 000 to qualify for tax and other investment incentives.

In 1995, the government of Rwanda established a market-determined exchange rate

system under which all lending and deposit interest rates were liberalised. The Central

Bank holds daily foreign exchange sales which are freely accessed by commercial banks.

Investors can remit payments only through authorised commercial banks. There is no

limit on the inflow of funds, but the Central Bank requires justification for all transfers over

US$20 000 to guard against potential money laundering. Additionally, there are some

restrictions on the outflow of export earnings. SWIFT financial services and other financial

services companies such as Western Union and MoneyGram are available to investors

seeking to transfer funds.

203
Since January 2007, the Rwandan Franc has been convertible for all business transactions.

Rwanda has a liberal monetary system and complies with IMF Article VIII and all OECD

convertibility requirements.

Taxes are moderately high in Rwanda, with the top income tax rate set at 35% and the top

corporate tax rate at 30%. A VAT and a property transfer tax are also in operation.

Opportunities for South African Businesses

Rwanda is viewed as the gateway to East Africa and currently presents many opportunities

for potential investment. In particular, attractive investment opportunities exist in the

tourism, agro-processing, energy, infrastructure, ICT, real estate and construction,

financial services and mining sectors.

204
205
Somalia
Geography and People

Eastern Africa, bordering the Gulf of Aden and the Indian Ocean, east of
Location
Ethiopia

Area 637 657km2

Capital city Mogadishu

Other major
Berbera, Hargeysa (Hargeisa), Kismaayo, Marka
cities

Principally desert; north-east monsoon (December to February),

moderate temperatures in north and hot in south; south-west monsoon
Climate
(May to October), torrid in the north and hot in the south, irregular rainfall,
hot and humid periods (tangambili) between monsoons

Natural Uranium and largely unexploited reserves of iron ore, tin, gypsum,
resources bauxite, copper, salt, natural gas, likely oil reserves

Key ports Ports of Berbera and Kismaayo

Population 9 832 017 (2009 est.)

Population
2,815% (2009 est.)
growth rate
Life
49.63 years
expectancy
0 – 14 years: 45%
Age
15 – 64 years years: 52.6%
distribution
65 years and over: 2,5%

Languages Somali (official), Arabic, Italian, English

Somali (85%), Bantu and other non-Somali (including Arabs 30 000)

Ethnic groups
(15%)

Religions Sunni Muslim

206
Economy
Current account (as % of GDP) -

Savings rate (% of GDP) -

Foreign direct investment flows US$87 million

Size of labour force 3,447 million (2007)

Unemployment 66%

Currency Somali Shilling (SOS)

2007 2008

Average exchange rate (versus US$) - -

GDP - -

GDP growth rate - -

GDP Per capita (PPP) US$600 (est.) US$600 (est.)

GNI - -

GNI Per capita (PPP) - -

Inflation rate (consumer prices) - -

Growth and Structure of the Economy

Somalia’s economy is severely affected by the political divisions in the country. The

north-western area has declared its independence as the Republic of Somaliland. The

north-eastern region of Puntland is a semi-autonomous state; and the remaining southern

portion is riddled with conflict between rival factions.

Economic life continues, in part because much activity is localised and relatively easily

protected. Agriculture is the most important sector, with livestock accounting for about

65% of GDP. However, Saudi Arabia’s ban on Somali livestock, due to Rift Valley Fever

207
concerns, has severely hampered the sector. Despite the political turmoil, Somalia’s

service sector has managed to survive and grow. Telecommunication firms provide

wireless services in most major cities and offer the lowest international call rates on the

continent.

Hotels continue to operate, and militias provide security. The ongoing civil disturbances

and clan rivalries, however, have interfered with any broad-based economic development

and international aid arrangements. Due to the war, the size of the economy and the pace

at which it is growing is largely unknown.

Trade
Exports and Imports 2007 2008

Total exports - -

Export growth rate - -

Total imports - -

Import growth rate - -

International Trade
Livestock, bananas, hides, fish, charcoal and scrap metal are Somalia’s principal exports.

Somalia’s main export partners are the UAE (56,2%), Yemen (21%) and Saudi Arabia

(3,6%).

Somalia imports mainly manufactured goods, petroleum products, foodstuffs and

construction materials. These come primarily from Djibouti (29,2%), India (11,9%), Kenya

(7,6%), the USA (6%), Oman (5,6%), the UAE (5,5%) and Yemen (4,7%).

208
Trade with South Africa

(Rands ‘000) 2005 2006 2007

Total exports 4 837 3 140 7 449

Total imports 5 939 1 116 96
Trade balance -1 102 2 024 7 353

Bilateral Agreements with South Africa

• None

Barriers to Trade
The ongoing violence and political conflict in Somalia has placed significant constraints

on normal trade activities in the country.

Business Climate
Infrastructure and Trade

Number of power outages in a typical month -

Average time to clear direct exports through customs (days) -

Average time to clear imports through customs (days) -

Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business - Getting credit -

Starting a business - Protecting investors -

Dealing with construction

- Paying taxes -
permits

Employing workers - Trading across borders -

Registering property - Enforcing contracts -

Closing a business -

209
Business Travel, Culture, Risk and Investment
Mogadishu has two international airports, K50, which is currently in use, and Aden Adde

International Airport, which is not in use. Both of these are, however, subject to disruptions

because of ongoing fighting in the capital, and services seem to alternate between the

two, depending on the viability of each and the security situation at any given time. There

are two options to get in and out of Mogadishu by air. The first is Dubai-based Daallo

Airlines that operates a service two or three times a week from Djibouti using a Russian

Illyushin-18. The second is a service offered by locally (Somali) owned Jubba Airways from

Dubai and Jeddah, also using Illyushin aircraft. Somaliland is served by Egal International

Airport in Hargeisa where the same airlines fly to the same destinations, with the addition

of a service from Dire Dawa by Ethiopian Airlines.

For potential investors, translators/interpreters fluent in Maaymaay are essential for

Somali Bantu clients because Maaymaay is their primary language. Trust is a serious

issue because of the history of Somali violence against Somali Bantus. For this reason,

the use of Somali Bantu translators by potential investors is recommended.

There are some signs of investment emerging, for example, Coca-Cola opened a new

bottling plant in Mogadishu in 2003. However, the high-risk political and uncertain

economic situation make for a high-risk climate for investment and the corporate default

probability is extremely high in Somalia.

210
Regulatory Policy Framework for Businesses
Although the current political situation in Somalia is not favourable for foreign investment,

the Somalia International Financial Centre is officially developing a financial system that

will create a tax-free offshore international banking regime with strict confidentiality and

world-class regulatory standards. According to the Somali Investment Act (1991) any

juristic or physical person can be regarded as a foreign investor.

Alongside the Somali Investment Act, the International Banking Act (2003) plays an

integral part in stimulating foreign investment and places emphasis on the development

of the insurance sector of finance.

Opportunities for South African Businesses

Despite pervasive political instability and widespread uncertainty regarding governance

in Somalia, investors continue to show great interest in the country. Most of this interest

centres on the potential for Somalia to develop into ‘another Dubai’ on account of the

cheap living conditions and numerous business opportunities present in the country.

These business opportunities in Somalia primarily involve wireless communication, which

has become a major economic force in the country.

211
Republic of
Sudan
Geography and People

Location Northern Africa, bordering the Red Sea, between Egypt and Eritrea

Area 2 505 813km2

Capital city Khartoum

Other major
Juba, Omdurman
cities

Tropical in south; arid desert in north; rainy season varies by region (April
Climate
– November)

Natural Petroleum, iron ore, copper, chromium ore, zinc, tungsten, mica, silver,
resources gold, hydropower

Key ports Port of Sudan

Population 41 087 825 (2009 est.)

Population
2,143% (2009 est.)
growth rate
Life
51,42 years
expectancy
0 – 14 years: 40,7%
Age
15 – 64 years years: 56,8%
distribution
65 years and over: 2,5%

Arabic (official), English (official), Nubian, Ta Bedawie, diverse dialects of

Languages
Nilotic, Nilo-Hamitic, Sudanic languages

Ethnic groups Black (52%), Arab (39%), Beja (6%), other (3%)

Religions Sunni Muslim (70%), Christian (5%), indigenous beliefs (25%)

212
Economy
Current account (as % of GDP) -11,2%

Savings rate (% of GDP) 9,98%

Foreign direct investment flows US$2,6 billion

Size of labour force 11,92 million (2007 est.)

Unemployment 18,7% (2002 est.)

Currency Sudanese pound (SDG)

2007 2008

Average exchange rate (versus US$) 2,06 2,1 (est.)

GDP US$46,53 billion US$58,03 billion

GDP growth rate 10,2% 6,8%

GDP Per capita (PPP) US$2 100 (est.) US$2 200 (est.)

GNI US$72,52 billion US$79,81 billion

GNI Per capita (PPP) US$1 790 US$1 930

Inflation rate (consumer prices) 8% (est.) 14,3% (est.)

Growth and Structure of the Economy

Agriculture is a key sector in Sudan, contributing 31% of GDP and employing close to

80% of the labour force. However, despite the influence of the agricultural sector on the

Sudanese economy, most farms are susceptible to drought as a result of the low rainfall

percentage in the country. Other influential sectors in the Sudanese economy are industry

and services, contributing 34,7% and 34,3% to national GDP, respectively. Indeed, the

majority of new employment opportunities in the country are focused in the services

sector, particularly in the urban informal sector.

213
In 1999 Sudan began exporting oil as one of its main industries along with cotton

ginning, textiles, cement, edible oils, sugar, soap distilling, shoes, petroleum refining,

pharmaceuticals, armaments and the assembly of light trucks and automobiles. The

exporting of oil has enabled the country to run a trade surplus and has significantly

stabilised the exchange rate. High rates of economic growth, spearheaded by oil

production, have led to a sizable increase in Per capita incomes in Sudan, as well as

rising literacy rates and declining child mortality. Moreover, the Sudanese government’s

implementation of sound economic policies and infrastructure investments, based on

extensive public expenditure on roads, telecommunications and electricity, has boosted

the economy. However, Sudan still faces economic challenges related to low levels of Per

capita output.

Trade
Exports and Imports 2007 2008

Total exports US$8,879 billion (est.) US$11,67 billion (est.)

Export growth rate - 22,6%

Total imports US$7,722 billion (est.) US$8,229 billion (est.)

Import growth rate - 8,3%

International Trade
Aside from oil and petroleum exports, Sudan’s export of commodities such as cotton,

sesame, livestock, groundnuts, gum arabic and sugar have stagnated. Sudan’s main

export partners are China (49,8%), Japan (33,4%) and Indonesia (5,5%).

Foodstuffs, manufactured goods, refinery and transport equipment, medicines and

chemicals, textiles and wheat are the country’s major import commodities. Its major

import partners are China (20%), Saudi Arabia (8,4%), the UAE (6,2%), India (6,1%),

Egypt (5,5%) and Italy (4,1%)

214
Trade with South Africa

(Rands ‘000) 2007 2008 2009

Total exports 434 453 463 992 718 412

Total imports 632 2 571 6 970

Trade balance 433 821 461 421 711 442

Bilateral Agreements with South Africa

• Agreement for the Avoidance of Double Taxation and the prevention of Fiscal Evasion
with respect to Taxes on Income (2007);
• Reciprocal Protection and Promotion of Investment Agreement (signed but not yet
ratified);
• Bilateral Trade Agreement; and
• Memorandum of Understanding on Economic Co-operation (signed but not yet tabled
in Parliament).

Barriers to Trade
Sudan’s weighted average tariff rate was 11,4% in 2008. Trade barriers in the country

are substantially greater than most countries in SSA. However, barriers to trade in

Sudan have decreased since the implementation of trade reforms in the 1990s, which

included reduced tariffs, the abolishment of most export monopolies and the elimination

of exchange rate controls. Aside from the recognised tariff and non-tariff barriers, chronic

political instability in the country also represents a barrier to trade.

215
Business Climate
Infrastructure and Trade

Number of power outages in a typical month -

Average time to clear direct exports through customs (days) -

Average time to clear imports through customs (days) -

Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 154 Getting credit 135

Starting a business 118 Protecting investors 154

Dealing with construction

139 Paying taxes 93
permits

Employing workers 153 Trading across borders 142

Registering property 37 Enforcing contracts 146

Closing a business 183

Business Travel, Culture, Risk and Investment

There are numerous airlines flying to Khartoum from Johannesburg. South African

passport holders require a visa to enter Sudan.

English is widely spoken, although a greeting in Arabic is always appreciated when doing

business in Sudan. Punctuality is unimportant in Sudan and it is considered impolite to

be in a hurry. The Sudanese prefer doing business with people they know and trust,
so relationship building is recommended. Businesswomen travelling to Sudan should let

their contacts know in advance that they are female.

216
An economic reform plan was announced in 1989 and a three-year economic restructuring

programme was designed to reduce the public sector deficit, end subsidies, privatise

state enterprises, and encourage new foreign and domestic investment. Despite this, the

ongoing political instability in Sudan represents a risk to potential investment.

Regulatory Policy Framework for Businesses

The Ministry of Investment is charged with simplifying procedures and putting in place

the tools to protect investors’ rights in Sudan. It has implemented a ‘one-window-service’

system to remove bureaucratic barriers and shorten time periods and unify all channels

for investors.

The Investment Act provides guarantees and concessions for investors, and non-

differentiation between domestic and foreign investors with similar projects and capital.

Foreign investment is, however, restricted in certain sectors and, in all cases, foreign

investments require prior government approval.

All exporters and importers are required to register with the Ministry of Trade in Sudan.

Import licences are not required, except for goods imported through bilateral and

preferential trade arrangements.

All residents in Sudan may hold foreign exchange accounts, while non-residents

are permitted to hold foreign exchange accounts provided that they have received

government approval. Some restrictions and controls are applied to transactions involving

capital market securities, money market instruments, credit operations and outgoing FDI.

However, in general terms, supervision and regulations in the country’s financial sector

are weak.

Income tax rates in Sudan are low, with the top income tax rate set at 10%. In contrast,

corporate taxes are relatively high – the top corporate tax rate stands at 35%.

217
Opportunities for South African Businesses
Sudan is viewed as ‘the small continent’, due to the plethora of resources it has to offer

together with its vast size. Fertile agricultural land is readily available with reliable water

supplies, representing an attractive prospect for extensive agricultural growth in the

country.

Mineral resources are the backbone of the economy and have been part of the country’s

exports since 1999. These include petroleum and gold, and it is this sector that has

strongly attracted investment to the country. More investment opportunities exist in this

sector with notable opportunities in iron, mica, manganese, copper, silver, granite and

marble.

218
219
United Republic of
Tanzania
Geography and People

Eastern Africa, bordering the Indian Ocean, between Kenya and

Location
Mozambique

Area 947 300km2

Capital city Dar es Salaam

Other major
Arusha, Dodoma, Mwanza, Zanzibar
cities

Climate Varies from tropical along coast to temperate in highlands

Natural Hydropower, tin, phosphates, iron ore, coal, diamonds, gemstones, gold,
resources natural gas, nickel

Key ports Port of Dar es Salaam

Population 41 048 532 (2009 est.)

Population
2,04% (2009 est.)
growth rate
Life
52,01 years
expectancy

0 – 14 years: 43%
Age
15 – 64 years years: 54,1%
distribution
65 years and over: 2,9%

Kiswahili or Swahili (official), Kiunguja, English (official, primary language

Languages of commerce, administration, and higher education), Arabic, many local
languages

Mainland – Black (99%) (of which 95% are Bantu consisting of more than
Ethnic groups 130 tribes), other 1% (consisting of Asian, European, and Arab); Zanzibar
– Arab, African, mixed Arab and Black

Mainland – Christian (30%), Muslim (35%), indigenous beliefs (35%);

Religions
Zanzibar – Muslim (more than 99%)

220
Economy
Current account (as % of GDP) -9,9%

Savings rate (% of GDP) 11,23% (2006)

Foreign direct investment flows US$744 million

Size of labour force 21,06 million (2008 est.)

Unemployment -

Currency Tanzanian Shilling (TZS)

2007 2008

Average exchange rate (versus US$) 1 255 1 178,1 (est.)

GDP US$16,69 billion US$20,67 billion

GDP growth rate 7,1% 7,4%

GDP Per capita (PPP) US$1 300 US$1 400

GNI US$46,85 billion US$52,05 billion

GNI Per capita (PPP) US$1 130 US$1 230

Inflation rate (consumer prices) 7% (est.) 10,3% (est.)

Growth and Structure of the Economy

Tanzania is one of the poorest countries in the world. The economy depends heavily on

agriculture which accounts for more than one quarter (28,2%) of national GDP. Despite

the significance of the sector, topography and climatic conditions limit the cultivation of

crops to only 4% of the country’s total land area. Nevertheless, crop output accounts for

the highest share of GDP in the agricultural sector. The majority of industrial activity in

Tanzania is focused on the processing of agricultural products (sugar, beer, cigarettes,

sisal twine) and light consumer goods. Other major industries include diamond, gold

and iron mining; salt; soda ash; cement; oil refining; shoes; apparel; wood products and

fertiliser production.

221
Tanzania’s strong economic growth performance in recent years has been underpinned

by growth in services and construction, together with the recovery of the country’s

agricultural and industrial sectors. Growth has also been boosted by a substantial

increase in industrial production and increased mining operations, particularly related to

gold mining. In addition, recent banking reforms have helped to increase private-sector

growth and investment, together with continued donor assistance and sound macro-

economic policies.

Trade

Exports and Imports 2007 2008

Total exports $2,227 billion (est.) $2,413 billion (est.)

Export growth rate - 2,6%

Total imports $4,861 billion (est.) $7,08 billion (est.)

Import growth rate - 16,9%

International Trade
Apart from gold and coffee, Tanzania’s other main exports are cashew nuts, manufactured

goods and cotton. The country’s primary export partners are India (8,1%), Japan (6,5%),

China (6,3%), the UAE (5,7%), the Netherlands (5,6%) and Germany (5,1%).

Tanzania’s main imports include consumer goods, machinery and transportation

equipment, industrial raw materials and crude oil. Tanzania’s key import partners are

China (14,4%), India (9%), South Africa (7,7%), Kenya (6,9%) and the UAE (5,9%).

222
Trade with South Africa

(Rands ‘000) 2007 2008 2009

Total exports 2 757 256 2 765 244 2 742 005

Total imports 250 826 305 369 371 387

Trade balance 2 506 430 2 459 875 2 370 618

Bilateral Agreements with South Africa

• Memorandum of Understanding on Economic Co-operation (1998) (signed but not yet
tabled in Parliament);
• Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion
with Respect to Taxes on Income (2005);
• Treaty for the Avoidance of Double Taxation (2007); and
• Agreement for the Promotion and Reciprocal Protection of Investments (2005) (signed
but not yet ratified).

Barriers to Trade
Tanzania has a five-tier import duty structure, with a simple average of applied import

duties of 16,2%. This tariff structure is somewhat escalatory with many processed

products facing a higher effective rate of protection along the processing chain. Since

Tanzania relies heavily on revenues from tariffs and VAT, there is pressure to maintain

revenues through high tariff levels.

223
Business Climate
Infrastructure and Trade

Number of power outages in a typical month 12,00 (2006)

Average time to clear direct exports through customs (days) 5,70 (2006)

Average time to clear imports through customs (days) 14,30 (2006)

Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 131 Getting credit 87

Starting a business 120 Protecting investors 93

Dealing with construction

178 Paying taxes 120
permits

Employing workers 131 Trading across borders 108

Registering property 145 Enforcing contracts 31

Closing a business 113

Business Travel, Culture, Risk and Investment

International flights to Dar es Salaam, Arusha and Zanzibar are available from London,

South Africa, Nairobi and other neighbouring countries. Domestic air travel is convenient

with a large number of airports in the country. South African passport holders travelling to

Tanzania require a visa to enter the country.

Normal courtesies should be shown when visiting local business people. Almost all

executives speak English.

224
Regulatory Policy Framework for Businesses
After almost two decades of central planning that was characterised by excessive

government intervention in economic activities, from 1985 the government moved towards

market-based economic management. Key to these changes were trade and exchange

liberalisation, parastatal reforms and investment promotion reforms. The last of these

included guarantees against nationalisation and the provision of tax holiday incentives.

In 1997 the Tanzania Investment Act established the Tanzania Investment Centre and

identified investment priorities. The Act also overhauled the company registration process

and established investor rights and incentives. Tanzania is formally open to foreign

investment in all sectors, although investors must deal with many procedural barriers.

There is no limit on foreign ownership or control, although land ownership remains

restricted. Foreign purchases of real estate in Tanzania and the purchase of real estate

abroad by residents must be approved by the government.

Investors may receive certificates of incentive from the Tanzania Investment Centre

which enable them to qualify for VAT and import duty exemptions, and be allowed to

repatriate 100% of profits, dividends and capital after tax and other obligations have been

fulfilled. Similar incentives are also available to investors in Zanzibar through the Zanzibar

Investment Promotion Agency.

Tax rates in Tanzania are moderate, with both the top income and corporate tax rates set

at 30%. Other relevant taxes include VAT, a transfer tax on motor vehicles and a fuel levy

on petroleum products.

Opportunities for South African Businesses

Tanzania is an emerging market with great potential for future investment reflected in

its diverse economy that still boasts many untapped opportunities in numerous sectors.

225
These include opportunities in agriculture and livestock farming, manufacturing, health

and education, natural resource exploitation, mining, tourism, banking and insurance, as

well as construction based on the substantial need for infrastructure development in the

country.

Other important potential sectors for investment in South Africa include food and

beverages, Information and Communications Technology (ICT) and electronics, property,

telecommunications and textiles.

226
227
Republic of
Uganda
Geography and People

Location Eastern Africa, west of Kenya

Area 241 038km2

Capital city Kampala

Other major
Entebbe, Jinja, Mbarara, Gulu, Mbale
cities

Tropical; generally rainy with two dry seasons (December to February,

Climate
June to August); semi-arid in north-east
Natural
Copper, cobalt, hydropower, limestone, salt, arable land, gold
resources

Key ports Ports of Entebbe, Jinja and Port Bell

Population 32 369 558 (2009 est.)

Population
2,692% (2009 est.)
growth rate
Life
52,72 years
expectancy
0 – 14 years: 50%
Age
15 – 64 years years: 47,9%
distribution
65 years and over: 2,1%

English (official), Ganda or Luganda, other Niger-Congo languages, Nilo-

Languages
Saharan languages, Swahili, Arabic

Baganda (16,9%), Banyakole (9,5%), Basoga (8,4%), Bakiga (6,9%),

Ethnic groups Iteso (6,4%), Langi (6,1%), Acholi (4,7%), Bagisu (4,6%), Lugbara
(4,2%), Bunyoro (2,7%), other (29,6%)

Roman Catholic (41,9%), Protestant (42%), (Anglican (35,9%),

Religions Pentecostal (4,6%), Seventh Day Adventist (1,5%), Muslim (12,1%),
other (3,1%), none (0,9%)

228
Economy
Current account (as % of GDP) -5,5%

Savings rate (% of GDP) 14,5% (2006)

Foreign direct investment flows US$787 million

Size of labour force 14,54 million (2008 est.)

Unemployment -

Currency Uganda Shilling (UGX)

2007 2008

Average exchange rate (versus US$) 1 685,8 1 658,1

GDP US$11,92 billion US$ 14.56 billion

GDP growth rate 8,4% 9%

GDP Per capita (PPP) US$1 200 US$ 1 300

GNI $32,31 billion $36,08 billion

GNI Per capita (PPP) $1 050 $1 140

Inflation rate (consumer prices) 6,1% 12,1%

Growth and Structure of the Economy

Uganda has one of the fastest-growing economies in Africa and is also one of the most

economically liberal countries on the continent. However, despite market reforms and a

decade of economic growth, Uganda remains poor and dependent on Kenya for access to

international markets. Agriculture is the most important sector of the economy employing

approximately 80% of the workforce and accounting for close to 30% of national GDP.

The country’s most prominent cash crops are coffee and cotton. Uganda has substantial

natural resources, including fertile soils, regular rainfall, and sizeable mineral deposits of

copper and cobalt.

229
While growth in the agricultural sector has largely stagnated, the Ugandan economy has

grown at an impressive rate in recent years, with this growth led by the service and

industrial sectors. The service sector accounts for roughly half of Uganda’s GDP, and

is dominated by financial services, transport and communications (especially mobile

phones). Activities in the industrial sector are underpinned by manufacturing, construction

and mining.

Trade

Exports and Imports 2007 2008

Total exports US$1,686 billion US$2,688 billion

Export growth rate - 2,5%

Total imports US$ 2,983 billion US$3,98 billion

Import growth rate - 13,3%

International Trade
Uganda’s main exports are coffee, fish and fish products, tea, cotton, flowers, horticultural

products and gold. The country’s chief exporting partners are Sudan (14,3%), Kenya

(9,5%), Switzerland (9%), Rwanda (7,9%), the UAE (7,4%), the Democratic Republic of

Congo (7,3%), the United Kingdom (6,9%), the Netherlands (4,7%) and Germany (4,4%).

Uganda’s main imports are capital equipment, vehicles, petroleum, medical supplies

and cereals and its major importing partners are the UAE (11,4%), Kenya (11,3%), India

(10,4%), China (8,1%), South Africa (6,7%) and Japan (5,9%).

230
Trade with South Africa

(Rands ‘000) 2005 2006 2007

Total exports 587 751 713 316 1 093 250

Total imports 36 435 42 657 120 922
Trade balance 551 315 670 660 972 328

Bilateral Agreements with South Africa

• Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion
with respect to Taxes on Income (1997);
• Treaty for the Avoidance of Double Taxation (2001);
• Reciprocal Protection and Promotion of Investment Agreement (2000) (signed but not
yet ratified); and
• Bilateral Trade Agreement (2002) (signed but not yet tabled).

Barriers to Trade
Uganda’s weighted-average tariff rate was 7,4% in 2006. The government has made

progress in liberalising the trade regime, but import and export restrictions, some high

tariffs, import and export taxes and fees, inefficient and non-transparent regulation and

customs, export promotion programmes, weak enforcement of intellectual property rights

and corruption continue to add to trade costs.

Business Climate
Infrastructure and Trade

Number of power outages in a typical month 11,01 (2006)

Average time to clear direct exports through customs (days) 4,67 (2006)

Average time to clear imports through customs (days) 7,43 (2006)

231
Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 112 Getting credit 113

Starting a business 129 Protecting investors 132

Dealing with construction
84 Paying taxes 66
permits

Employing workers 7 Trading across borders 145

Registering property 149 Enforcing contracts 116

Closing a business 53

Business Travel, Culture, Risk and Investment

The only international airport in Uganda is at Entebbe, 35km from Kampala. It is served

by Brussels Airlines’ and by regional airlines, including South African Airways. South

African passport holders travelling to Uganda are required to obtain a visa from the High

Commission of the Republic of Uganda prior to departure. South African passport holders

will not be able to obtain visas on arrival, unless in the case of an emergency.

It is recommended that men wear a suit and tie for business meetings. English is used for

all business discussions and it is recommended that prior appointments be scheduled for

business engagements.

Regulatory Policy Framework for Businesses

The Investment Law of Uganda was established as a Code, to make provision within the

country’s legal framework for activity related to governing local and foreign investment,

and other related matters. Foreign investors are permitted to form 100% foreign-owned

limited or unlimited liability companies and may also enter into majority or minority joint

ventures with Ugandan nationals. In order to receive an investment licence, however,

investors must commit to investing US$100 000 over three years. The Ugandan

government also permits foreign investors to acquire or take over domestic enterprises.

232
The country’s investment code allows for foreign participation in any industrial sector,

with the exception of those deemed to be important for national security or requiring

the ownership of land. Notably, as well, investment projects that are deemed to have a

potential impact on the environment must undergo an environmental impact assessment

carried out by the National Environmental Management Authority.

The Companies Act allows for the creation of one-man companies, permits the registration

of companies incorporated outside of Uganda, and provides new provisions for share

capital allotments and transfers.

The Bank of Uganda administers exchange control on behalf of the Minister of Finance

and private-sector importers may purchase foreign exchange in the inter-bank market.

Ugandan courts generally uphold the sanctity of contracts, although judicial corruption

and procedural delays are commonplace.

Taxes in Uganda are moderately high. The top income and corporate tax rates are both

set at 30%. However, companies operating in the mining sector are subject to a higher

corporate tax rate of 45%. Other relevant taxes include VAT and a property tax.

Opportunities for South African Businesses

Uganda is strategically located in Africa, sharing borders with many of the continent’s

most resource-rich countries. Macro-economic stability in the country has been possible

because of Uganda’s low inflation rates, along with its liberal economic regime making

a free flow of foreign investment possible. The key sectors offering profitable investment

opportunities in Uganda are agriculture, tourism, mining and energy and ICT.

233
CENTRAL AFRICA
• Cameroon • Equatorial Guinea
• Central African • Gabon
Republic
• Republic of Congo
• Chad
• São Tomé e Príncipe
• Democratic Republic
of Congo

234
Chad

Central
African
Republic

Cameroon

Equatorial
Guinea
São Tomé Republic
e Príncipe of Congo
Democratic
Republic of
Congo

Gabon

235
Republic of
Cameroon
Geography and People

Western Africa, bordering the Bight of Biafra, between Equatorial Guinea

Location
and Nigeria

Area 475 440km2

Capital city Yaoundé

Other major
Limbe and Kribi
cities

Climate Varies with terrain, from tropical along coast to semi-arid and hot in north

Natural
Petroleum, bauxite, iron ore, timber, hydropower
resources

Key ports Port of Douala, Limboh Terminal

Population 18 879 301 (2009 est.)

Population
2,19% (2009 est.)
growth rate
Life
53,69 years
expectancy
0 – 14 years: 40,9%
Age
15 – 64 years: 55,9%
distribution
65 years and over: 3,3%
Languages 24 major African language groups, English (official), French (official)

Cameroon Highlanders (31%), Equatorial Bantu (19%), Kirdi (11%),

Ethnic groups Fulani (10%), North-western Bantu (8%), Eastern Nigritic (7%), other
African (13%), non-African (less than 1%)

Religions Indigenous beliefs (40%), Christian (40%), Muslim (20%)

236
Economy
Current account (as % of GDP) -7,2%

Savings rate (% of GDP) 17,26%

Foreign direct investment flows US$260 million

Size of labour force 6,759 million (2008 est.)

Unemployment 30% (2001 est.)

Coopération Financière en
Currency
Afrique Centrale Franc (XAF)

2007 2008

Average exchange rate (versus US$) 493,51 477,81 (est.)

GDP US$20,43 billion US$23,73 billion

GDP growth rate 3,3% 2,9%

GDP per capita (PPP) US$2 300 US$2 300

GNI US$39,28 billion US$41,28 billion

GNI per capita (PPP) US$2 120 US$2 180

Inflation rate (consumer prices) 1,1% 5,3%

Growth and Structure of the Economy

Cameroon is endowed with oil resources and favourable agricultural conditions, and

the country’s economy has benefited greatly from rising international oil and cocoa

prices in recent years. Nevertheless, Cameroon still faces bureaucratic and sufficient

infrastructure development challenges. The key sectors of the country’s economy are

agriculture, with industry and services contributing 43,6%, 15,9% and 40,5% of the
country’s GDP, respectively. Cameroon’s major industries are petroleum production and

refining, aluminium production, food processing, light consumer goods, textiles, lumber,

ship repair, timber, and palm oil .

237
Growth in the country’s primary sector slowed to just 3,6% in 2008 on the back of declining

global demand for commodities such as wood and cotton. The agricultural sector fared

comparatively better in 2008, growing at an estimated 6,9%, with much of this growth

attributable to growth in the production of food crops, as well as lower growth in the

country’s export crops (particularly cocoa, coffee, bananas, cotton, rubber and palm oil).

Recent growth in Cameroon’s secondary sector has also been sluggish – the sector grew

at just 1% in 2008 – with strong growth in the agro-food and electricity industries offset

by a decline in construction. In overall terms, much of the country’s economic growth

remains underpinned by domestic demand.

Trade
Exports and Imports 2007 2008

Total exports US$4,345 billion US$4,707 billion

Export growth rate - 6,6%

Total imports US$4,05 billion US$4,303 billion

Import growth rate - 3,2%

International Trade
Cameroon’s main export partners are Spain (19,8%), Italy (13,5%), the USA (10,6%),

France (8,2%), the Netherlands (8,1%), China (7,9%) and Belgium (4%). The country’s

primary export commodities include crude oil and petroleum products, lumber, cocoa

beans, aluminium, coffee and cotton. Petroleum products constitute over half of the

country’s exports.

The country’s main import partners are France (21,1%), Nigeria (13,8%), China (9,5%)

and Belgium (6,1%). Cameroon’s major imports include machinery, electrical equipment,

transport equipment, fuel and food.

238
Trade with South Africa

(Rands ‘000) 2007 2008 2009

Total exports 232 609 284 285 336 735

Total imports 17 974 9 370 18 619

Trade balance 214 635 274 914 318 117

Bilateral Agreements with South Africa

• Memorandum of Understanding on Economic Co-operation (2006) [signed but not yet
tabled in Parliament]; and
• Bilateral Trade Agreement (2006).

Barriers to Trade
Cameroon’s main trade policy instrument is tariffs. Imports, as well as domestically-

produced goods, are subject to a value-added tax (18,7%), and some products, including

alcoholic beverages, cigarettes, cosmetics, and jewellery are subject to a 25% excise tax.

In contrast, there are currently very few import restrictions aimed at ensuring security and

protecting public health and the environment. However, the Cameroonian Government

does impose surcharges and prohibitions on selected imports.

Although the government has tried to expedite customs clearance – by opening a single-

window facility to streamline customs procedures – lengthy customs clearing process

remain common.

239
Business Climate
Infrastructure and Trade

Number of power outages in a typical month 10,63 (2009)

Average time to clear direct exports through customs (days) 15,08 (2009)

Average time to clear imports through customs (days) 23,95 (2009)

Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 171 Getting credit 135

Starting a business 174 Protecting investors 119

Dealing with construction

164 Paying taxes 170
permits

Employing workers 126 Trading across borders 149

Registering property 143 Enforcing contracts 174

Closing a business 98

Business Travel, Culture, Risk and Investment

Direct flights from Johannesburg to Doula are operated by SAA. Kenya Airways also

offers connecting flights via Nairobi. In addition, there are daily connections via Paris.

South Africans require a visa to travel to Cameroon. Single-entry visas are valid for up to

three months, while multiple entry visas are valid for up to six months. Foreign passport

holders travelling to Cameroon from South Africa must produce proof of legal stay in

South Africa.

French is the most widely used language in the business environment, although English

is also used.

240
Property rights are legally protected in Cameroon. The country also has extensive

legal guarantees that prevent investors from losing revenue if expropriation occurs.

The Cameroonian Government has made significant efforts to encourage FDI. For

instance, the country’s Investment Code aims to improve the investment environment

through better enforcement of contracts, private property protections and ensuring fair

and timely court hearings. There have been improvements in fiscal performance and

public finance management, as well as the preservation of macroeconomic stability. In

light of Cameroons recent mixed growth performance and the ongoing global economic

slowdown, the recent policy documents have reiterated the Cameroonian Government’s

commitment to reinvigorate growth-oriented policies.

Regulatory Policy Framework for Businesses

Cameroon provides tax incentives aimed at promoting industrial development, encouraging

exports and creating employment. These incentives are contingent upon export performance

and, in certain instances, on the use of domestic inputs. For instance, Cameroon’s National

Assembly passed legislation in 2008 providing benefits in the form of tax incentives – such

as an exemption on VAT – for infrastructure projects over US$200 million.

As of January 2009, a new investment charter adopted in April 2002 had not been fully

implemented as a result of delays in passing the necessary implementing legislation. This

has meant that certain relevant portions of the preceding 1990 Investment Code remain in

force until the full implementation of the 2002 Investment Charter is complete. As a result,

investors are obliged to operate within sometimes confusing and conflicting frameworks.

The 2002 Investment Charter permits 100% foreign ownership and does not discriminate
on the basis of nationality with regard to equity ownership. Furthermore, the 2002

Investment Charter recognises property rights and facilitates the acquisition of land, while

local ownership of land is not required under Cameroonian law. Foreign investors are also

241
permitted to participate in privatisation programmemes. It should be noted, however, that

foreign participation in programmemes that are financed or subsidised by the government

is only permitted in research and development programmemes that are deemed to be

beyond the capacity of Cameroonian firms.

The legislative framework allows for dividends to be freely remitted abroad. Similarly,

capital returns, interest and principal on foreign debt, lease payments, royalties and

management fees, and returns on liquidation can all be remitted abroad. It should be

noted, however, that commercial foreign exchange transfers of more than 100 million CFA

must be authorised by the Ministry of Finance, and are routinely granted should these

conform to investment and fiscal regulations. Similarly, a declaration of intent must be

submitted to the Ministry of Finance 30 days in advance for direct investments totalling

100 million CFA Francs or more.

Considerable liberalisation has occurred in Cameroon’s export sector through the removal

of all export taxes, except those levied on logs. Export licences apply only to sensitive

goods such as gold and diamonds, while coffee and cocoa require an export certificate

to ensure quality. Remaining export prohibitions, such as those on hazardous products,

are in place for health and environmental reasons. Cameroon does not grant any specific

assistance to exporters other than tax incentives.

242
Opportunities for South African Businesses
Cameroon’s abundant natural resources, along with its cheap workforce, represent

attractive prospects for potential investors. The country’s agriculture and oil sectors

offer the greatest investment potential. In addition, the Cameroonian Government has

targeted the mining, food, energy and construction industries as up-and-coming areas for

additional investment.

243
Central African
Republic
Geography and People

Location Central Africa, north of Democratic Republic of Congo

Area 622 984km2

Capital city Bangui

Other major
Berberati, Bossangoa, Bouar
cities

Climate Tropical; hot, dry winters; mild to hot, wet summers

Natural
Diamonds, uranium, timber, gold, oil, hydropower
resources

Key ports The Central African Republic is landlocked

Population 4 511 488 (2009 est.)

Population
1,491% (2009 est.)
growth rate

Life
44,47 years
expectancy

0 – 14 years: 40,9%
Age
15 – 64 years: 55%
distribution
65 years and over: 4,1%

French (official), Sangho (lingua Franca and national language), tribal

Languages
languages

Baya (33%), Banda (27%), Mandjia (13%), Sara (10%), Mboum (7%),
Ethnic groups
M'Baka (4%), Yakoma (4%), other (2%)

Indigenous beliefs (35%), Protestant (25%), Roman Catholic (25%),

Religions
Muslim (15%)

244
Economy
Current account (as % of GDP) -9,5%

Savings rate (% of GDP) 6,19% (2006)

Foreign direct investment flows US$121 million

Size of labour force 1,926 million (2007)

Unemployment 8% (2001 est.)

Coopération Financière en
Currency
Afrique Centrale Franc (XAF)

2007 2008

Average exchange rate (versus US$) 481,8 447,81 (est.)

GDP US $ 1.7 billion US$2 billion

GDP growth rate 3,7% 2,2%

GDP per capita (PPP) US$700 US$ 700

GNI US$3,08 billion US$3,22 billion

GNI per capita (PPP) US$710 US$730

Inflation rate (consumer prices) 0,9% (est.) 4,6% (est.)

Growth and Structure of the Economy

The economy of the Central African Republic is essentially one of subsistence agriculture,

with this sub-sector generating half of the country’s GDP. The agriculture sector accounts

for approximately 55% of GDP with industry making up 20% and services 25%. The

economy is also dependent on gold and diamond mining, logging, brewing, textiles,

footwear, assembly of bicycles and motorcycles industries.

245
The fact that the Central African Republic is landlocked, coupled with factors including a

poor transportation system, a largely unskilled work force, a legacy of misdirected macro-

economic policies and factional fighting between the government and its opponents have

all contributed to constraining the country’s economic growth. Furthermore, the country

has been plagued by political instability and internal conflict for many years, undermining

economic infrastructure and constraining socio-economic development. Since 2004,

however, the country has experienced a gradual return to political stability and economic

growth. Despite this, the economy did experience a slowdown in real GDP growth in

2008, primarily as a result of external shocks that included high international oil prices,

the food crisis and declining global demand for raw materials on the back of the global

economic crisis.

Trade

Exports and Imports 2007 2008

Total exports US$146,7 million -11.9 %

Export growth rate - -

Total imports US$237,3 million 6,9 %

Import growth rate - -

International Trade
The chief exports from the Central African Republic to international markets are diamonds,

timber, cotton, coffee and tobacco. These commodities are mainly exported to Japan

(40,4%), Belgium (9,8%), China (8,2%), Morocco (6%), Indonesia (5,6%), France (4,4%),

Italy (4,1%) and the Democratic Republic of Congo (4%).

The country’s major imports are imported food, textiles, petroleum products, machinery,

246
electrical equipment, motor vehicles, chemicals and pharmaceutical products. Key import

partners include South Korea (20,2%), France (13,6%), Cameroon (7,7%), Netherlands

(5,8%) and the USA (5,3%).

While negotiations on an interim trade and development co-operation agreement

between Central Africa and the EU, to replace the expired trade preferences granted

under the African Caribbean Pacific (ACP)-EU Cotonou Agreement, are presently under

consideration at the sub-regional level with CEMAC, the Central African Republic’s exports

remain eligible for duty-free and quota-free access to the EU under the ‘Everything But

Arms’ initiative.

Trade with South Africa

(Rands ‘000) 2007 2008 2009

Total exports 8 397 35 719 55 532

Total imports 1 85 5 693

Trade balance 8 396 35 396 49 839

Bilateral Agreements with South Africa

• None

Barriers to Trade
The Central African Republic’s weighted-average tariff rate was comparatively high at

16.8% in 2005. The government restricts imports of sugar and coffee, imposes import and

export taxes, implements customs valuations for certain imports and provides subsidies

to exports. Other barriers to trade include inadequate infrastructure, a weak regulatory

framework, inefficient customs administration and customs fraud.

247
Business Climate
Infrastructure and Trade

Number of power outages in a typical month -

Average time to clear direct exports through customs (days) -

Average time to clear imports through customs (days) -

Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 183 Getting credit 135

Starting a business 159 Protecting investors 132

Dealing with construction

147 Paying taxes 179
permits

Employing workers 144 Trading across borders 181

Registering property 138 Enforcing contracts 171

Closing a business 183

Business Travel, Culture, Risk and Investment

While there is an international airport in Bangui that is served primarily by Air Afrique,

there are no direct flights between Johannesburg and Bangui. It is, however, possible to

travel to Bangui via Douala (Cameroon) and N’djamena (Chad) with Toumai Air Chad.

South Africans require a visa to travel to the Central African Republic.

Knowledge of the French language is essential. Interpreter and translation services may

be available at large hotels. Business cards should be in French and English. Formal

wear (suits and ties for men) is recommended when conducting business engagements

in the country. The best months for business visits are between November and May.

248
Political instability, high transport costs and a small domestic market means that the

Central African Republic has limited foreign investment and access to commercial and

capital markets. Most investors are currently staying away until incidences of banditry

and extortion are reduced and the government establishes business-friendly credentials.

While the security situation remains unstable, undermining economic progress, the

economy has continued to grow at 4% since 2007, driven by the recovery of investment in

mining extraction (diamond, gold and uranium), oil exploration and telecommunications.

The growth in the value of ore exports has also contributed to improvements in economic

performance in the country.

Regulatory Policy Framework for Businesses

Positive reforms to the business environment in the Central African Republic have

included the creation of a ‘one-stop enterprise formalities shop’ in 2008, as well as the

implementation of a permanent framework for co-operation between the government and

the country’s private-sector. Despite this, many obstacles to the promotion of investment

and the development of the private-sector in the Central African Republic remain. In

particular, the country’s external competitiveness has deteriorated as a result of internal

constraints that include high transport costs, underdeveloped economic infrastructure

and low production levels.

The country boasts a relatively stable financial system with financial regulation and

prudential supervision provided by the Central African Banking Commission as a result

of the Central African Republic’s membership of the CFA Franc Zone. Furthermore,

the government of the Central African Republic has adopted the CEMAC Charter of

Investment. Limited efforts have also been made to standardise and simplify labour and
investment codes in the country.

249
Opportunities for South African Businesses
Movements towards political stability in the Central African Republic have seen a gradual

return to sustained economic growth. The main sectors that are likely to drive future

growth relate to forestry, commerce and trade, transportation, industrial manufacturing,

banking and insurance finance, tourism and travel, and the construction industry.

Investment opportunities also exist in the country’s secondary sector, which focuses

on textiles, food processing and public works. Similarly, in the country’s tertiary sector,

investors should look to transportation, telecommunications and banking as potential

growth areas.

250
251
Republic of
Chad
Geography and People

Location Central Africa, south of Libya

Area 1,284m km2

Capital city N'Djamena

Other major
Moundou, Sarh, Abèchè
cities

Climate Tropical in south, desert in north

Natural Petroleum, uranium, natron, kaolin, fish (Lake Chad), gold, limestone,
resources sand and gravel, salt

Key ports Chad is landlocked

Population 10 329 208 (2009 est.)

Population
2,069% (2009 est.)
growth rate
Life
47,7 years
expectancy

0 – 14 years: 46,7%
Age
15 – 64 years: 50,4%
distribution
65 years and over: 2,9%

French (official), Arabic (official), Sara (in south), more than 120 different
Languages
languages and dialects

Sara (27,7%), Arab (12,3%), Mayo-Kebbi (11,5%), Kanem-Bornou (9%),

Ethnic groups Ouaddai (8,7%), Hadjarai (6,7%), Tandjile (6,5%), Gorane (6,3%), Fitri-
Batha (4,7%), other (6,4%), unknown (0,3%)

Muslim (53,1%), Catholic (20,1%), Protestant (14,2%), animist (7,3%),

Religions
other (0,5%), unknown (1,7%), atheist (3,1%)

252
Economy
Current account (as % of GDP) -20,8%

Savings rate (% of GDP) 23,37% (2006)

Foreign direct investment flows US$834 million

Size of labour force 4,293 million (2007)

Unemployment -

Coopération Financière en Af-

Currency
rique Centrale Franc (XAF)

2007 2008

Average exchange rate (versus US$) 480,1 447,81

GDP US$7,02 billion US$8,4 billion

GDP growth rate 0,2% (est.) -0,2% (est.)

GDP per capita (PPP) US$1 600 (est.) US$1 600 (est.)

GNI US$13,12 billion US$12,89 billion

GNI per capita (PPP) US$1 220 US$1 160

Inflation rate (consumer prices) 4% (est.) 10,3% (est.)

Growth and Structure of the Economy

Although more than 80% of Chad’s population relies on subsistence farming and animal

husbandry, the economy has been boosted by major FDI projects in the oil sector that

began in 2000. Oil production in Chad began in earnest in late 2003 and the export of oil

began in 2004. The nation’s total oil reserves have been estimated at some two billion

barrels. However, Chad’s economy relies on foreign assistance and foreign capital for

most public and private-sector investment projects. In addition, the economy has been

handicapped by Chad’s landlocked position, together with high-energy costs and a history

of political instability.

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In 2008, the country’s primary sector accounted for 45% of GDP, with oil production and

agriculture forming the basis of much of the activity in the sector. The major industries

underpinning the economy are oil mining, cotton textiles, meatpacking, brewing, natron

(sodium carbonate), soap, cigarettes and construction materials. According to estimates

for 2008, these industries registered a combined growth rate of 2% in that year.

Overall GDP growth in the economy remains weak, primarily due to the deteriorating

performance of the country’s oil industry and ongoing conflicts between government

forces and rebel groups in the country. Despite this, growth in the secondary sector has

been fuelled by a recent rise in textile production.

Trade

Exports and Imports 2007 2008

Total exports $3,674 billion (est.) $4,342 billion (est.)

Export growth rate - 1,3%

Total imports $1,541 billion (est.) $1,927 billion (est.)

Import growth rate - -31,8%

International Trade
Despite consistently ranking among the poorest countries in the world, Chad’s export sector

has grown significantly in recent years following the discovery of oil and its subsequent

extraction and export. In addition to oil, Chad’s other chief exports are livestock, cotton

and gum arabic. The country’s major export partners are the USA, accountable for the

majority of total exports (92,8%), Japan (2,2%), and France (1,5%).

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Chad’s major imports include machinery and transportation equipment, industrial goods,

foodstuffs and textiles. These commodities are mainly imported from France (17,5%),

Cameroon (14,8%), China (9,8%), the Ukraine (9,5%), the USA (7,7%), Germany (5,6%),

Saudi Arabia (4,7%) and the Netherlands (4%).

Trade with South Africa

(Rands ‘000) 2007 2008 2009

Total exports 35,681 37,180 34 778

Total imports 11 133 309

Trade balance 35,670 37,047 34 468

Bilateral Agreements with South Africa

• None

Barriers to Trade
Chad’s weighted-average tariff rate was 13,3% in 2005. Other barriers to trade in the

country include numerous import fees, customs valuations for some products, a non-

transparent customs code, weak enforcement of intellectual property rights, non-

transparent government procurement procedures, corruption and inefficient customs

administration.

255
Business Climate
Infrastructure and Trade

Number of power outages in a typical month 22,63 (2009)

Average time to clear direct exports through customs (days) 11,85 (2009)

Average time to clear imports through customs (days) 27,51 (2009)

Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 178 Getting credit 150

Starting a business 182 Protecting investors 132

Dealing with construction

73 Paying taxes 133
permits

Employing workers 118 Trading across borders 169

Registering property 136 Enforcing contracts 170

Closing a business 183

Business Travel, Culture, Risk and Investment

Flights from South Africa are available with several airlines, and with the option of one
or two connections. One-stop flights to Chad are offered by Ethiopian Airlines and South
African Airways via Addis Ababa, and by Air France via Paris.

A working knowledge of French is essential as there are no professional translators

available. The best months for business visits are between November and May.

The government encourages foreign investment and has implemented various

reforms to improve investment conditions. There are investment opportunities in the
telecommunications, cotton and power sectors. Privatisation is occurring in these sectors
and foreign firms are actively encouraged to participate in the tender process.

256
Regulatory Policy Framework for Businesses
In recent years, Chad has ranked among the 20 countries in the world with the most
cumbersome business regulations and the weakest protection of property rights. In
particular, there are numerous procedures involved in registering a business in the country
and the process is seen as overly complex. Mindful of these issues, the government has
implemented a number of reforms to improve investment conditions and the regulatory
policy framework for businesses, including the introduction of a framework for the ongoing
dialogue between the state and the private-sector, reforms to the legal framework,
customs and investment codes, streamlining of the tax system, and improvements to the
transparency of procedures for awarding government.

While expropriation is not common, there is a clause in Chad’s Investment Code

which states that property can be expropriated after five years if it has not been used
or developed. The majority of state enterprises in Chad have been either partially or
completely privatised and the government has begun a process of gradually liberalising
key sectors of the economy.

Opportunities for South African Businesses

The oil sector forms the backbone of the economy in Chad and has been responsible
for much of the country’s economic growth. Investment opportunities in the sector have
been boosted by the establishment of the Chad-Cameroon pipeline (inaugurated in 2003)
which has become one of the country’s primary sources of foreign income.

Other areas, which might interest investors to Chad include the mining sector, with the
country boasting extensive mineral deposits that include gold, bauxite, uranium, silver
and alluvial diamonds.

Investment opportunities are also available in the telecommunications, cotton, and power
sectors primarily as a result of the privatisation process in which investors have continued
to play an influential role.

257
Democratic
Republic of Congo
Geography and People

Location Central Africa, north-east of Angola

Area 2 344 858km2

Capital city Lubumbashi, Mbuji-Mayi, Kananga, Kisangani

Tropical; hot and humid in equatorial river basin; cooler and drier in
southern highlands; cooler and wetter in eastern highlands; north of
Other major
Equator wet season April to October, dry season December to February;
cities
south of Equator wet season November to March, dry season April to
October
Cobalt, copper, niobium, tantalum, petroleum, industrial and gem
Climate diamonds, gold, silver, zinc, manganese, tin, uranium, coal, hydropower,
timber
Natural
Ports of Banana, Boma and Matadi
resources
Key ports Ports of Assab and Massawa

Population 68 692 542 (2009 est.)

Population
3,208% (2009 est.)
growth rate
Life
54,36 years
expectancy

0 – 14 years: 46,9%
Age
15 – 64 years: 50,6%
distribution
65 years and over: 2,5%
French (official), Lingala (a lingua Franca trade language), Kingwana (a
Languages
dialect of Kiswahili or Swahili), Kikongo, Tshiluba
Over 200 African ethnic groups of which the majority are Bantu; the four
Ethnic groups largest tribes – Mongo, Luba, Kongo (all Bantu), and the Mangbetu-
Azande (Hamitic) make up about 45% of the population
Roman Catholic (50%), Protestant (20%), Kimbanguist (10%), Muslim
Religions
(10%), other (includes syncretic sects and indigenous beliefs) (10%)

258
Economy
Current account (as % of GDP) -14,6%

Savings rate (% of GDP) 8,86 (2006)

Foreign direct investment flows US$1 billion

Size of labour force 23,53 million (2007 est.)

Unemployment -

Currency Congolese Franc (CDF)

2007 2008

Average exchange rate (versus US$) - -

GDP US$10,01 US$11,63 billion

GDP growth rate 6,3% 6,2%

GDP per capita (PPP) US$300 US$300

GNI US$17,81 billion US$18,38 billion

GNI per capita (PPP) US$290 US$290

Inflation rate (consumer prices) 16,7% (est.) -

Growth and Structure of the Economy

The war that began in 1998 adversely affected the economy of the Democratic Republic

of Congo. During the war, national output and government revenue declined while

external debt increased. Foreign businesses also curtailed operations owing to poor

infrastructure, a difficult operating environment and uncertainty about the outcome of the

conflict. The conditions have since improved following the withdrawal of foreign troops

in 2002. However, much economic activity still occurs in the informal sector, and is not

reflected in GDP data. Indeed, because tax laws are enforced arbitrarily, many people

259
and enterprises have moved to the informal sector, which accounts for more than 80%

of economic activity. The main sectors contributing to the country’s GDP are agriculture

(55%), industry (11%) and services (34%). Production in the economy is dominated by

agriculture, forestry, fishing and hunting, as well as wholesale and retail trade and the

mining industries (most notably copper, cobalt and crude oil).

The transitional government has re-established relations with international financial

institutions and international donors. The government has also begun to implement

reforms but progress in this regard has been slow. These reforms are expected to lead

to increased government revenues, external budget support and FDI. The Democratic

Republic of Congo government still has to address long-term problems that include an

uncertain legal framework, corruption, and lack of transparency in government policy. The

country has slowly been emerging from a long period of political instability and violence.

Poor economic management, exacerbated by recurrent political crises, has severely

hindered the country’s economic development and has constrained economic freedom.

Much of the country’s economic activity has been shackled by weak institutional capacity

that has failed to support the sustainable development of a dynamic private-sector.

Trade

Exports and Imports 2007 2008

Total exports US$6,1 billion -

Export growth rate - 18,6%

Total imports US$5,2 billion -

Import growth rate - 6,4%

260
International Trade
The Democratic Republic of Congo mainly exports commodities to China (48,4%), Belgium

(15,8%), Finland (9,8%), the USA (8,3%) and Zambia (4,5%). The country’s main export

commodities are diamonds, gold, copper, cobalt, wood products, crude oil and coffee.

The Democratic Republic of Congo mainly imports foodstuffs, mining and other machinery,

transport equipment and fuels. The country’s main export partners are South Africa

(28,7%), Belgium (10%), Zambia (7,2%), Zimbabwe (6%), China (5,9%), Kenya (5,1%)

and France (4,7%).

Trade with South Africa

(Rands ‘000) 2006 2007 2008 2009

Total exports 1 807 179 2 554 532 4 438 167 1 886 329

Total imports 26 472 49 213 54 741 124 769

Trade balance 1 780 707 2 505 319 4 383 426 1 761 560

Bilateral Agreements with South Africa

• Agreement for the Reciprocal Promotion and Protection of Investments (2004) [signed
but not yet ratified];
• Memorandum of Understanding on Economic Co-operation (2001) [signed but not yet
tabled in Parliament]; and
• Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion
with respect to Taxes on Income (2005).

261
Barriers to Trade
The main barriers to trade in the Democratic Republic of Congo include import licences,

red tape, an inefficient customs service and corruption. Inadequate and inefficient

infrastructure, complex regulations, and burdensome and complex bureaucracy represent

further barriers to trade. It is important to note that there is also substantial unrecorded

trade. The country’s weighted- average tariff rate was 11,4% in 2006

Business Climate
Infrastructure and Trade

Number of power outages in a typical month 17,79 (2006)

Average time to clear direct exports through customs (days) 3,60 (2006)

Average time to clear imports through customs (days) 13,05 (2006)

Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 182 Getting credit 167

Starting a business 154 Protecting investors 154

Dealing with construction
146 Paying taxes 157
permits
Employing workers 174 Trading across borders 165

Registering property 157 Enforcing contracts 172

Closing a business 152

Business Travel, Culture, Risk and Investment

Several direct flights are available from South Africa to the Democratic Republic of Congo

each week. There are also indirect flights via Nairobi and Addis Ababa. South African

passport holders require visas to travel to the Democratic Republic of Congo.

262
Business people are advised to wear lightweight suits. Although business is mainly

conducted in French, interpreter and translation services are available. The best time to

visit is in the cool season, which varies from one part of the country to another.

The Democratic Republic of Congo has a high-risk political and economic environment

and a difficult business environment that can have a very significant impact on

corporate behaviour. Corporate default probability is very high. After posting respectable

performance from 2001 to 2005, the country’s economic situation deteriorated after the

suspension of IMF backing in the 2006 and 2007 pre-election and post-election periods.

Three decades of lax economic management have resulted in unsustainable foreign debt.

The Democratic Republic of Congo stands to benefit from an estimated US$5 billion in

loans from China, earmarked for the development of rail, road and mining infrastructure.

The security situation remains unstable in the Kivu province, the eastern region bordering

Rwanda and Burundi, which has been the scene of several conflicts that have served to

create an investment climate that is currently fraught with risk.

Regulatory Policy Framework for Businesses

Residents cannot hold foreign exchange accounts but companies may hold foreign

investment accounts, with special approval. There are documentation requirements for

payment and transfers to countries other than France, Monaco, members of the WAEMU

and the Comoros. Capital transactions to countries other than those mentioned above are

subject to exchange-control approval and are restricted.

A government bill promoting foreign investment outlines procedures for awarding licences

and limits the state’s equity share to 10%. Pro-business incentives including tax breaks

and duty exemptions (granted for three to five years) have been created to attract foreign

investors into the country. Furthermore, private ownership is protected in the Democratic

Republic of Congo Constitution without discrimination between foreign and local investors.

263
Aside from investments involving the creation of a mixed public/private enterprise, all

investments over CFAF 100 million require the approval of the Ministry of Economy,

Finance and Budget. The country’s investment regulations, outlined in its Investment

Code, do not discriminate against foreign investors, aside from certain specific cases that

deal with labour and related taxes. In addition, in broad terms the Democratic Republic

of Congo government does not impose any formal limits or screening mechanisms upon

foreign businesses operating in the country. However, small businesses are subject to

presidential decrees (number 79-021 of 2 August 1979 and number 90-046 of 8 August

1990) which prohibit foreign investors from engaging in retail commerce. Importantly,

while no specific investment provisions are contained in the country’s Investment

Code, investment conditions must be discussed and agreed upon at the outset with

the government of the Democratic Republic of Congo through its investment agency,

a procedure that typically takes approximately 30 days to complete. The Investment

Code stipulates that the government of the Democratic Republic of Congo may require

compliance with an investment agreement within 30 days of notification.

Notably, both local and foreign investors operating businesses in the Democratic Republic

of Congo are typically subjected to multiple audits by various government agencies

seeking to unearth violations of tax laws or price controls.

Despite the presence of these business and investment regulations, the absence of a

strong regulatory framework means that the Democratic Republic of Congo remains

264
a challenging place to do business. In particular, inadequate contract enforcement,

limited access to credit, a lack of adequate property rights protection and high levels of

bureaucracy and corruption

Opportunities for South African Businesses

The Democratic Republic of Congo has emerged from a period of instability and unrest

and is currently undergoing massive regeneration and infrastructure reconstruction. This

has created significant opportunities within the country’s building and construction sector.

Other sectors with growth potential include food and beverages and services.

265
Republic of
Equatorial Guinea
Geography and People

Western Africa, bordering the Bight of Biafra, between Cameroon and

Location
Gabon

Area 28 051km2

Capital city Malabo

Other major
Bata, Luba and Mbini
cities

Climate Tropical, always hot and humid

Natural Petroleum, natural gas, timber, gold, bauxite, diamonds, tantalum, sand
resources and gravel, clay

Key ports Ports of Bata and Malabo

Population 633 441 (2009 est.)

Population
2,703% (2009 est.)
growth rate

Life
61,61 years
expectancy

0 – 14 years: 41,9%
Age
15 – 64 years: 54%
distribution
65 years and over: 4,1%

Spanish (67,6%) (official); other (32,4%) (includes French (official),

Languages
Fang, Bubi)

Fang (85,7%), Bubi (6,5%), Mdowe (3,6%), Annobon (1,6%), Bujeba

Ethnic groups
(1,1%), other (1,4%)

Religions Christian (predominantly Roman Catholic), pagan practices

266
Economy
Current account (as % of GDP) -5,3%

Savings rate (% of GDP) 46,15%

Foreign direct investment flows US$1,3 billion

Size of labour force -

Unemployment 30% (1998 est.)

Coopération Financière en
Currency
Afrique Centrale Franc (XAF)

2007 2008

Average exchange rate (versus US$) 481,83 447,81 (est.)

GDP US$12,58 billion US$ 18.52 billion

GDP growth rate 21,4% 11,3%

GDP per capita (PPP) US$34 700 (est.) US$37 300 (est.)

GNI US$10,42 billion US$14,31 billion

GNI per capita (PPP) US$16 230 US$ 21 700

Inflation rate (consumer prices) 6% 7,5%

Growth and Structure of the Economy

Equatorial Guinea’s rapid economic growth in recent years has been underpinned

by the discovery and exploitation of oil reserves. Although cocoa production was the

main source of hard currency for the pre-independence government, agriculture now

contributes just 2,3% to national GDP. Equatorial Guinea’s economy is dominated by

the oil sector, which contributes approximately 82% to GDP, and has attracted a large

share of FDI from prominent oil companies. In total, the industry sector contributes

93,9% to the country’s GDP.

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Although the government has taken active steps to revive agriculture in the country through

the provision of farming equipment, inputs and financial aid to co-operatives, much of the

recent growth in the non-oil sectors of the economy has occurred in manufacturing and

services, with the latter contributing 12% of national GDP.

The World Bank and IMF have cut off a number of aid programmes to Equatorial Guinea

due to corruption and mismanagement. The country is no longer eligible for concessional

financing owing to large oil reserves. Given the dominance of the oil sector, and an export

structure that is heavily biased towards oil and gas, the country’s economy remains

vulnerable to external shocks.

Trade

Exports and Imports 2007 2008

Total exports US$10,25 billion US$13,03 billion

Export growth rate - 6,3%

Total imports US$2,365 billion US$3,114 billon

Import growth rate - 3,0%

International Trade
Equatorial Guinea exports commodities primarily to the USA (22,7%), Spain (18,2%),

China (14,7%), France (7,9%), Italy (6%), and South Korea (5,4%). The country’s main

exports are petroleum, methanol, timber and cocoa. In turn, Equatorial Guinea’s key

import partners are China (17,7%), Spain (13,3%), the USA (11,8%), France (10,9%),

Cote d’Ivoire (10,4%), Italy (5,5%), and the United Kingdom (5,1%). The country’s primary

imports are petroleum-sector equipment and other equipment.

268
Trade with South Africa

(Rands ‘000) 2006 2007 2008

Total exports 84 241 80 854 95 003

Total imports 468 1 778 15 355

Trade balance 83 772 79 076 79 647

Bilateral Agreements with South Africa

• Agreement for the Reciprocal Promotion and Protection of Investments (2004) (signed
but not yet ratified).

Barriers to Trade
Equatorial Guinea’s weighted-average tariff rate was 15,5% in 2007. Burdensome and

corrupt customs administration, extensive and non-transparent regulations, inadequate

infrastructure, export licence requirements for timber and cocoa, and government

subsidies of cocoa and other exports are the most prominent barriers to trade in the

country.

Business Climate

Infrastructure and Trade

Number of power outages in a typical month -

Average time to clear direct exports through customs (days) -

Average time to clear imports through customs (days) -

269
Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 170 Getting credit 135

Starting a business 178 Protecting investors 147

Dealing with construction
90 Paying taxes 163
permits
Employing workers 182 Trading across borders 138

Registering property 76 Enforcing contracts 72

Closing a business 183

Business Travel, Culture, Risk and Investment

The main airlines flying to Equatorial Guinea are Air France, Lufthansa and Iberia. Flights

are available twice a week from Johannesburg with a stopover in Kenya. Visitors require a

visa that is usually valid for 30 days. The visa is easily obtainable in Gabon and Cameroon.

Equatorial Guinea’s investment regime is relatively open, but there are many disincentives

to foreign investment. Although the Investment Code is fairly liberal, it remains extremely

bureaucratic in practice and open to manipulation. Foreign investors are required to pay

customs duties as well as income, turnover and business taxes.

The problem of corruption persists in the country. Various international aid organisations

have had to suspend their contracts with Equatorial Guinea because aid money was

not utilised in the intended manner. Foreign investors face the same risks if they do not

maintain tight control over the administration of their money.

270
Regulatory Policy Framework for Businesses
Both residents and non-residents may hold foreign exchange accounts, but approval

is required for resident accounts held domestically. In Equatorial Guinea, transactions,

payments and transfers to countries other than France, Monaco, members of the

Economic and Monetary Community of Central Africa (CEMAC), members of the West

African Economic and Monetary Union (WEAMU) and the Comoros, are subject to

restrictions.

A weak regulatory and judicial framework in the country, coupled with capacity problems

in the government, continues to hamper the process of creating value added in the

prominent mining, hydraulic, fishing and forestry sectors. Nevertheless, prospects for

improvements to the business environment and regulatory framework in the country are

relatively good owing to the imposition of higher taxes and the enactment of regional

regulations through CEMAC and the Organisation for the Harmonisation of Business Law

in Africa (OHADA). The establishment of a national agency for financial investigations

has also reduced the incidence of money laundering in the country and strengthened the

regulatory framework underpinning Equatorial Guinea’s financial system.

Opportunities for South African Businesses

The oil sector in Equatorial Guinea is the backbone of the country’s economy and offers

significant investment opportunities. The country is viewed as one of the most prominent

oil exporters globally.

Despite the dependence on oil, Equatorial Guinea has also focused on improving its

hydrocarbon sector, which is mainly concentrated on liquefied natural gas.

271
Gabonese
Republic
Geography and People

On the Equator, between the Republic of the Congo and Equatorial

Location
Guinea

Area 267 667km2

Capital city Libreville

Other major
Port-Gentil, Franceville, Oyem
cities

Climate Tropical; hot and humid

Natural Petroleum, natural gas, diamond, niobium, manganese, uranium, gold,

resources timber, iron ore, hydropower

Key ports Ports of Gamba, Libreville, Lucida Terminal and Gentil

Population 1 514 993 (2009 est.)

Population
1,934% (2009 est.)
growth rate
Life
53,11 years
expectancy

0 – 14 years: 42,1%
Age
15 – 64 years: 53,9%
distribution
65 years and over: 3,9%

Languages French (official), Fang, Myene, Nzebi, Bapounou/Eschira, Bandjabi

Bantu tribes, including four major tribal groupings (Fang, Bapounou,

Ethnic groups Nzebi, Obamba), other Africans and Europeans, (154 000, including 10
700 French and 11 000 persons of dual nationality)

Religions Christian (55% – 75%), animist, Muslim (less than 1%)

272
Economy
Current account (as % of GDP) 2,8%

Savings rate (% of GDP) 41,26% (2006)

Foreign direct investment flows US$20 million

Size of labour force 581 000 (2008 est.)

Unemployment 21% (2006 est.)

Coopération Financière en
Currency
Afrique Centrale Franc (XAF)

2007 2008

Average exchange rate (versus US$) 481,83 447,81 (est.)

GDP US$11,57 billion US$14,54 billion

GDP growth rate 5,6% 2,3%

GDP per capita (PPP) US$14 200 (est.) US$14 200 (est.)

GNI US$17,51 billion US$17,77 billion

GNI per capita (PPP) US$12 320 US$12 270

Inflation rate (consumer prices) 5% (est.) 5,3% (est.)

Growth and Structure of the Economy

Gabon’s economy is driven by its oil, forestry and mineral industries. The primary sector

contributes 60,6% of GDP, with the overwhelming majority of this contribution from the

oil sub-sector. Indeed, oil accounts for over 50% of GDP, contributes some 65,5% of

government revenues, and accounts for 82% of export revenue. The industry, agriculture

and forestry sectors provide the bulk of employment in the country and, as a result,

have an important role in reducing poverty. However, the contribution of these sectors

to national GDP remains minor: industry (4,8%), agriculture (3,2%) and forestry (1,2%).

Despite a relatively high average income from oil revenue, poverty levels in the country

273
remain high. A decline in oil production – as the country’s oil fields have become exhausted

– has underscored the need for Gabon to diversify its economy if it is to maintain economic

growth. Notably, in this regard, the mining sector has experienced rapid expansion, with

its contribution to GDP rising by 84% between 2007 and 2008. At the same time, the

share of the agricultural sector in national GDP is declining.

Trade
Exports and Imports 2007 2008

Total exports US$7,046 billion (est.) US$9,333 billion (est.)

Export growth rate - 3,2%

Total imports US$2,2 billion (est.) US$2,577 billion (est.)

Import growth rate - 4,0%

International Trade
Gabon’s main export commodity is crude oil (70%). Other key export commodities include

timber, manganese and uranium. The country’s major export partners are the USA

(25,4%), China (19,1%), Japan (10,2%), France (5,4%) and Spain (4%).

Gabon imports mainly machinery and equipment, foodstuffs, chemicals, and construction

materials. The country’s chief import partners are France (32,2%), the USA (11,1%),

China (5,4%), Belgium (4,7%), Cameroon (4,4%) and the Netherlands (4,2%).

Trade with South Africa

(Rands ‘000) 2005 2006 2007

Total exports 180 279 303 981 331 498

Total imports 682 297 1 156 380 177 259

Trade balance -502 018 -852 400 154 239

274
Bilateral Agreements with South Africa
• Agreement on Reciprocal Protection and Promotion of Investment (2005) [signed but
not yet tabled in Parliament];
• Bilateral Trade Agreement (2005) [signed but not yet tabled in Parliament]; and
• Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion
with respect to Taxes on Income (2005).

Barriers to Trade
Gabon’s weighted-average tariff rate was 16,5% in 2005. Tariff escalation, some import

bans, import and export taxes, inadequate administrative and trade capacity, and export

subsidies all add to trade costs in the country.

Business Climate
Infrastructure and Trade

Number of power outages in a typical month 7,82 (2009)

Average time to clear direct exports through customs (days) 3,82 (2009)

Average time to clear imports through customs (days) 10,34 (2009)

Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 158 Getting credit 135

Starting a business 152 Protecting investors 154

Dealing with construction

63 Paying taxes 107
permits

Employing workers 165 Trading across borders 135

Registering property 130 Enforcing contracts 150

Closing a business 137

275
Business Travel, Culture, Risk and Investment
South African Airways and Ethiopian Airlines operate direct flights between Johannesburg

and the Gabonese capital, Libreville. Other airlines with stopovers include Ethiopian

Airlines, Lufthansa, Kenya Airways, British Airways and Swiss Air. South African passport

holders travelling to Gabon for business or tourism purposes do not require a visa unless

their stay exceeds 30 days

Lightweight suits are recommended. French is the principal language used in business

circles, and translators and interpreters are available through the embassy. Gabon has

very strong business ties with France, although the USA and Japan also represent

significant economic partners.

Regulatory Policy Framework for Businesses

The OHADA, through its various Uniform Acts relating to commercial law, is the

legal cornerstone of Gabon’s trade policy. The Agency for the Promotion of Private

Investments, established in 2002 under the Investment Charter, provides information and

advice to investors and simplifies the administrative procedures required to establish new

businesses in Gabon. A free zone in Mandji was created in 2005 focusing on secondary

timber conversion and the shipbuilding and para-petroleum industries. It offers attractive

tax incentives, such as tax exemption for 10 years or tax credits relating to investments

and employment.

Foreign companies operating in Gabon are afforded the same rights as domestic firms

under the 1998 Investment Code, which conforms to the CEMAC investment regulations.

The mining, forestry, petroleum and tourism sectors have their own specific individual
investment codes that are designed to facilitate investment in these sectors through

customs and tax incentives. All businesses across all sectors are also protected from

expropriation or nationalisation without just prior compensation. To this end, while there

276
are not restrictions on foreign investment in Gabon, and no blanket requirements for

local participation in the capital of local entities, the state reserves the right to invest in

the equity capital of ventures established in strategic sectors such as the oil and mining

industries.

Foreign investors are permitted to open local bank accounts in CFA Francs, US Dollar

or Euro denominations. Furthermore, no legal restrictions are placed on the transfer of

funds associated with investments in Gabon, including remittances of investment capital,

earnings and profits.

Although Gabon has an incentive framework for investors and an ambitious privatisation

programmeme, the country’s overall business climate and regulatory policies present

some challenges to FDI. Some of the problematic elements include poor governance;

high factor costs of production, including costs related to basic inputs and/or their

inaccessibility; a small domestic market, as well as the closure of a number of sectors of

activity to investment due to the presence of de jure or de facto monopolies.

Opportunities for South African Businesses

Gabon’s advantageous geographical location, coupled with its political stability, make it

an attractive investment prospect, with the country already benefiting from significant

foreign investment from France, the USA and China. The most profitable investment

opportunities exist in civil engineering, natural resources, timber, telecommunications,

tourism and national parks.

277
Republic of Congo
Geography and People

Western Africa, bordering the South Atlantic Ocean, between Angola and
Location
Gabon

Area 342 000km2

Capital city Brazzaville

Other major
Pointe-Noire, Loubomo, Nkayi
cities

Tropical; rainy season (March to June); dry season (June to October);

Climate
persistent high temperatures and humidity

Natural Petroleum, timber, potash, lead, zinc, uranium, copper, phosphates,

resources gold, magnesium, natural gas, hydropower

Key ports Port of Pointe-Noire

Population 4 012 809 (2009 est.)

Population
2,754% (2009 est.)
growth rate
Life
54,15 years
expectancy
0 – 14 years: 45,9%
Age
15 – 64 years: 51,2%
distribution
65 years and over: 2,8%

French (official), Lingala and Monokutuba (lingua Franca trade languages),

Languages many local languages and dialects (of which Kikongo is the most
widespread)

Kongo (48%), Sangha (20%), M'Bochi (12%), Teke (17%), Europeans

Ethnic groups
and other (3%)

Religions Christian (50%), Animist (48%), Muslim (2%)

278
Economy
Current account (as % of GDP) -11,2%

Savings rate (% of GDP) 19,63% (2006)

Foreign direct investment flows US$2,6 billion

Size of labour force -

Unemployment -

Coopération Financière en
Currency
Afrique Centrale Franc (XFA)

2007 2008

Average exchange rate (versus US$) 483,6 447,81

GDP US$7,66 billion US$10,77 billion

GDP growth rate -1,6% 5,6%

GDP per capita (PPP) US$3 800 US$3 900

GNI US$9,6 billion US$11,6 billion

GNI per capita (PPP) US$2 700 US$3 090

Inflation rate (consumer prices) 2,7% (est.) 7,3% (est.)

Growth and Structure of the Economy

The Republic of Congo’s economy is a mixture of subsistence agriculture, an industrial

sector based largely on oil, and support services. The oil sector alone contributed some

67,3% of the country’s nominal GDP in 2008, with oil production reaching US$85 million.

Agriculture contributes 5,6% of national GDP and industry contributes 57,1%. The

major industries in the Congo include petroleum extraction, cement, lumber, brewing,

sugar, palm oil, soap, flour and cigarettes. Oil has supplanted forestry as the mainstay

of the economy, providing a major share of government revenues and exports. In the

early 1980s, rapidly rising oil revenues enabled the government to finance large-scale

279
development projects with annual GDP growth rates averaging 5%, then amongst the

highest rates in Africa. As a result of a recent unprecedented oil boom, the Republic of

Congo remains a strategic African producer. However, oil price fluctuations have resulted

in uncertain trends in GDP and export earnings.

Despite the dominance of the oil sector, value added in the country’s non-oil sectors

has grown steadily in recent years, spearheaded by growth in the value added of the

agricultural sector as well as improvements in infrastructure associated with the transport

of goods to the major towns and cities in the Republic of Congo. Despite very limited

diversification, the industrial sector has also registered strong growth in recent years on

the back of strong performance in primary industries including furniture production and

wood pulp.

Economic reforms in the country have been stunted by uneasy internal peace. In March

2006, the World Bank and the International Monetary Fund approved HIPC treatment for

the Republic of Congo.

Trade
Exports and Imports 2007 2008

Total exports US$5,808 billion (est.) US10,85 billion (est.)

Export growth rate - 9%

Total imports US$2,58 billion (est.) US$3,105 billion (est.)

Import growth rate - 1,7%

International Trade
Despite being subject to international criticism, the Republic of Congo has maintained

strategic bilateral trade relations with the USA, several European countries, including

France, and recently China.

280
The Congo remains a key exporter of lumber, plywood, sugar, cocoa, coffee and diamonds.

The USA (45,1%) is the country’s largest export partner, followed by China (32,3%) and

France (6%), respectively.

France (22,1%) is the country’s largest import partner. Other important import partners

include China (18,7%), the USA (5,6%), Italy (5,2%), India (5,1%) and Belgium (4,4%).

Major import commodities are capital equipment, construction materials and foodstuffs.

Trade with South Africa

(Rands ‘000) 2005 2006 2007

Total exports 371 312 427 636 499 049

Total imports 133 057 17 361 24 686
Trade balance 238 256 410 274 474 363

Bilateral Agreements with South Africa

• Co-operation Agreement (2003);
• Bilateral Trade Agreement (2005);
• Agreement for the Reciprocal Promotion and Protection of Investments (2005) [signed
but not yet ratified]; and
• Congo Memorandum of Understanding on Economic Co-operation (2010)

Barriers to Trade
The Republic of Congo has a maximum tariff rate of 30%, while its weighted average

tariff rate stood at 14,5% in 2007. The country’s complex trade policy regime includes a

number of fees and taxes and qualitative barriers to trade. In addition, restrictive import

licensing rules, burdensome and non-transparent bureaucracy, government export-

promotion programmemes, an inefficient customs services, and corruption add to the

cost of trade in the Republic of Congo.

281
Business Climate

Infrastructure and Trade

Number of power outages in a typical month 25,34 (2009)

Average time to clear direct exports through customs (days) -

Average time to clear imports through customs (days) 31,43 (2009)

Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 179 Getting credit 135

Starting a business 166 Protecting investors 154

Dealing with construction

69 Paying taxes 180
permits

Employing workers 169 Trading across borders 178

Registering property 169 Enforcing contracts 159

Closing a business 120

Business Travel, Culture, Risk and Investment

A passport, visa, and evidence of yellow fever vaccination are required for entry into the

Republic of Congo. Additional information on entry requirements may be obtained from

the Embassy of the Republic of the Congo. There are two flights available per week

between Johannesburg and Brazzaville operated by Inter Air Airlines.

Knowledge of French is essential as there are no professional translators available in the

country. The best months for business visits are January to March and June to September.

282
Although the Republic of the Congo is still recovering from a civil war, there have been

no serious episodes of unrest or violence since the March 2003 peace accord. Continued

security awareness, however, remains a key consideration for all visitors and security

concerns remain a potential risk for investors.

Regulatory Policy Framework for Businesses

The Republic of Congo’s institutional environment presents several challenges to

business operations. The country’s financial sector, for example, is underdeveloped and

weak governance and poor infrastructure constrains business activity. The country’s

performance lags behind SSA and lower-middle-income group averages on all three

governance indicators: regulatory quality, rule of law and control of corruption. In addition,

the costs associated with launching a business in the country are high, as are the costs

associated with closing a business.

Taxes in the Republic of Congo are also high. The top income tax rate stands at 50%, and

the top corporate tax rate at 38%. Businesses may also be subject to VAT, tax on rental

rates and an apprenticeship tax.

In the area of services, banking activities are subject to the common CEMAC regulatory

framework.

Opportunities for South African Businesses

The most prominent private investment opportunities in the Republic of Congo can be

found in the country’s mining industry. This is due to the availability of untapped mining

resources and mineral-extraction possibilities in the country.

283
Democratic Republic
of São Tomé e Príncipe
Geography and People

Western Africa, islands in the Gulf of Guinea, straddling the Equator,

Location
west of Gabon

Area 964km2

Capital city São Tomé

Other major
Neves, Sant’Ana, Trindade
cities

Climate Tropical; hot, humid; one rainy season (October to May)

Natural
Fish, hydropower
resources

Key ports Port of São Tomé

Population 212 679 (2009 est.)

Population
3,093% (2009 est.)
growth rate
Life
68,32 years
expectancy
0 – 14 years: 46,9%
Age
15 – 64 years: 49,7%
distribution
65 years and over: 3,5%

Languages Portuguese (official)

Mestico, Angolares (descendants of Angolan slaves), Forros

(descendants of freed slaves), Servicais (contract labourers from
Ethnic groups
Angola, Mozambique, and Cape Verde), Tongas (children of servicais
born on the islands), Europeans (primarily Portuguese)

Catholic (70,3%), Evangelical (3,4%), New Apostolic (2%), Adventist

Religions
(1,8%), other (3,1%), none (19,4%)

284
Economy
Current account (as % of GDP) -31,1%

Savings rate (% of GDP) -

Foreign direct investment flows US$33 million

Size of labour force 52 490 (2007)

Unemployment -

Currency Dobra (STD)

2007 2008

Average exchange rate (versus US$) 13 700 14 900 (est.)

GDP US$0,14 billion US$0,17 billion

GDP growth rate 6% 5,8%

GDP per capita (PPP) US$1 300 (est.) US$1 300 (est.)

GNI US$0,27 billion US$0,29 billion

GNI per capita (PPP) US$ 1 710 US$1 780

Inflation rate (consumer prices) 18% (est.) 26% (est.)

Growth and Structure of the Economy

The population of this two-island republic is heavily concentrated in São Tomé. Plantation

agriculture, particularly cocoa and coffee, dominates the economy, although only about

15% of the workforce is engaged in agricultural activities. Cocoa accounts for 95% of the

country’s total exports. The country has a narrow productive base and the main sectors

of the economy are light construction, textiles, soap, beer, fish processing and timber.
Agriculture contributes about 14,6% of GDP, industry about 14,6% and the services

sector about 70,8% of GDP.

285
São Tomé e Príncipe shares offshore oil fields with Nigeria. While yet to be exploited, these

fields are thought to hold billions of barrels of oil. In São Tomé, overall progress in economic

and structural reforms has been marginal and has held back the creation of a business

environment that would be conducive to entrepreneurial activity and sustained growth.

The two islands comprising São Tomé e Príncipe are characterised by an uncertain

political and economic outlook and a business environment that is not conducive to

private-sector development. The country’s external accounts are in deficit, and the trade

balance suffers from rising imports, not only of oil but also of capital goods necessary for

oil exploration. The upward trend in cocoa exports has not been sufficient to offset import

growth. In this context, financing needs remain high but are nonetheless largely covered

by the growth of FDI in the country.

Trade
Exports and Imports 2007 2008

Total exports US$7 million (est.) US$8 million (est.)

Export growth rate - -

Total imports US$65 million (est.) US$87 million (est.)

Import growth rate - -

International Trade
São Tomé e Príncipe’s primary export commodities are cocoa (80%), copra, coffee and

palm oil. The country’s main export partners are Japan (77,5%), Belgium (7,7%) and the

Netherlands (6,4%).

The country’s primary imports include machinery and electrical equipment, food products

and petroleum products. São Tomé e Príncipe’s main import partners are Portugal

(55,8%), Belgium (9,6%) and Japan (9,3%). Domestic food crop production is inadequate

to meet local consumption, so the country imports some of its food.

286
Trade with South Africa

(Rands ‘000) 2005 2006 2007

Total exports 0 0 0

Total imports 814 440 910 698 927 795

Trade balance -814 440 -910 698 -927 795

Bilateral Agreements with South Africa

• None

Barriers to Trade
São Tomé e Príncipe’s weighted-average tariff rate was 15% in 2007. Some high tariffs,

selected services market access barriers, certain import restrictions, import taxes and

fees, and some limitations on regulatory and trade capacity add to trade costs in the

country.

Business Climate
Infrastructure and Trade

Number of power outages in a typical month -

Average time to clear direct exports through customs (days) -

Average time to clear imports through customs (days) -

287
Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 180 Getting credit 167

Starting a business 140 Protecting investors 154

Dealing with construction

116 Paying taxes 160
permits

Employing workers 180 Trading across borders 90

Registering property 156 Enforcing contracts 179

Closing a business 183

Business Travel, Culture, Risk and Investment

Air Portugal and some regional airlines fly to the island. Improvement in the country’s

political stability has been gradual, and the slow implementation of economic and

structural reforms has created a degree of risk for potential private-sector investors.

Regulatory Policy Framework for Businesses

While the government of São Tomé e Príncipe has a positive attitude toward foreign

investment, current business regulations present foreign investors with significant

bureaucratic and procedural hurdles. However, a new investment code promulgated

in the second half of 2007 has made the business environment more attractive to

foreign investors. The Investment Code of 2007 provides for both public and mixed-

capital investments, allowing foreign investment in every sector of economic activity

except for limited areas that are restricted to the state (activities related to the military

and paramilitary sectors and the operations of the Central Bank). The new Investment

Code replaced the Investment Code of 1992 and has a three-tiered incentive scheme for

investors. It also sets forth a new legal framework under which only investments above

US$250 000 are eligible for benefits and guarantees. Investments below US$250 000

are no longer eligible for incentives and benefits, but are protected against expropriation.

288
Qualifying investment projects will benefit from fiscal incentives that include the use of

state-owned buildings and/or land for the duration of investment projects, as well as the

provision of administrative services to facilitate the process of obtaining access to state-

owned buildings and land.

Significant tax reforms have been implemented in São Tomé e Príncipe. The country now

boasts a tiered income tax scheme based on five income brackets that are subjected

to taxation ranging from zero to a top rate of 25%. The top corporate tax rate has been

reduced from 45% to 25%.

Opportunities for South African Businesses

The islands that make up São Tome e Príncipe are often referred to as the ‘paradise at

the Equator’ and pose numerous opportunities for foreign investors in the development

the tourism industry and activities related to hospitality and holiday resorts. Attractive

investment opportunities also exist in the shipping services, real estate development,

aquatic and fisheries, and logistic services industries.

289
WEST AFRICA
• Benin • Liberia
• Burkina Faso • Mali
• Cape Verde • Niger
• Côte d’Ivoire • Nigeria
• Gambia • Senegal
• Ghana • Sierra Leone
• Guinea • Togo
• Guinea-Bissau

290
Senegal

Mali
Niger
Cape Verde

Burkina Faso
Gambia

Nigeria

Guinea-Bissau
Côte d’Ivoire

Sierra Leone
Guinea Benin
Liberia Ghana Togo

291
Republic of Benin
Geography and People

Location Western Africa, bordering the Bight of Benin, between Nigeria and Togo

Area 112 622km2

Capital city Porto of Novo

Other major
Cotonou, Godomey, Parakou
cities

Climate Tropical; hot, humid in south; semi-arid in north

Natural
Small offshore oil deposits, limestone, marble, timber
resources

Key ports Port of Cotonou

Population 8 791 832 (2009 est.)

Population
2,977% (2009 est.)
growth rate

Life
59 years
expectancy

0 – 14 years: 45,2%
Age
15 – 64 years: 52,1%
distribution
65 years and over: 2,6%

French (official), Fon and Yoruba (most common vernaculars in south),

Languages
tribal languages (at least six major ones in north)

Fon and related (39,2%), Adja and related (15,2%), Yoruba and related
(12,3%), Bariba and related (9,2%), Peulh and related (7%), Ottamari
Ethnic groups
and related (6,1%), Yoa-Lokpa and related (4%), Dendi and related
(9,5%), other (1,6% – including Europeans), unspecified (2,9%)

Religions Christian (42,8%), Muslim (24,4%), Vodoun (17,3%), other (15,5%)

292
Economy
Current account (as % of GDP) -9,7%

Savings rate (% of GDP) -

Foreign direct investment flows US$120 million

Size of labour force 3,662 million (2007 est.)

Unemployment -

Communauté Financière
Currency
Africaine Franc (XOF)

2007 2008

Average exchange rate (versus US$) 493,51 (est.) 447,81 (est.)

GDP US$5,55 billion US$6,71 billion

GDP growth rate 4,6% 5%

GDP per capita (PPP) US$1 500 (est.) US$1 500 (est.)

GNI US$11,84 billion US$12,66 billion

GNI per capita (PPP) US$1 410 US$1 460

Inflation rate (consumer prices) 1,3% (est.) 7,9% (est.)

Growth and Structure of the Economy

Benin’s economy is primarily dependent on subsistence agriculture, cotton production and

regional trade. Although the country’s economy is still underdeveloped, it has improved

remarkably since 1991. The agricultural sector contributes one third of the country’s total

GDP, while the services sector accounts for 52,3% of GDP. Industry is comparatively less

prominent, contributing some 14,5% of the country’s GDP.

293
Real output in the economy has grown at an average rate of 5% in the past seven years,

and the country has experienced an upturn in economic growth since 2006 as a result

of efforts by the government to revitalise the country’s construction sector, develop crop

production and improve the supply of electricity. However, much of this growth has

been offset by rapid population growth. Nevertheless, economic growth is forecasted to

remain comparatively high at 5,6% in 2010, despite pressure on global food prices which

could have a strong negative effect on the country’s significant agricultural sector. The

Benin government plans to increase economic growth further by attracting more foreign

investments, promoting tourism, facilitating development of new food processing systems

and encouraging new ICT.

Trade
Exports and Imports 2007 2008

Total exports US$819 million US$1,127 billion

Export growth rate - 4,8%

Total imports US$1,194 billion US$1,843 billion

Import growth rate - 7,5%

International Trade
The main export commodities in Benin are cotton, cashews, shea-butter, textiles, palm

products and seafood. Benin’s main export partners include China (15,6%), India (12%),

Japan (8,5%), Niger (4,9%), the USA (4,6%) and Nigeria (4,3%). Benin primarily imports

foodstuffs, capital goods and petroleum products. The country’s most prominent import

partners include China (35,9%), the USA (13,2%), Thailand (6,5%), France (6,5%),

Malaysia (6,5%) and India (4,4%).

294
Trade with South Africa

(Rands ‘000) 2007 2008 2009

Total exports 86 120 163 974 175 703

Total imports 15 012 25 884 35 168

Trade balance 71 108 138 090 140 535

Bilateral Agreements with South Africa

• Co-operation Agreement (2003); and
• Joint Communiqué (2007).

Barriers to Trade
Benin is a member of the WEAMU and has adopted the maximum tariff of 20%. The

country has been implementing the WEAMU Common External Tariff (CET) since 2000.

Non-tariff barriers in the country remain high. In particular, corruption among police and

immigration and customs officers continues to hinder and render costly the importation of

goods by sea, air and land. In addition, restrictions exist on the importation of some goods

to authorised companies, and there are bans on selected imports in Benin.

Business Climate
Infrastructure and Trade

Number of power outages in a typical month 13,89 (2009)

Average time to clear direct exports through customs (days) 9,63 (2009)

Average time to clear imports through customs (days) 32,99 (2009)

295
Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 172 Getting credit 150

Starting a business 155 Protecting investors 154

Dealing with construction

134 Paying taxes 167
permits

Employing workers 139 Trading across borders 128

Registering property 126 Enforcing contracts 177

Closing a business 133

Business Travel, Culture, Risk and Investment

Several airlines offer flights from South Africa to Benin, landing at the main international

airport in Cotonou, a city on the coast. The country operates domestic flights to airports

at Abomey, Parakpou, Natitingoua and Kandi. South African citizens do not require an

entry visa to Benin for stays that do not exceed 30 days. However, malaria, yellow fever,

meningitis and cholera vaccination cards are required when entering the country.

French is the primary language used for conducting business in Benin. Punctuality is

regarded as very important in business meetings. For businesses and investors seeking

to conduct business near the Nigerian border, it is important to note that, as a result of a

ban on the export of a number of products from Benin to Nigeria, increased smuggling

and criminality has taken place in the border region in recent years.

Benin’s economy is heavily dependent on the success of its neighbour Nigeria. The

country’s membership of the CFA Franc Zone offers reasonable currency stability, as well

as access to French economic support.

296
Regulatory Policy Framework for Businesses
The establishment of a one-stop-shop (guichet unique) responsible for processing all

paperwork and registering a business has simplified the process of starting a business

in Benin. Despite this, complex regulations relating to the procedures involved in starting

a business and dismissing staff and complexities related to staff contracts represent

constraints on the private sector. For this reason, it is recommended that foreign investors

hire a local notary for assistance in any company start-up processes.

The country has a single taxpayer identification system that has been extended to all

importers and exporters as well as all major companies operating in Benin. Furthermore,

the country has put in place a new information and technology system linking the tax

department data to the customs data in order to expedite data processing at its ports.

The government introduced a number of tax reductions in the 2009 budget, with notable

reductions on the taxation of profits. In addition, the free industrial zone has been extended

to include ICT firms and financial and banking institution holdings.

The right to own and transfer private property is guaranteed under Beninese law. The

national law also prevents the state from attempting to nationalise enterprises operating in

the country. However, the government is permitted to seize property by eminent domain,

but is required to pay compensation to the owners should it do so. Benin is a member of

the OHADA, and has adopted the organisation’s code for governing commercial disputes

and bankruptcies. Notably, there is no commercial court system in Benin, with commercial

cases handled by civil courts.

A welcoming regulatory policy framework is in place for foreign investors in the form

of the country’s 2008 Investment Code. The Code contains a number of incentives for

foreign investors, including tax reductions based on the level and type of investment; and,

depending on the amount of the investment, tax exemptions on profits, exports of finished

297
products or imports of industrial equipment. Specific criteria are in place for investors

to be eligible to qualify for these incentives and include employing a minimum number

of Beninese nationals, safeguarding the environment and complying with nationally

accepted accounting standards.

Opportunities for South African Businesses

Benin is a politically stable country, with a bilingual, well-educated labour force. These

factors, coupled with the fact that the country shares its borders with Nigeria, makes it

attractive to outside investment.

The most prominent opportunities for business can be found in Benin’s agri-business

sector and, as a location for international offshore companies offering call-back services,

offshore secretarial and accounting services.

The country also has access to good arable land, which increases the economic benefit

posed by agri-business and crop transformation plants.

298
299
Burkina Faso
Geography and People

Location Western Africa, north of Ghana

Area 274 200km2

Capital city Ouagadougou

Other major
Bobo-Dioulasso, Koudougou, Banfora
cities

Climate Tropical; warm, dry winters; hot, wet summers

Natural Manganese, limestone, marble, small deposits of gold, phosphates,

resources pumice, salt

Key ports Burkina Faso is landlocked

Population 15 746 232 (2009 est.)

Population
3,103% (2009 est.)
growth rate

Life
52.95 years
expectancy

0 – 14 years: 46,2%
Age
15 – 64 years: 51,3%
distribution
65 years and over: 2,5%

French (official), native African languages belonging to Sudanic family

Languages
spoken by 90% of the population

Mossi (over 40%), other (approximately 60%) (includes Gurunsi, Senufo,

Ethnic groups
Lobi, Bobo, Mande, and Fulani)

Muslim (50%), indigenous beliefs (40%), Christian (mainly Roman

Religions
Catholic) (10%)

300
Economy
Current account (as % of GDP) -10,8%

Savings rate (% of GDP) 5,9%

Foreign direct investment flows US$137 million

Size of labour force 6,668 million

Unemployment 77% (2004 est.)

Communauté Financière
Currency
Africaine Franc (XOF)

2007 2008

Average exchange rate (versus US$) 493,51 447,81 (est.)

GDP US$ 6,77 billion US$8,12 billion

GDP growth rate 3,6% 5%

GDP per capita (PPP) US$1 200 (est.) US$1 200 (est.)

GNI US$16,51 billion US$17,63 billion

GNI per capita (PPP) US$1 120 US$1 160

Inflation rate (consumer prices) -0,2% (est.) 10,7% (est.)

Growth and Structure of the Economy

Burkina Faso is landlocked and has very limited natural resources and a weak industrial

base. Industry is predominantly government controlled and the major industries include

cotton lint, beverages, agricultural processing, soap, cigarettes, textiles and gold. The

majority of the population (90%) is engaged in subsistence agriculture. Indeed, despite

being vulnerable to harsh climatic conditions, agriculture (29,1%) remains one of the

major contributors to the country’s GDP. Cotton is the key crop produced within Burkina

Faso and rising world cotton prices have contributed significantly to GDP growth. Other

301
prominent contributors to GDP are services and industry accounting for 51% and 19,9%

of total GDP, respectively.

Exports and economic growth have both increased as a result of improvements to the

government’s development programme in response to the devaluation of the CFA Franc

in January 1994. The economy is expected to grow at 4,2% in 2010 driven by declining

raw material prices and corresponding reductions in production costs, an anticipated

shift in revenue to the country’s rural areas as a result of specific support measures

implemented by the government for agricultural production and small-scale producers,

and the growing strength of the country’s mining sector.

Despite the relatively robust growth prospects, the Burkina Faso economy remains heavily

dependent on cotton production, which represents the country’s primary export earner.

Trade

Exports and Imports 2007 2008

Total exports US$618 million US$544 million

Export growth rate - 4,8%

Total imports US$1,221 billion US$1,343 billion

Import growth rate - 6,2%

International Trade
Burkina Faso’s main export partners include Singapore (17%), Belgium (12,9%), China

(11,3%), Thailand (9,1%), Ghana (7%), Niger (5,2%) and Denmark (4,9%). The country

exports mainly cotton, livestock and gold. Capital goods, foodstuffs and petroleum are

the primary import commodities in Burkina Faso. The country’s main import partners are

302
mostly African countries – Côte d’Ivoire (26,7%), Togo (7,4%), and Libya (4,2%). Only one

European country, France (18,4%), is a key import partner.

Trade with South Africa

(Rands ‘000) 2007 2008 2009

Total exports 63 758 109 815 154 096

Total imports 42 753 284

Trade balance 63 717 109 062 153 812

Bilateral Agreements with South Africa

• None

Barriers to Trade
Although the import and export of goods is predominantly free in Burkina Faso, some

goods may be subject to import title or require the Minister of Trade’s authorisation.

Increasing corruption, coupled with a weak legal system in Burkina Faso, represent

some of the less visible barriers to trade in the country. Other barriers to trade include

supplementary taxes on imports, targeted bans, licences and other non-tariff barriers.

Business Climate
Infrastructure and Trade

Number of power outages in a typical month 10,88 (2009)

Average time to clear direct exports through customs (days) 7,40 (2009)

Average time to clear imports through customs (days) 16,38 (2009)

303
Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 147 Getting credit 150

Starting a business 115 Protecting investors 147

Dealing with construction

80 Paying taxes 144
permits

Employing workers 82 Trading across borders 176

Registering property 114 Enforcing contracts 110

Closing a business 112

Business Travel, Culture, Risk and Investment

Flights to Burkina Faso are mainly served by Air Afrique, Air France and Brussels Airlines

airlines. The country has a railway line connected to the port of Abidjan, Côte d’Ivoire. The

country’s network of towns is connected through paved primary roads. South Africans

require a visa to travel to Burkina Faso. Temporary South African passports are accepted

when entering the country.

Suits are recommended for visits to the government and official business; otherwise a

shirt and tie should suffice. Most officials prefer to wear national dress. French is the

predominant language spoken in business circles and, if the visitor does not have a

command of French, interpreter services are available at the British Embassy.

There are few official restrictions on investment and the country’s investment code

guarantees equal treatment of foreign and domestic investors. One criterion is, however,

that new investments be approved by the Ministry of Industry, Commerce and Mines.

Foreign investment is mainly hindered by poor infrastructure, a weak legal system and

growing corruption.

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Regulatory Policy Framework for Businesses
All residents of Burkina Faso are required to obtain government approval for capital

investments abroad. Importantly for foreign investors, supporting documents are required

for payments and transfers of specified amounts and proceeds from countries that are not

part of the WEAMU, and are to be surrendered to an authorised dealer.

Improvements have been made to the framework governing the establishment of

businesses and land registration processes in Burkina Faso. Specifically, the time taken

to register a company has been shortened by the transfer of one-stop shops to the Burkina

Faso business centre and the creation of business registration centres. Furthermore,

legislation governing the creation of one-stop shops for the registration of land title deeds

was adopted in 2008; and centres for streamlining the building permit process in the

country have been established to reduce the time taken to obtain building permits to a

maximum of 90 days. These measures have been complemented by the introduction of

the 2008 Finance Law, which includes the implementation of tax measures – including the

elimination of the registration formality and stamp duty for company articles of association,

and reducing the transfer duty on real estate transactions – that simplify the procedures

and reduce the costs associated with obtaining title deeds in the country.

Opportunities for South African Businesses

Burkina Faso is one of the poorest countries in the world and is heavily reliant on

subsistence agriculture. Low rainfall patterns, poor soil, lack of adequate communications

and other infrastructure make doing business in the country complex. Despite the

limitations posed by the population’s extremely low income levels, and the country’s weak

infrastructure, potential investment opportunities in the economy of Burkina Faso exist

in food processing and textiles manufacturing. In addition, the gold mining and cotton

industries in Burkina Faso have been increasing in value terms in recent years.

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Republic of
Cape Verde
Geography and People

Western Africa, group of islands in the North Atlantic Ocean, west of

Location
Senegal

Area 4 033km2

Capital city Praia

Other major
Mindelo, Santa Maria, Assomada
cities

Climate Temperate; warm, dry summer; precipitation meagre and very erratic

Natural
Salt, basalt rock, limestone, kaolin, fish, clay, gypsum
resources

Porto Grande, Port Praia Palmeira, Port Novo, Port Tarrafal, Port Inglês,
Key ports
Port Sal-Rei

Population 429 474 (2009 est.)

Population
0,561% (2009 est.)
growth rate

Life
71.61 years
expectancy

0 – 14 years: 32,5%
Age
15 – 64 years: 58,5%
distribution
65 years and over: 6,4%

Languages Portuguese, Crioulo (a blend of Portuguese and West African words)

Ethnic groups Creole (mulatto) (71%), African (28%), European (1%)

Roman Catholic (infused with indigenous beliefs), Protestant (mostly

Religions
Church of the Nazarene)

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Economy
Current account (as % of GDP) -18,5%

Savings rate (% of GDP) 27,63%

Foreign direct investment flows US$209 million

Size of labour force 196 100 (2007 est.)

Unemployment 21% (2000 est.)

Currency Cape Verdean Escudos (CVE)

2007 2008

Average exchange rate (versus US$) 81,24 73,84

GDP US$1,51 billion US$1,74 billion

GDP growth rate 7,8% 5,9%

GDP per capita (PPP) US$3 600 US$3 800

GNI US$1,58 billion US$1,72 billion

GNI per capita (PPP) US$3 220 US$3 450

Inflation rate (consumer prices) 4,4% 6,8%

Growth and Structure of the Economy

Cape Verde has a very limited natural resource base, including a serious shortage of

water. The country’s economy is mainly service driven with the services sector contributing

74,4% to total GDP. Despite the fact that almost two-thirds of the population reside in rural

areas, agriculture contributes only 9,1% to the county’s GDP. Remittances are a crucial

source of income and supplement GDP by more than 20%.

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The country runs on a high annual trade deficit that is financed through remittances from

abroad and foreign aid. Economic reforms geared towards boosting economic growth

in Cape Verde have focused on improving the private sector and attracting foreign

investment.

Despite having an economy that is structurally small and insular, and the presence of

widespread pressures from volatile international food and fuel prices, Cape Verde has

managed to sustain strong economic growth in recent years. Much of this growth has

been fuelled by growth in the country’s tourism industry, which represents the country’s

most important source of foreign currency. The strong economic performance has

contributed to the country graduating from the status as a least-developed country (LDC)

to a middle-income country (MIC) on the United Nation’s scale in 2008. However, despite

this strong growth performance, the country remains heavily dependent on international

donor support.

Trade

Exports and Imports 2007 2008

Total exports US$76,5 million US$105 million

Export growth rate - 14,9%

Total imports US$743,6 million US$864 million

Import growth rate - 12,1%

International Trade
Cape Verde’s economic growth is primarily export driven. The main export commodities

include fuel, shoes, garments, fish and hides. The country’s main export partners are

Japan (37,5%), Spain (28,5%), Portugal (17,5%) and Morocco (4,8%).

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Portugal (40,3%), the Netherlands (11,8%), Spain (6,7%), the United Kingdom (6,5%),

Côte d’Ivoire (4,6%) and Brazil (4,1%) are Cape Verde’s key import partners. The country

mainly imports include foodstuffs, industrial products, transport equipment and fuels.

Trade with South Africa

(Rands ‘000) 2007 2008 2009

Total exports 15 863 14 818 7 045

Total imports 41 252 658

Trade balance 15 823 14 567 6 387

Bilateral Agreements with South Africa

• None

Barriers to Trade
All imports are subject to a general customs tax and non-priority goods are subject to

a consumption tax. Furthermore, the Importation of pharmaceuticals in Cape Verde is

restricted to public institutions.

In general terms, import restrictions, together with non-tariff barriers such as inadequate

regulatory capacity, non-transparent sanitary and phytosanitary regulations, and

expert incentives all add to trade costs. Fuels and lubricants, tobacco, and chemical-

pharmaceutical products are subject to special rules and imported under an exclusive

regime by select enterprises.

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Business Climate
Infrastructure and Trade

Number of power outages in a typical month 6,28 (2009)

Average time to clear direct exports through customs (days) -

Average time to clear imports through customs (days) 20,51 (2009)

Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 146 Getting credit 150

Starting a business 136 Protecting investors 132

Dealing with construction
83 Paying taxes 110
permits
Employing workers 167 Trading across borders 58

Registering property 126 Enforcing contracts 38

Closing a business 183

Business Travel, Culture, Risk and Investment

Cape Verde’s main international airport is located on the island of Sal and there is also

another international airport at Praia. Flights from South Africa are available on a number

of airlines, all of which involve two connecting flights from Johannesburg. All nationals,

with the exception of those of West African countries, require visas in order to enter the

country.

Business risks in Cape Verde are high owing to the fact that the country is relatively

unknown as a trading destination. All correspondence should be in English or French.

Most of Cape Verde’s business links are with Portugal.

Despite these risks, foreign investment in the country has been simplified, and privatisation

has been opened to foreign investors. In an effort to promote foreign investment, the

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government of Cape Verde offers a number of tax exemptions. The government also

provides a number of warranties including, among others, protection of foreign investment

related estates and rights, the transfer abroad of dividends and profits, and opening of

hard-currency bank accounts.

Regulatory Policy Framework for Businesses

The government reserves shares for Cape Verdean investors and encourages joint

ventures with local investors. Both residents and non-residents are permitted to hold

foreign exchange accounts. Payments and transfers are subject to controls.

Incentives provided to businesses in Cape Verde include, among others, income tax

reduction for the first 5 years; customs duties exemption on raw materials, finished goods

and intermediate goods for use in the production of export-oriented goods and services;

duty-free imports; excise tax and emoluments on export-oriented value-added goods and

materials produced; and no restrictions on export of products.

In July 2008, significant revisions were made to the country’s regulatory framework,

including the abolishment of capital requirements, simplification of business registration

procedures and revisions to fiscal regimes for import-export businesses. However, labour

reforms approved in 2008 have served to curtail the use of fixed-term contracts and

increased notice periods to 45 days, thereby affecting labour flexibility in Cape Verde.

Opportunities for South African Businesses

The most prominent opportunities for investment in Cape Verde can be found in the civil

construction, tourism, fishing, graphics, services and agriculture sectors. Furthermore,

the process of privatisation has created additional investment opportunities.

311
Republic of
Côte d’Ivoire
Geography and People

Western Africa, bordering the North Atlantic Ocean, between Ghana and
Location
Liberia

Area 322 463km2

Capital city Yamoussoukro

Other major
Abidjan, Bouakè, Daloa
cities

Tropical along coast, semi-arid in far north; three seasons – warm and
Climate dry (November to March), hot and dry (March to May), hot and wet (June
to October)

Petroleum, natural gas, diamonds, manganese, iron ore, cobalt, bauxite,

Natural
copper, gold, nickel, tantalum, silica sand, clay, cocoa beans, coffee,
resources
palm oil, hydropower

Key ports Ports of Abidjan and San Pedro

Population 20 617 068 (2009 est.)

Population
2,133% (2009 est.)
growth rate

Life
55,45 years
expectancy

0 – 14 years: 40,6%
Age
15 – 64 years: 56,6%
distribution
65 years and over: 2,9%

Languages French (official), 60 native dialects with Dioula the most widely spoken

Akan (42,1%), Voltaiques or Gur (17,6%), Northern Mandes (16,5%),

Ethnic groups Krous (11%), Southern Mandes (10%), other (2,8% – includes 130 000
Lebanese and 14 000 French)

Religions Muslim (38,6%), Christian (32,8%), indigenous (11,9%), none (16,7%

312
Economy
Current account (as % of GDP) 24,6%

Savings rate (% of GDP) 14,46%

Foreign direct investment flows US$353 million

Size of labour force 7,346 million (2008 est.)

Unemployment 40 – 50% (est.)

Communauté Financière
Currency
Africaine Franc (XOF)

2007 2008

Average exchange rate (versus US$) 481,83 447,81 (est.)

GDP US$19,82 billion US$23,51 billion

GDP growth rate 1,6% 2,3%

GDP per capita (PPP) US$1 700 (est.) US$1 700 (est.)

GNI US$31,11 billion US$32,59 billion

GNI per capita (PPP) US$1 550 US$1 580

Inflation rate (consumer prices) 1,9% 6,3%

Growth and Structure of the Economy

Oil and gas production have become leading engines of economic activity in Côte d’Ivoire

since 2006. Indeed, earnings from oil and refined products totalled US$1,3 billion in 2006,

while cocoa-related revenues amounted to US$1 billion during the same period. The

primary sector dominates the Ivorian economy and contributed 28,1% of national GDP in

2008. About two-thirds of Côte d’Ivoire’s population is engaged in agriculture. The country

is one of the world’s leading producers and exporters of coffee, cocoa beans, and palm

oil. Cocoa production continues to be one of the main contributors to the national GDP,

313
and the economy is, to some extent, sensitive to both changes in the international prices

of cocoa and other commodities, and to weather conditions. The secondary sector’s

share in GDP stands at approximately 22%, while the tertiary sector accounted for 36,6%

of national GDP in 2008.

Côte d’Ivoire’s economy was adversely affected by an UN-imposed arms embargo following

the killing of French-speaking peacekeeping forces in 2004. Political turmoil continues to

affect the country’s economy and has resulted in the loss of foreign investment and slow

economic growth. Despite this, growth in the economy has demonstrated renewed vigour

since 2007, primarily as a result of strong performance in the construction sector and

increasing cocoa exports. Indeed, in 2008, growth in the Ivorian economy passed the 2%

threshold for the first time since 2002.

Trade

Exports and Imports 2007 2008

Total exports US$8,476 billion US$10,09 billion

Export growth rate - 1,5%

Total imports US$5,932 billion US$6,76 billion

Import growth rate - 3,3%

International Trade
Côte d’Ivoire has three European export partners, namely Germany (10,9%), the

Netherlands (9,7%) and France (6,4%). The country’s other key export partners are the

USA (10,1%), Nigeria (9,3%) and Burkina Faso (4%). Its main export commodities are

cocoa, coffee, timber, petroleum, cotton, bananas, pineapples, palm oil and fish. The

country exports substantial crude oil and natural gas to Ghana, Togo, Benin, Mali and

Burkina Faso through its offshore oil and gas production.

314
Côte d’Ivoire imports mainly fuel, capital equipment and foodstuffs. The country’s key

import partners are Nigeria (31,5%), France (14,9%) and China (7,2%).

The country has a free trade zone in Abidjan and is also a contracting party to the International

Convention on the Harmonised Commodity Description and Coding System.

Trade with South Africa

(Rands ‘000) 2007 2008 2009

Total exports 297 834 321 131 452 340

Total imports 105 354 122 604 186 192

Trade balance 192 480 198 527 266 148

Bilateral Agreements with South Africa

• Letter of Intent regarding the Promotion and Reciprocal Protection of Investments
(1998).

Barriers to Trade
Import fees and taxes, some services market access restrictions, minimum price floors

for some imports, import prohibitions and restrictions, import authorisation requirements

for certain goods, corruption in customs and government procurement, and weak

enforcements of intellectual property rights all add to trade costs in Côte d’Ivoire.

Furthermore, importers that are intending to import non-prohibited goods need an import

permit or a certificate of intent to import issued by the Ministry of Commerce and Industry.

Some import commodities are subject to annual volume or value quotas.

315
Business Climate
Infrastructure and Trade

Number of power outages in a typical month 4,50 (2009)

Average time to clear direct exports through customs (days) 16,56 (2009)

Average time to clear imports through customs (days) 31,22 (2009)

Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 168 Getting credit 150

Starting a business 172 Protecting investors 154

Dealing with construction

167 Paying taxes 152
permits
Employing workers 129 Trading across borders 160

Registering property 145 Enforcing contracts 127

Closing a business 71

Business Travel, Culture, Risk and Investment

There are several airlines serving Côte d’Ivoire. It is recommended that visitors confirm

return flights 72 hours in advance. South African passport holders travelling to Côte

d’Ivoire require a visa. Temporary South African passports are accepted.

French is predominantly used in business circles, although executives in larger businesses

may speak English. Translators are generally available. Punctuality is expected; and

business cards are essential and should be handed to each person that is associated

with potential business transactions. It is common for business visitors to be entertained

by local hosts in a hotel or restaurant. Lightweight suits should be worn to business

meetings. Political instability remains a significant disincentive to potential investment.

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Regulatory Policy Framework for Businesses
Côte d’Ivoire promotes foreign investment and investments are not subjected to any

screening process. The country has demonstrated a strong commitment to transforming

the country’s private sector as a means to drive future economic growth. To this end,

the government has implemented significant tax relief measures that have included a

reduction in the tax on income derived from trade and manufacturing (from 35% to 27%)

and a reduction in the minimum fixed tax level in early 2008. Reforms to the institutional,

regulatory and legal policy frameworks have included the introduction of a programme to

support entrepreneurship. Despite these reforms, corporate taxes continue to remain quite

restrictive, and have hindered private investment in the country. In addition, administrative

procedures are complex, and there is currently no legal framework for small and medium

enterprises.

Opportunities for South African Businesses

As one of the largest economies in SSA, Côte d’Ivoire possesses considerable market

potential on the continent. The country also boasts the standout business infrastructure

in West Africa, and is considered to be the industrial and transportation hub of the region.

Furthermore, the country’s impressive record of economic reform and growth makes it an

attractive investment opportunity.

Cocoa and coffee production are the primary source of existing investment in Côte

d’Ivoire, and the country is currently the world’s largest and third-largest producer of these

two products, respectively. Investors should also look to the wood, rubber, palm oil and

banana industries, as well as the country’s growing mining sector.

317
Republic of
Gambia
Geography and People

Location Western Africa, bordering the North Atlantic Ocean and Senegal

Area 11 295km2

Capital city Banjul

Other major
Serekunda
cities

Tropical; hot, rainy season (June to November); cooler, dry season

Climate
(November to May)

Natural
Fish, titanium (rutile and ilmenite), tin, zircon, silica sand, clay, petroleum
resources

Key ports Port of Banjul

Population 1 782 893 (2009 est.)

Population
2,668% (2009 est.)
growth rate

Life
55,35 years
expectancy

0 – 14 years: 43,6%
Age
15 – 64 years: 53,6%
distribution
65 years and over: 2,8%

Languages English (official), Mandinka, Wolof, Fula, other indigenous vernaculars

African (99%) (Mandinka 42%, Fula 18%, Wolof 16%, Jola 10%, Serahuli
Ethnic groups
9%, other 4%), non-African (1%)

Religions Muslim (90%), Christian (8%), indigenous beliefs (2%)

318
Economy
Current account (as % of GDP) -17,1%

Savings rate (% of GDP) 10,03% (2006)

Foreign direct investment flows US$63 million

Size of labour force 777 100 (2007)

Unemployment -

Currency Dalasis (GMD)

2007 2008

Average exchange rate (versus US$) 27,79 22,75 (est.)

GDP US$0,65 billion US$0,81 billion

GDP growth rate 6,3% 6,1%

GDP per capita (PPP) US$1 300 (est.) US$1 300 (est.)

GNI US$1,94 billion US$2,13 billion

GNI per capita (PPP) US$1 200 US$1 280

Inflation rate (consumer prices) 5,1% (est.) 4,5% (est.)

Growth and Structure of the Economy

The Gambian economy is dominated by the services sector, with tourism and transit

activities representing particularly important industries. Tourism is a major source of

employment and the country’s primary contributor of foreign exchange earnings. Indeed,

Gambia has one of the larger markets for tourism in West Africa owing to its natural

beauty and proximity to Europe. In turn, the country’s geographical location has meant

that it serves as a regional transit hub, and engages in significant re-export activities to

Senegal and other countries in the region.

319
Groundnut cultivation and processing are the primary activities in the country’s agriculture

and industry sectors. Gambia has no confirmed mineral or natural resource deposits.

Despite the country having a limited agricultural base, about 75% of the population

depends on crops and livestock for its livelihood. Small-scale manufacturing activity

includes the processing of peanuts, fish and hides.

In recent years, the re-export sector has faced a number of challenges which threaten the
country’s economic growth. A government-imposed pre-shipment inspection plan of 1999,
and the instability of the Gambian currency, resulted in a reduction in re-export trade – a
sector that has historically constituted a major segment of economic activity. Furthermore,
regional integration has reduced import duties in Senegal, while port efficiency in Senegal
has improved, both of which had slowly eroded Gambia’s competitiveness as a trading
entry point in the region. Encouragingly, however, Gambia’s economic growth has been

steady in recent years, averaging 6,5% since 2004. The movement towards macro-

economic stability in the country has been grounded in prudent monetary and fiscal

policies and structural reforms.

Trade
Exports and Imports 2007 2008

Total exports US$91,4 million (est.) US$85 million (est.)

Export growth rate - -6,1%

Total imports US$262,9 million US$299 million (est.)

Import growth rate - 22,4%

International Trade
Gambia’s key export commodities include peanut products, fish, cotton lint and palm

kernels. The country also engages in a number of re-export activities to Senegal and

other countries in the region. Gambia’s main export partners are India (30,5%), Japan

320
(25,6%), Belgium (6,3%), China (5,5%), the United Kingdom (5,3%) and Spain (4,1%).

Gambia’s major imports include foodstuffs, manufactured goods, fuel, machinery and

transport equipment. The key sources of the country’s imports are China (20,6%), Senegal

(12,1%), Côte d’Ivoire (8,7%), Brazil (7,7%) and the Netherlands (5%).

Trade with South Africa

(Rands ‘000) 2006 2007 2008

Total exports 38 677 64 837 50 268

Total imports 334 204 5 272

Trade balance 38 343 64 633 44 997

Bilateral Agreements with South Africa

• None

Barriers to Trade
Barriers to trade in Gambia are largely limited to tariff barriers. There are, however,

licensing arrangements and sanitary and phytosanitary prohibitions on a few products.

Business Climate
Infrastructure and Trade

Number of power outages in a typical month 23,82 (2006)

Average time to clear direct exports through customs (days) 4,95 (2006)

Average time to clear imports through customs (days) 2,96 (2006)

321
Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 140 Getting credit 135

Starting a business 114 Protecting investors 172

Dealing with construction

79 Paying taxes 176
permits

Employing workers 85 Trading across borders 81

Registering property 117 Enforcing contracts 67

Closing a business 123

Business Travel, Culture, Risk and Investment

Flights from South Africa to Gambia are available on several airlines. South African

Airways and Delta Airlines both have direct flights to the Gambian capital Banjul.

A personal approach is recommended in Gambian business circles. It is advisable to use

business cards and business relationships in the country are often based on trust and

familiarity. Personal contacts and networks are important in making business deals.

Many Gambians pray five times a day and in some workplaces separate rooms are set

aside for this. The degree to which Islam influences Gambian business culture varies,

but it is essential to remember its influence when working with business people in Banjul.

Commerce and trade move a lot slower in Gambia and, therefore, require patience in all

business dealings. In general, people do not rush through business negotiations. To this

end, punctuality is not always observed, as businessmen do not like to feel hurried.

322
Regulatory Policy Framework for Businesses
With the exception of operations linked to foreign-exchange bureaux, television and

defence, there are no formal restrictions on private sector investment in Gambia, and

the country’s investment policies do not place any restrictions on the range of business

activities in which investors may engage. The government does not employ any economic

or industrial strategies that have discriminatory effects on foreign investors, and maintains

an open-door, non-discriminatory policy to ensure that foreign investor are not subject to

restrictions that are not applicable to domestic investors. Indeed, no legal distinction is

made between the treatment of foreign and domestic investors in the country. The policy

also seeks to encourage equity participation of foreign investors as a means of enhancing

the spread and transfer of technology, technical, managerial and entrepreneurial skills.

The Investment Promotion Act and Free Zones Act of 2001, together with the country’s

Constitution, contain provisions against the expropriation of property owned by investors.

Other laws that are relevant to foreign investors include the Companies Act of 1955 and

the Business Registration Act of 2005. The laws of the country offer equal protection to

both local and foreign investors and, where an offence is committed, due legal procedure

is applied and investors have unrestricted access to local and international arbitration.

Gambia is also a member of the International Council of Societies of Industrial Design

(ICSID) and the Multilateral Investment Guarantee Agency (MIGA) of the World Bank

Group.

Free economic zones – managed by the Gambia Investment Promotion and Free Zones

Agency – are located around Banjul International Airport and are designed to attract FDI.

The Investment Promotion Act stipulates that investors must fulfil a number of criteria

to qualify for special investment status, including targeting investment activities in one

of the country’s priority sectors (which include agriculture, fisheries, tourism, forestry,

manufacturing, energy, skills development, financial services, health, transportation,

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information technology, communications and minerals exploration); investing at least

US$100 000; utilising local materials, suppliers and services; creating employment

opportunities in the country; and introducing advanced technology or upgrading

indigenous technology in the country.

Foreign investors are also encouraged to participate in privatisation programmes, and

may participate as ‘strategic investors’ that hold majority shares. It should be noted,

however, that in certain cases some shares may be reserved for state-owned corporations

(‘institutional investors’), as well as Gambian nationals and businesses.

Foreign investors are subjected to a unique payroll tax, which is paid for each expatriate

employed by the company. However, no restrictions exist on the transfer of investment-

related funds into or out of the country, and funds can be freely converted into any currency.

Investors are also permitted to repatriate profits and dividends through commercial banks

or licenced money transfer agencies.

Opportunities for South African Businesses

The sectors of the economy earmarked the Gambian government as posing the greatest

profit potential for investors include agriculture, fisheries, energy, manufacturing, tourism,

ICT, air services and river transport.

324
325
Republic of
Ghana
Geography and People

Western Africa, bordering the Gulf of Guinea, between Côte d’Ivoire and
Location
Togo

Area 238 533km2

Capital city Accra

Other major
Kumasi, Tamale, Takoradi
cities
Tropical; warm and comparatively dry along south-east coast; hot and
Climate
humid in southwest; hot and dry in north
Natural Gold, timber, industrial diamonds, bauxite, manganese, fish, rubber,
resources hydropower, petroleum, silver, salt, limestone

Key ports Ports of Tema and Takoradi

Population 23 887 812 (2009 est.)

Population
1,882% (2009 est.)
growth rate
Life
59,85 years
expectancy
0 – 14 years: 37,3%
Age
15 – 64 years: 59,1%
distribution
65 years and over: 3,6%
Asante (14,8%), Ewe (12,7%), Fante (9,9%), Boron (Brong) (4,6%), Dagomba
Languages (4,3%), Dangme (4,3%), Dagarte (Dagaba) (3,7%), Akyem (3,4%), Ga
(3,4%), Akuapem (2,9%), other (36,1%) (includes English (official))
Akan (45,3%), Mole-Dagbon (15,2%), Ewe (11,7%), Ga-Dangme (7,3%),
Ethnic groups Guan (4%), Gurma (3,6%), Grusi (2,6%), Mande-Busanga (1%), other
tribes (1,4%), other (7,8%)

Christian (68,8%) (Pentecostal/Charismatic 24,1%, Protestant 18,6%,

Religions Catholic 15,1%, other 11%), Muslim (15,9%), traditional (8,5%), other
(0,7%), none (6,1%)

326
Economy
Current account (as % of GDP) -12,7%

Savings rate (% of GDP) 27,24% (2006)

Foreign direct investment flows US$2,1 billion

Size of labour force 10,12 million (2008 est.)

Unemployment 11% (2000 est.)

Currency Cedi (GHC)

2007 2008

Average exchange rate (versus US$) 0,95 1,1 (est.)

GDP US$15,01 billion US$16,65 billion

GDP growth rate 5,7% 7,3%

GDP per capita (PPP) US$1 400 (est.) US$1 500 (est.)

GNI US$30,96 billion US$33,38 billion

GNI per capita (PPP) US$1 350 US$1 430

Inflation rate (consumer prices) 10,7% (est.) 16,5% (est.)

Growth and Structure of the Economy

Despite a rich natural resource base and a per capita output that is roughly twice that of

the poorest countries in West Africa, Ghana remains heavily dependent on international

financial and technical assistance. The country’s major sources of foreign exchange

include gold and cocoa production, and individual remittances. The domestic economy

continues to revolve around agriculture, which accounts for 37,3% of GDP and employs

56% of the workforce, primarily operating as small landholders. Industry (25,3%) and

services (37,5%) are the other sectors contributing significantly to the national GDP.

327
Ghana is one of the best-performing economies in the West Africa region, with real GDP

growth averaging around 6% over the past three years. An expanding private sector,

macro-economic stability, and ongoing reform in the financial sector have contributed

to this relatively steady economic growth in recent years. Growth in the country’s

manufacturing sector has occurred on the back of improvements in access to bank credit

and to the overall business environment in Ghana. Similarly, much of the recent growth in

the agricultural sector has been spearheaded by strong performance in cocoa production

as a result of improvements to disease and pest control programmes, the refurbishment

of roads in the country’s cocoa-growing regions, and the payment of enhanced bonus

packages to cocoa farmers.

Trade
Exports and Imports 2007 2008

Total exports US$4,172 billion (est.) US$5,275 billion (est.)

Export growth rate - 5,8%

Total imports US$8,066 billion (est.) US$10,26 billion (est.)

Import growth rate - 1,6%

International Trade
Ghana’s key export partners include the Netherlands (13,5%), Ukraine (11,8%), the

United Kingdom (8%), France (5,7%) and the USA (5,2%). The country exports mainly

gold, cocoa, timber, tuna, bauxite, aluminium, manganese ore, diamonds and horticulture.

Ghana’s major import commodities are capital equipment, petroleum and foodstuffs.

These commodities are primarily imported from China (15,6%), Nigeria (14,7%), India
(7,4%), the USA (5,5%), France (4,4%) and the United Kingdom (4,4%).

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Trade with South Africa

(Rands ‘000) 2005 2006 2007

Total exports 1 625 748 1 736 876 2 242 463

Total imports 74 902 81 731 98 890

Trade balance 1 550 846 1 655 145 2 143 573

Bilateral Agreements with South Africa

• Agreement for the Reciprocal Promotion and Protection of Investment (1998) (signed
but not yet ratified);
• Agreement on the Establishment of a Joint Commission for Co-operation (2004);
• Convention for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion
with Respect to Taxes on Income or Capital Gains (2004); and
• Treaty for the Avoidance of Double Taxation (2007).

Barriers to Trade
Ghana’s weighted average tariff rate was 11% in 2004. Special import fees and taxes,

import bans and restrictions, some services market barriers, cumbersome and non-

transparent standards and regulations, weak enforcement of intellectual property rights,

non-transparent government procurement, export promotion schemes, and customs

procedures that can be complex and prone to corruption, add to trade costs in the country.

Business Climate
Infrastructure and Trade

Number of power outages in a typical month 9,70 (2007)

Average time to clear direct exports through customs (days) 7,76 (2007)

Average time to clear imports through customs (days) 6,77 (2007)

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Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 92 Getting credit 113

Starting a business 135 Protecting investors 41

Dealing with construction

153 Paying taxes 79
permits

Employing workers 133 Trading across borders 83

Registering property 33 Enforcing contracts 47

Closing a business 106

Business Travel, Culture, Risk and Investment

Direct and indirect flights are available from Johannesburg to Ghana’s capital city, Accra,

and are operated by South African Airways, British Airways, Kenya Airways and Ethiopian

Airlines. South Africans travelling to Ghana require a visa. Both single and multiple entry

visas are available.

English is the primary language for conducting business. Appointments are customary

and visitors are encouraged to always be punctual for meetings. The best time for

business visits is from September to April. There are numerous public sector agencies as

well as private legal, business consulting and accounting firms, which can provide expert

guidance on doing business in Ghana.

Regulatory Policy Framework for Businesses

Ghana’s business law conforms to international norms and is based on a framework

of legislation relating to business activity, copyrights, patents, trademarks, disputes and

labour relations. The country subscribes to a number of international conventions on

industrial and intellectual property. Sanctity of contracts ensures respect for commercial

rights and obligations. Damages are compensatory, not punitive, and an independent

330
court system ensures equitable protection of rights. Mediation, arbitration and other

forms of dispute resolution are routinely used. The country’s investment laws also provide

guarantees against expropriation and nationalisations.

Reporting and accounting standards in Ghana’s financial sector remain underdeveloped.

While regulatory reform has been significant and continues to progress, additional risks

exist as some subsidiary banks active in Ghana are regulated elsewhere.

With the exception of the minerals and mining and oil and gas sectors, and the country’s

free zones, investment in all sectors is governed by the Ghana Investment Promotion

Centre (GIPC) Act of 1994. In addition to the Act, further regulation of banking, non-

banking financial institutions, insurance, fishing, securities, telecommunications, energy

and real state is provided through sector-specific laws. The GIPC law also specifies

certain areas of investment that are reserved for Ghanaian nationals, including small-

scale trading, taxi services, pool betting businesses, lotteries, beauty salons and barber

shops. In addition, foreign investors are denied national treatment in the banking fishing

and real estate sectors. That aside, no other explicit economic or industrial strategies exist

that discriminate against foreign-owned businesses. Indeed, foreign investors may benefit

from additional incentives for projects deemed to be critical for Ghana’s development.

Foreign investors are, however, required to satisfy minimum capital requirements of

US$10 000 for joint ventures with Ghanaian nationals and US$50 000 for businesses

that are entirely foreign-owned. Furthermore, trading companies that are either entirely or

partly-owned by foreigners must employ a minimum of ten Ghanaian nationals and satisfy

a minimum foreign equity requirement of US$300 000.

Regulation in certain sectors is governed by specific laws. For instance, the Minerals

and Mining Act of 2006 delineates the principal laws regulating investment in minerals

and mining and addresses issues relating to mineral rights, incentives and guarantees

331
and land ownership. Similarly, the Petroleum Exploration and Production Law of 1984

regulates all oil and gas exploration and production in the country.

Opportunities for South African Businesses

Ghana is one of the more prosperous markets in the West African region. It is considered

to be an excellent investment destination due to its stable political conditions and the

government’s commitment to maintaining good governance and developing the country’s

private sector.

The main opportunities for investment in the country can be found in agriculture and

agro-processing, oil and gas production, fish processing and infrastructure development.

Other opportunities are also available in education, environment, healthcare, power and

telecommunications.

332
333
Guinea
Geography and People

West Africa, bordering the North Atlantic Ocean, between Guinea-Bissau

Location
and Sierra Leone

Area 245 857km2

Capital city Conakry

Other major
Nérékoré, Kankan, Kindia
cities

Generally hot and humid; monsoonal-type rainy season (June to

Climate November) with south-westerly winds; dry season (December to May)
with north-easterly harmattan winds

Natural
Bauxite, iron ore, diamonds, gold, uranium, hydropower, fish, salt
resources

Key ports Port of Conakry

Population 10 057 975 (2009 est.)

Population
2,572% (2009 est.)
growth rate
Life
57,09 years
expectancy
0 – 14 years: 42,8%
Age
15 – 64 years: 53,7%
distribution
65 years and over: 3,5%

Languages French (official), ethnic languages

Peuhl (40%), Malinke (30%), Soussou (20%), smaller ethnic groups

Ethnic groups
(10%)

Religions Muslim (85%), Christian (8%), indigenous beliefs (7%)

334
Economy
Current account (as % of GDP) -1,7%

Savings rate (% of GDP) 8,49%

Foreign direct investment flows US$1,4 billion

Size of labour force 4,392 million (2007 est.)

Unemployment -

Currency Guinean Franc (GNF)

2007 2008

Average exchange rate (versus US$) 4 122,8 5 500

GDP US$4,16 billion US$4,52 billion

GDP growth rate 1,8% 4,9%

GDP per capita (PPP) US$1 100 US$1 100

GNI US$10,53 billion US$11,72 billion

GNI per capita (PPP) US$1 100 US$1 190

Inflation rate (consumer prices) 23,4% (est.) 15% (est.)

Growth and Structure of the Economy

Guinea’s economy is heavily dominated by the rural and mining sectors. Agriculture
contributes 23,2% of GDP, industry 39,5% and services 37,3%. Major industries include
bauxite, gold, diamonds, iron, aluminium refining, light manufacturing and agricultural
processing. Most notably, Guinea possesses major mineral, hydropower, and agricultural
resources, and possesses almost half of the world’s bauxite reserves. The mining
sector accounts for more than 70% of exports and is the dominant force in the country’s
secondary sector. Guinea’s tertiary sector contributes 46% of national GDP. Notably,

however, most of the sector is characterised by informal activity.

Economic growth rose marginally between 2006 and 2008, primarily due to rising global
demand and increasing commodity prices on international markets. In particular, real

335
GDP growth has been stimulated by growth in the mining sector and favourable prices for
bauxite on global markets. Much of the moderate growth in the country’s primary sector
has stemmed from the agriculture, fisheries and forestry sectors. Despite this, poverty

levels in the country remain high and household living conditions have deteriorated.

Trade
Exports and Imports 2007 2008

Total exports US$1,203 billion US$1,392 billion

Export growth rate - -

Total imports US$1,218 billion US$1,389 billion

Import growth rate - 2,4%

International Trade
Guinea has maintained strategic trade relations with European countries and emerging
powers like China and India, despite a tumultuous political climate. Guinea’s main exports
include bauxite, alumina, gold, diamonds, coffee, fish and agricultural products. Its major
export partners are India (28,9%), Spain (10%), Russia (9,5%), Germany (6,7%), the USA
(5,8%), Ireland (4,2%) and France (4,1%)

Guinea imports petroleum products, metals, machinery, transport equipment, textiles,

grain and other foodstuffs. Key import partners are China (9,6%), France (7,8%) and the
Netherlands (7,6%).

Trade with South Africa

(Rands ‘000) 2005 2006 2007

Total exports 236 492 258 631 286 877

Total imports 11 145 12 589 20 485

Trade balance 225 347 246 042 266 392

336
Bilateral Agreements with South Africa
• Agreement for the Reciprocal Promotion and Protection of Investments (2007); and
• Trade Agreement (2006).

Barriers to Trade
Guinea’s weighted average tariff rate was 12,7% in 2005. Import taxes, pre-import and

export authorisation requirements, subsidies, non-transparent customs administration,

a lack of foreign currency for transacting formal trade, state-owned import and export

monopolies, and inadequate infrastructure all add to trade costs in the country.

Business Climate
Infrastructure and Trade

Number of power outages in a typical month 33,91 (2006)

Average time to clear direct exports through customs (days) 4,32 (2006)

Average time to clear imports through customs (days) 10,39 (2006)

Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 173 Getting credit 167

Starting a business 179 Protecting investors 172

Dealing with construction

170 Paying taxes 171
permits

Employing workers 79 Trading across borders 130

Registering property 163 Enforcing contracts 131

Closing a business 111

337
Business Travel, Culture, Risk and Investment
There are a number of local airlines, which operate internally and on shuttle routes to

neighbouring destinations. Airlines serving the international airport at Conakry include

Air Afrique, KLM, Air France and Brussels Airlines, together with a number of regional

airlines. South African passport holders require a visa to travel to Guinea.

A military coup took place on 23 December 2008 following the death of President Lansana

Conte. Theft at gunpoint from individuals and businesses has increased since the côup

d’état. There has been increased lawlessness and impunity with reports each month of

violent crime, such as robbery and assault, against businesses and individuals – including

foreign travellers. These crimes are often carried out by individuals dressed in military-

style uniforms carrying military weapons. Pick-pocketing, muggings and armed break-ins

also occur, especially in Conakry. These security concerns pose a significant challenge

and risk to conducting business operations in the country.

Regulatory Policy Framework for Businesses

Since 1996, several measures have been taken in Guinea with a view to improving

the country’s legal and regulatory framework for business. For instance, a judicial

structure for arbitration and revision of various legal instruments and codes (banking

law, customs code, public contract code, mining code, land code, labour code) has been

introduced. In addition, the institutional framework for support to the private sector has

been strengthened by the restructuring of a number of investment and sector promotion

agencies in the country. Furthermore, within the context of regional partnerships, Guinea

ratified the OHADA treaty in 2002, which is designed to harmonise sub-regional policies,

institutions and the legal framework.

The rights of both Guinean nationals and foreigners to undertake any economic activity

in accordance with existing laws and regulations are guaranteed by Guinea’s Investment

338
Code of 1987. The Investment Code provides guarantees against the expropriation or

nationalisation of both foreign and locally owned assets or businesses, with the exception

of instances deemed to be in the public interest. Tax advantages are provided in the

Investment Code for specific priority investments related to the promotion of Small and

Medium Enterprises (SMEs), the development of non-traditional exports, the processing

of local natural resources and raw materials and economic activities in underdeveloped

regions.

The legal framework for the exploration and exploitation of all liquid or gaseous

hydrocarbons in Guinea is enshrined in the Petroleum Code of 1986. The terms of the Code

allow provision for companies engaged in the exploration or exploitation of hydrocarbons

to negotiate with the government for exemptions from taxes and customs duties. In turn,

the 1995 Mining Code provides the legal framework for the mining sector. Importantly,

the Code grants the government entitlement to ‘founder’s shares’ amounting to 15%

of the capital of the operating company in all gold, diamond and other mining activities

involving precious stones. The government is not required to make a financial contribution

to acquire these shares. However, free shares are not authorised for activities involving

‘substances of special interest’, which include bauxite, iron ore and solid hydrocarbons.

Foreign investors in the country are permitted to transfer funds in the form of the original

foreign capital for the investment, profits from the investment, capital gains on the disposal

of the investment and any fair compensation acquired in the case of nationalisation or

expropriation of the investment to any country of their choice.

Opportunities for South African Businesses

While Guinea is among the poorest nations in the world, its untapped economic potential
is appealing to foreign investors, particularly in the agriculture and mining sectors, with

the later based on bauxite, gold and diamond deposits.

339
Guinea-Bissau
Geography and People

Western Africa, bordering the North Atlantic Ocean, between Guinea and
Location
Senegal

Area 36 125km2

Capital city Bissau

Other major
Bafatá, Cacheu
cities

Tropical; generally hot and humid; monsoonal-type rainy season (June

Climate to November) with south-westerly winds; dry season (December to May)
with north-easterly harmattan winds

Natural Fish, timber, phosphates, bauxite, clay, granite, limestone, unexploited

resources deposits of petroleum

Key ports Ports of Bissau, Buba, Cacheu and Farim

Population 1 533 964 (2009 est.)

Population
2,019% (2009 est.)
growth rate
Life
47,9 years
expectancy
0 – 14 years: 40,8%
Age
15 – 64 years: 56,1%
distribution
65 years and over: 3,1%

Languages Portuguese (official), Crioulo, African languages

Black (includes Balanta 30%, Fula 20%, Manjaca 14%, Mandinga 13%,
Ethnic groups
Papel 7%) (99%), European and mulatto (less than 1%)

Religions Muslim (50%), indigenous beliefs (40%), Christian (10%)

340
Economy
Current account (as % of GDP) -3,1%

Savings rate (% of GDP) 22,79%

Foreign direct investment flows US$15 million

Size of labour force 632 700 (2007)

Unemployment -
Communauté Financière
Currency
Africaine Franc (XOF)

2007 2008

Average exchange rate (versus US$) 493,51 447,81

GDP US$0,38 billion US$0,46 billion

GDP growth rate 2,7% 3,3%

GDP per capita (PPP) US$600 US$600

GNI US$0,79 billion US$0,83 billion

GNI per capita (PPP) US$510 US$530

Inflation rate (consumer prices) 3,8% (est.) -

Growth and Structure of the Economy

Guinea-Bissau is one of the world’s poorest economies. Political and institutional instability,

coupled with civil war and violence, has displaced hundreds of thousands of people from

Guinea-Bissau and severely damaged the country’s infrastructure, causing significant

disruption to the economy. Agriculture is the mainstay of the economy, accounting for 62%

of GDP, and employs 82% of the labour force. The agricultural sector is also responsible

for more than 90% of Guinea-Bissau’s total exports, of which cashew nuts are the

primary export commodity. Major industries in Guinea-Bissau include the processing of

agricultural products, beer and soft drinks. New investments in bauxite promise some

economic diversification, and the tourism industry is growing.

341
Guinea-Bissau’s economic growth performance has been unstable, and the country has

frequently recorded negative average growth rates in recent years.

Trade
Exports and Imports 2007 2008

Total exports - -

Export growth rate - -

Total imports - -

Import growth rate - -

International Trade
Despite a ravaging war and poor infrastructure, Guinea–Bissau has maintained

multilateral and unilateral trade agreements with several Western powers and with

emerging economies such as China and India. Nigeria and Senegal remain Guinea-

Bissau’s strategic African trade partners. The country’s most important export partners

are India (56,8%), Nigeria (35,6%) and Pakistan (1,2%). Guinea-Bissau exports cashew

nuts, shrimp, peanuts, palm kernels and timber. Rice is the major crop and staple food.

Imported commodities include foodstuffs, machinery and transport equipment and

petroleum products. The country’s major import partners are Portugal (24,1%), Senegal

(17,2%), Pakistan (4,8%) and France (4,6%).

Trade with South Africa

(Rands ‘000) 2005 2006 2007

Total exports 3 212 14 135 22 519

Total imports 1 2 205

Trade balance 3 211 14 1333 22 314

342
Bilateral Agreements with South Africa
• None

Barriers to Trade
Guinea–Bissau’s weighted average tariff rate was 9,1% in 2006. Irregularities in the

valuation of imports, difficulty tracking and monitoring goods, inadequate infrastructure

and trade capacity, and customs corruption add to the cost of trade.

Business Climate
Infrastructure and Trade

Number of power outages in a typical month 9,19 (2006)

Average time to clear direct exports through customs (days) 5,58 (2006)

Average time to clear imports through customs (days) 10,95 (2006)

Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 181 Getting credit 150

Starting a business 183 Protecting investors 132

Dealing with construction

114 Paying taxes 130
permits

Employing workers 175 Trading across borders 115

Registering property 177 Enforcing contracts 143

Closing a business 183

Business Travel, Culture, Risk and Investment

A valid passport, visa and proof of onward/return ticket are required. On the continent,

most flights that are destined for Guinea-Bissau pass through Dakar, Senegal.

343
Knowledge of Portuguese is useful as only a few executives speak English. Business

visits during Ramadan are not recommended. Although it is possible to obtain a visa upon

arrival in Bissau if arrangements are made in advance, there are no clear instructions as

to how to make those arrangements. Peace returned in this fragile nation in 1999 and

elections were held in 2005 and 2008, however, travellers should be aware that political

tensions persist. Sporadic, politically-motivated violence remains an issue.

Internal political and social instability in Guinea-Bissau represent significant risks to

potential investment.

Regulatory Policy Framework for Businesses

Business proprietors and groups of business partners are protected by law in Guinea-
Bissau. Beside national laws for protecting private business, there are also other
international laws signed by Guinea-Bissau for the same purpose. Private foreign
investors are allowed to transfer their profit after tax to foreign banks without any objection.
Companies are allowed to credit their company in foreign banks outside Guinea-Bissau.

However, the credit has to be registered in the Central Bank of Guinea-Bissau.

Foreign investors are afforded national treatment under Guinea-Bissau’s investment

code, and are also provided with incentives and guarantees against nationalisation and

expropriation. However, freedom to conduct business in Guinea-Bissau is severely limited

by the country’s regulatory environment. In particular, the time taken to start a business

is lengthy and the entry costs associated with launching a business in the country are

extremely high.

344
The income tax rate in Guinea-Bissau is relatively low, and the corporate tax rate is

moderate. The top income tax rate is set at 20%, while the equivalent corporate tax rate

is 25%.

Opportunities for South African Businesses

Attractive investment opportunities can be found in Guinea-Bissau’s primary sector due to

the availability of a strong labour force with vocational training aimed at the primary sector

(agriculture, fishing and livestock). In addition, the tourism, trade, ICT, construction, agro-

business, transport, health, education and finance industries also represent potential

areas for targeted investment.

345
Liberia
Geography and People

Western Africa, bordering the North Atlantic Ocean, between Côte

Location
d’Ivoire and Sierra Leone

Area 111 369km2

Capital city Monrovia

Other major
Buchanan, Gbamga, Voinjama, Zwedru and Harbel
cities

Tropical; hot, humid; dry winters with hot days and cool to cold nights;
Climate
wet, cloudy summers with frequent heavy showers

Natural
Iron ore, timber, diamonds, gold, hydropower
resources

Key ports Ports of Buchanan and Monrovia

Population 3 441 790 (2009 est.)

Population
2,665% (2009 est.)
growth rate

Life
41,84 years
expectancy

0 – 14 years: 44,1%
Age
15 – 64 years: 53%
distribution
65 years and over: 2,8%

Languages English (20%) (official), 20 ethnic group languages

Indigenous African (95%) (including Kpelle, Bassa, Gio, Kru, Grebo,

Ethnic groups Mano, Krahn, Gola, Gbandi, Loma, Kissi, Vai, Dei, Bella, Mandingo, and
Mende), Americo-Liberians (2,5%), Congo People (2,5%)

Religions Christian (40%), Muslim (20%), indigenous beliefs (40%)

346
Economy
Current account (as % of GDP) -41,8%

Savings rate (% of GDP) -

Foreign direct investment flows US$144 million

Size of labour force -

Unemployment 85% (2003 est.)

Currency Liberian Dollar (LRD)

2007 2008

Average exchange rate (versus US$) - -

GDP US$0,74 billion US$0,85 billion

GDP growth rate 9,4% 7,1%

GDP per capita (PPP) US$400 US$500

GNI US$1,02 billion US$1,14 billion

GNI per capita (PPP) US$280 US$300

Inflation rate (consumer prices) 11,2% (est.) -

Growth and Structure of the Economy

Liberia has continued to make progress in overcoming the devastating effects of years of

civil conflict. The agricultural sector remains the mainstay of the economy, accounting for

61% of aggregate national GDP. Recent growth in the agricultural sector has been driven

primarily by rubber and timber production.

347
The share of the service sector in national GDP is approximately 26%, with growth in the

sector mostly driven by activities in the construction, transportation and communications,

trade and hotel sub-sectors. The manufacturing sector contributed 13% of GDP in 2007.

Major industries in Liberia include rubber processing, palm oil processing, timber and

diamonds.

The country has shown signs of economic recovery on the back of progress in attaining

political stability, reconciliation, peace and national security. Liberia’s real GDP is

estimated to have grown by more than 7% in 2008 on the back of a resumption of forestry

operations, increased diamond and gold exports, higher production of rice, and strong

performance in the services and construction sectors. Post-civil war construction activity,

efforts to reconstruct basic infrastructure, and financial support provided to the social

services sector from the international donor community, have also all contributed to

Liberia’s economic growth recovery.

Trade
Exports and Imports 2007 2008

Total exports - -

Export growth rate - 5,9%

Total imports - -

Import growth rate - 6,1%

International Trade
Despite a war-ravaged economy, Liberia has maintained strategic trade links with several

developed countries as well as emerging economies such as India and China. Post-

conflict stability and a lifting of a trade embargo have ensured a degree of reintegration of

Liberia’s economy with the rest of the world.

348
Liberia is a major exporter of rubber, timber, iron, diamonds, cocoa and coffee. The

country’s key export partners include India (26,5%), the USA (17,9%), Poland (13,9%),

Germany (10,1%) and Belgium (6,8%).

Liberia’s major import commodities are fuels, chemicals, machinery, transportation

equipment, manufactured goods and foodstuffs. The country’s main import partners are

South Korea (27,2%), Singapore (25,5%), Japan (11,8%) and China (11%).

Trade with South Africa

(Rands ‘000) 2005 2006 2007

Total exports 42 017 118 240 131 178

Total imports 4 395 1 144 060 29 582

Trade balance 37 622 -1 025 821 101 596

Bilateral Agreements with South Africa

• None

Barriers to Trade
Liberia’s weighted average tariff rate was 15,6% in 2007. Some import bans and

restrictions still remain in force. In addition, inadequate trade capacity and infrastructure,

licensing requirements, corruption and minimal enforcement of property rights add to

trade costs in the country.

Business Climate
Infrastructure and Trade

Number of power outages in a typical month 5,57 (2009)

Average time to clear direct exports through customs (days) -

Average time to clear imports through customs (days) 6,74 (2009)

349
Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 149 Getting credit 135

Starting a business 57 Protecting investors 147

Dealing with construction

135 Paying taxes 85
permits

Employing workers 121 Trading across borders 112

Registering property 174 Enforcing contracts 166

Closing a business 148

Business Travel, Culture, Risk and Investment

Nigerian Airways and Air Guinea fly to Liberia. A valid yellow fever vaccination certificate

is also required in order to gain entry into the country. A departure tax of US$40 is payable

in cash at the airport when leaving the country, and exact change is required. South

African passport holders require a visa to travel to Liberia, and are required to apply for

a visa in person.

Business dress in Liberia is informal, and the language most commonly used in business

circles is English. Visitors intending to reside in Liberia are required to register after arrival

with the Bureau of Immigration and Naturalisation. However, short-term visitors are not

required to register with the Bureau.

The overall security situation in Liberia has improved following the end of conflict in 2003.
A democratically elected Liberian government is working closely with the United Nations

and the international community to provide increased stability and development. Within

this context, the risks to investing in Liberia are slowly receding.

350
Regulatory Policy Framework for Businesses
Liberia has a very liberal business climate. There are no statutory foreign exchange controls

in Liberia, and funds may generally be freely remitted into and out of the country. There

is a dual system of statutory law based on Anglo-American common law for the modern

sector and customary law based on unwritten tribal practices for the indigenous sector.

Non-resident companies (those with external ownership), are not subject to taxation.

Foreign companies can operate in Liberia through local agents, a local corporation or a

branch. Foreign investors are, however, required to register with the government.

The Liberalization Policy Act, promulgated by the government in 1975, reserves 12

business activities exclusively for Liberian nationals. The Act was amended in 1998 to

increase the number of sectors and business activities reserved for Liberians to 26. These

activities are: block making with cement, clay or like materials; supply of sand, stone

and granite; operation of gas stations; peddling; ice cream manufacturing; commercial

printing; travel agencies; advertising agencies; graphics and commercial arts; distribution

of locally manufactured products within Liberia; cinemas; production of poultry products;

import or sale of second-hand clothing; retail sale of rice; making or sale of ice; operation

of water purification or bottling plants valued at US$100 000 or less; import and sale of

used cars; tyre repair; automobile repair shops with investments of less than US$50 000;

entertainment centres not connected with established hotels; retail sale of animal and

poultry food; shoe repair; retail sale of timber and planks; bakeries; and retail sale of

pharmaceuticals. Furthermore, the ownership of land is restricted to Liberian nationals.

Regulations governing the establishment of businesses in Liberia are inconsistent, and

the entry costs of starting a business are comparatively high. Liberia’s tax rates are also
relatively high, with the top income and corporate tax rate set at 35%, and additional

property and goods and services taxes in operation.

351
Although few restrictions exist on converting or transferring funds from investments into

foreign currency, all exchange transfers are regulated by the Liberian Central Bank.

Opportunities for South African Businesses

The sectors open to foreign investment in Liberia have been identified as those areas

requiring significant development in the country. The Liberian government has sought to

make these sectors as attractive as possible to foreign investors, with the sectors holding

the greatest potential including agriculture, fisheries, mining, forestry, manufacturing,

rubber, tourism and oil exploration.

352
353
Republic of Mali
Geography and People

Location Western Africa, south-west of Algeria

Area 1 240 192km2

Capital city Bamako

Other major
Tombouctou, Segou , Mopti , Sikasso
cities

Subtropical to arid; hot and dry (February to June); rainy, humid, and mild
Climate
(June to November); cool and dry (November to February)

Gold, phosphates, kaolin, salt, limestone, uranium, gypsum, granite,

Natural hydropower
resources Note: Bauxite, iron ore, manganese, tin, and copper deposits are known
but not exploited

Key ports Mali is landlocked

Population 12 666 987 (2009 est.)

Population
2,765% (2009 est.)
growth rate
Life
50,35 years
expectancy

0 – 14 years: 48,3%
Age
15 – 64 years: 48,7%
distribution
65 years and over: 3,1% (2009 est.)

Languages French (official), Bambara (80%), numerous African languages

Mande (50%) (Bambara, Malinke, Soninke), Peul (17%), Voltaic (12%),

Ethnic groups
Songhai (6%), Tuareg and Moor (10%), other (5%)

Religions Muslim (90%), Christian (1%), indigenous beliefs (9%)

354
Economy
Current account (as % of GDP) -7,3%

Savings rate (% of GDP) 13%

Foreign direct investment flows US$127 million

Size of labour force 3,241 million (2007 est.)

Unemployment 30% (2004 est.)

Communauté Financière
Currency
Africaine Franc (XOF)

2007 2008

Average exchange rate (versus US$) 493,51 447,81

GDP US$7,16 billion US$8,77 billion

GDP growth rate 4,3% 5,1%

GDP per capita (PPP) US$1 100 (est.) US$1 100 (est.)

GNI US$14,52 billion US$13,91 billion

GNI per capita (PPP) US$1 180 US$1 090

Inflation rate (consumer prices) 2,5% (est.) -

Growth and Structure of the Economy

Mali is among the twenty-five poorest countries in the world, with 65% of its land area
desert or semi-desert and with a highly unequal distribution of income. Economic activity
is largely confined to the riverine area irrigated by the Niger River. Mali’s primary sector
accounts for 34% of national GDP and is dominated by agriculture. About 10% of the
population is nomadic and some 80% of the labour force is engaged in farming and
fishing. Industrial activity is concentrated on processing farm commodities. Other major
industries include food processing, construction, phosphate and gold mining. Notably,

industrial activity in Mali is constrained by the presence of high factor costs and a narrow

market.

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The country’s tertiary sector accounts for approximately 40% of national GDP. Activity in

the sector is centred primarily in the transport and communications industries, as well as

financial services and tourism.

Economic growth in Mali is heavily dependent on foreign aid and vulnerable to fluctuations

in world prices for gold and cotton, its main exports. The government has continued its

successful implementation of an IMF-recommended structural adjustment programme

that is helping the economy to grow, diversify and attract foreign investment. In particular,

the government has invested in tourism and a tractor assembly factory. The economy

has grown at an average of 5% between 1996 and 2008, boosted by the government’s

adherence to economic reform and a number of currency devaluations.

Trade
Exports and Imports 2007 2008

Total exports - -

Export growth rate - 2.3%

Total imports - -

Import growth rate - -4,0%

International Trade
Mali’s major exports include cotton, gold and livestock. Its primary export partners are

China (26,7%), Thailand (10,7%), Denmark (6,4%), Pakistan (5,2%) and Morocco (5%).

Major import commodities include petroleum, machinery and equipment, construction

materials, foodstuffs and textiles. Mali’s major import partners are Senegal (13,1%),

France (11,4%), Côte d’Ivoire (11,2%) and China (5,9%).

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Trade with South Africa

(Rands ‘000) 2007 2008 2009

Total exports 445 837 319 717 576 229

Total imports 836 4 799 4 044

Trade balance 440 000 314 918 572 186

Bilateral Agreements with South Africa

• None

Barriers to Trade
Mali’s weighted average tariff rate was 10,2% in 2008. Import and export restrictions,

import licensing restrictions, some import taxes, inadequate infrastructure and trade

capacity, state marketing of cotton, and inefficient customs implementation all add to the

cost of trade.

Mali has eliminated customs duties in its trade with WAEMU members, with the

implementation of the common external tariff (CET: 0 – 20%), as well as with the

ECOWAS members; and has undertaken since January 2002 to comply with WAEMU’s

Convergence, Stability, Growth and Solidarity Pact.

Business Climate
Infrastructure and Trade

Number of power outages in a typical month 4,35 (2007)

Average time to clear direct exports through customs (days) 4,83 (2007)

Average time to clear imports through customs (days) 9,10 (2007)

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Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 156 Getting credit 135

Starting a business 139 Protecting investors 147

Dealing with construction

94 Paying taxes 85
permits

Employing workers 100 Trading across borders 112

Registering property 99 Enforcing contracts 166

Closing a business 117

Business Travel, Culture, Risk and Investment

South Africans require a valid passport and visa in order to gain entry into Mali. In addition,

all travellers must have international vaccination cards complete with a current yellow

fever immunisation.

The official language in Mali is French and, therefore, a working knowledge of the

language is essential. Business is conducted somewhat formally, but due to the warm

weather conditions, lightweight suits are recommended for important meetings and more

casual attire for regular meetings. The population in Mali is predominantly Muslim, and

religious customs should be respected, particularly during the month of Ramadan.

The country’s financial sector is not fully developed meaning that investing in Mali can be

risky. This risk is exacerbated by inconsistent enforcement of contracts, corruption and

poor infrastructure.

Regulatory Policy Framework for Businesses

Mali has no restrictions as far as international trade is concerned. Its exports have free

access to the EU market under the Cotonou Agreement. Moreover, Mali has preferential

access to the American market under the AGOA.

358
Domestic and foreign investments in the country are treated on an equal footing by the

Malian government and face identical screening processes – with all investors required

to go through a one-stop procedure for the processing of business applications. Foreign

investors are permitted to own 100% of any business they establish in the country and

are also free to purchase shares in domestic enterprises as well as in parastatals that are

being privatised. Joint ventures between foreign companies and domestic enterprises are

also permitted. Mali’s Investment Code contains provisions for incentives to both domestic

and foreign investors related to licensing, procurement, tax and customs duty deferrals,

export and import policies and qualification for export zones. In terms of the Investment

Code, eligible companies are also exempted from paying duties on imported equipment

and machinery and may receive tax exemptions on the use of local raw materials. The Code

also contains provision for the negotiation of specific incentives on a case-by-case basis.

Finally, the Investment Code allows for the transfer of funds associated with investment,

and there are no limits on the inflow or outflow of funds for remittances of profits, debt

service, capital or capital gains. However, payments and transfers to some countries

require government approval. In addition, the Mali Central Bank’s rules require that

all remittances go through its channels. Furthermore, credit and loan operations and

purchases of securities, derivatives, and other instruments may be subject to government

authorisation; and real estate purchases require special authorisation.

Opportunities for South African Businesses

The structure of the economy in Mali, coupled with the fact that much of its population

resides in rural areas, has meant that the country is hugely dependent on its agricultural

sector. However, macro-economic stabilisation and economic liberalisation policies

designed to attract investment to Mali have meant that the mining, services and oil sectors

offer emerging investment potential.

359
Republic of
Niger
Geography and People

Location Western Africa, south-east of Algeria

Area 1,267 million km2

Capital city Niamey

Other major
Zinder, Maradi
cities

Climate Desert; mostly hot, dry, dusty; tropical in extreme south

Natural Uranium, coal, iron ore, tin, phosphates, gold, molybdenum, gypsum,
resources salt, petroleum

Key ports Niger is landlocked

Population 15 306 252 (2009 est.)

Population
3,677% (2009 est.)
growth rate

Life
52,6 years
expectancy

0 – 14 years: 49,6%
Age
15 – 64 years: 48%
distribution
65 years and over: 2,3%

Languages French (official), Hausa, Djerma

Haoussa (55,4%), Djerma Sonrai (21%), Tuareg (9,3%), Peuhl (8,5%),

Ethnic groups
Kanouri Manga (4,7%), other (1,2%)

Religions Muslim (80%), other (includes indigenous beliefs and Christian) (20%)

360
Economy
Current account (as % of GDP) -21,2%

Savings rate (% of GDP) -

Foreign direct investment flows US$147 million

Size of labour force 4,688 million (2007)

Unemployment -

Communauté Financière
Currency
Africaine Franc (XOF)

2007 2008

Average exchange rate (versus US$) 493,51 447,81

GDP US$4,25 billion US$5,38 billion

GDP growth rate 3,3% (est.) 9,5% (est.)

GDP per capita (PPP) US$700 (est.) US$700 (est.)

GNI US$8,97 billion US$10 billion

GNI per capita (PPP) US$630 US$680

Inflation rate (consumer prices) 0,1% (est.) -

Growth and Structure of the Economy

Niger is one of the poorest countries in the world and ranks near last on the United

Nations Development Fund Index of human development. The country’s economy centres

on subsistence crops, livestock and some of the world’s largest uranium deposits, with

mineral wealth representing a critically important component of the economy. Agriculture

contributes 39% of the national GDP, while industry and services account for 17% and

44% of national GDP, respectively. The economy’s secondary sector is weak, and more

than 47% of the activities in the sector are informal.

361
Drought cycles, desertification, and high population growth have undercut the growth

of the economy. Nearly half of the government’s budget is derived from foreign donor

resources. Future economic growth is expected to be driven by agriculture, and may

also be sustained by the exploitation of oil, gold, coal and other mineral resources. In

particular, the uranium sector has become increasingly important as a growth driver in the

economy on the back of sharp increases in uranium prices in the last few years, together

with commitments from French and Chinese companies to develop new mines.

In December 2000, Niger qualified for enhanced debt relief under the IMF programme

for HIPCs and concluded an agreement with the Fund on a poverty reduction and growth

facility. Debt relief provided under the enhanced HIPC initiative has significantly reduced

Niger’s annual debt service obligations, thereby freeing funds for expenditure on basic

health care, primary education, HIV/Aids prevention, rural infrastructure, and other

programmes geared towards poverty reduction in the country.

Trade
Exports and Imports 2007 2008

Total exports - -

Export growth rate - -

Total imports - -

Import growth rate - -

International Trade
Niger has maintained a number of key strategic trade links with Western countries and

neighbouring African countries. The country’s major export commodities include uranium

ore, livestock, cowpeas and onions. Niger’s chief export partners are Japan (80,4%),

Nigeria (8,5%) and France (2,9%).

362
Niger’s major import commodities are foodstuffs, machinery, vehicles and parts, petroleum

and cereals. Its major import partners are France (16,6%), China (10,9%), Algeria (9,6%),

Nigeria (7,4%), French Polynesia (6,5%), Belgium (4,2%) and Côte d’Ivoire (4,2%).

Trade with South Africa

(Rands ‘000) 2007 2008 2009

Total exports 36 505 53 826 61 715

Total imports 1763 2082 1649

Trade balance 34 742 51 744 60 066

Bilateral Agreements with South Africa

• None

Barriers to Trade
Niger’s weighted average tariff rate was 9,8% in 2006. Import taxes, import licensing

and certification regulations, inefficient and non-transparent customs implementation and

regulation, and widespread corruption add to the cost of trade.

Business Climate

Infrastructure and Trade

Number of power outages in a typical month 20,08 (2009)

Average time to clear direct exports through customs (days) 2,64 (2009)

Average time to clear imports through customs (days) 9,27 (2009)

363
Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 174 Getting credit 150

Starting a business 157 Protecting investors 154

Dealing with construction

166 Paying taxes 141
permits

Employing workers 173 Trading across borders 173

Registering property 85 Enforcing contracts 138

Closing a business 141

Business Travel, Culture, Risk and Investment

A valid passport and visa, and a yellow fever vaccination certificate, are required to enter
Niger.

It is recommended that a lightweight suit and tie be worn when conducting business
engagements. French is the official language of Niger and a working knowledge of
French is essential, as interpreters are not readily available and executives seldom speak
English. Visitors should respect local traditions, customs, laws and religions at all times
and be sure that they do not offend other cultures or religious beliefs, especially during the
holy month of Ramadan or when visiting religious areas. Dress tends to be conservative
and women are expected to dress modestly.

The continued political instability in the country represents a major risk to investors. This
instability not only has a negative impact on business, but also threatens inflows of aid,
grants and other forms of international assistance, upon which the economy remains
heavily dependent.

Regulatory Policy Framework for Businesses

The government of Niger welcomes foreign private investment and considers it to be critical
to economic growth. Under the Investment Code (revised in 2000) industrial investments
enjoy tax and customs exemptions and, in some cases, exemptions from VAT. Investors
364
may also be offered other tax benefits as well, but terms must be negotiated with the
government on a case-by-case basis. All investors benefit from periods of special tax
treatment and tariff protection, which vary with the level and location of investment. The
Investment Code contains no provisions for screening, and guarantees equal treatment
to foreign investors regardless of nationality.

Full foreign ownership is permitted in all sectors except those few that are restricted for
national security purposes – including arms and munitions and private security forces –
which require special arrangements. Foreign ownership of land is permitted, but requires
authorisation from the Ministry of Territorial Management and Community Development.

The costs associated with starting a business in Niger are high, as are the fees
associated with obtaining business licences. Lengthy delays in obtaining such licences
are also frequently experienced. Similarly, the process of closing a business in Niger is
comparatively lengthy.

Income tax rates in the country are high, with the top income tax rate set at 45%. In
comparison, the corporate tax rate is more moderate, with a top rate of 30%. Other
relevant taxes include a VAT, a tax on interest and an insurance tax.

Opportunities for South African Businesses

Existing foreign investment in the country has been focused mainly in the areas of livestock
and uranium extraction. However, some of the more alluring areas for investment in Niger
are the exploitable deposits of gold that are known to be available in the country in the
region between the Niger River and the border with Burkina Faso. Also available in these
areas are huge deposits of phosphates, coal, iron, limestone and gypsum. Oil exploration
activity has also begun in Niger and should be of great interest to investors specifically in
the area around the Djado Plateau in north-eastern Niger and the Agadem Basin north
of Lake Chad. To date, Chinese and American corporations have dominated investment
in this sector.

365
Federal Republic of
Nigeria
Geography and People

Western Africa, bordering the Gulf of Guinea, between Benin and

Location
Cameroon

Area 923 768km2

Capital city Abuja

Other major
Lagos, Port Harcourt
cities

Climate Varies; equatorial in south, tropical in centre, arid in north

Natural Natural gas, petroleum, tin, iron ore, coal, limestone, niobium, lead, zinc,
resources arable land

Key ports Bonny Inshore terminal at Port Harcourt, port of Calabar

Population 149 229 090 (2009 est.)

Population
1,999% (2009 est.)
growth rate
Life
46,94 years
expectancy

0 – 14 years: 41,5%
Age
15 – 64 years: 55,5%
distribution
65 years and over: 3,1%

Languages English (official), Hausa, Yoruba, Igbo (Ibo), Fulani

More than 250 ethnic groups, including Hausa and Fulani (29%), Yoruba
Ethnic groups (21%), Igbo (Ibo) (18%), Ijaw (10%), Kanuri (4%), Ibibio (3,5%), Tiv
(2,5%)

Religions Muslim (50%), Christian (40%), indigenous beliefs (10%)

366
Economy
Current account (as % of GDP) 6,9%

Savings rate (% of GDP) 33,88%

Foreign direct investment flows US$20,3 billion

Size of labour force 51,04 million (2008 est.)

Unemployment 4,9% (2007 est.)

Currency Naira (NGN)

2007 2008

Average exchange rate (versus US$) 127,46 117,8 (est.)

GDP US$165,92 billion US$207,12 billion

GDP growth rate 7% 6%

GDP per capita (PPP) US$2 200 (est.) US$2 300 (est.)

GNI US$274,28 billion US$293,10 billion

GNI per capita (PPP) US$1 850 US$1 940

Inflation rate (consumer prices) 5,4% (est.) 11,6% (est.)

Growth and Structure of the Economy

The Nigerian economy remains heavily dependent on its capital-intensive oil sector,

which provides 95% of foreign exchange earnings and about 80% of budgetary revenues.

Major industries include crude oil, coal, tin, columbite, palm oil, peanuts, cotton, rubber,

wood, hides and skins, textiles, cement and other construction materials, food products,

footwear, chemicals, fertiliser, printing, ceramics, steel, small commercial ship construction

and repair. Industry contributes 50,8% to national GDP, agriculture 18,1% and services

31,1%.

367
For many years, economic growth in Nigeria has been constrained by political instability,

corruption, inadequate infrastructure, and poor macro-economic management. However,

over the past decade, the Nigerian government has undertaken several economic reforms.

In 2003, the government began deregulating fuel prices, announced the privatisation

of the country’s four oil refineries, and instituted a national economic empowerment

development strategy. In addition, since 2008 the government has begun to implement

a number of market-oriented reforms suggested by the IMF, such as modernising the

banking system, curbing inflation by blocking excessive wage demands, and resolving

regional disputes over the distribution of earnings from the oil industry.

Based largely on increased oil exports and high global crude prices, Nigeria’s GDP growth

increased strongly in 2007 and 2008. In order to diversify the economy away from its

overdependence on the oil sector, the government has targeted future growth in several

key sectors, including agriculture, employment, transportation and education.

Trade

Exports and Imports 2007 2008

Total exports US$61,82 billion (est.) $76,03 billion (est.)

Export growth rate - -2,1%

Total imports $38,8 billion (est.) $46,3 billion (est.)

Import growth rate - 12,8%

International Trade
Nigeria has maintained key strategic trade links with several advanced economies as

well as major emerging economies, including Brazil, China and India. Nigeria’s key export

368
commodities are petroleum and petroleum products, cocoa and rubber; and its primary

import partners are the USA (41,4%), India (10,4%), Brazil (9,4%), Spain (7,2%) and

France (4,6%).

The country’s major import commodities are machinery, chemicals, transport equipment,

manufactured goods, food and live animals; and its key import partners are China (13,8%),

the Netherlands (9,6%), the USA (8,4%), the United Kingdom (5,3%), South Korea (5,2%)

and France (4,3%).

Trade with South Africa

(Rands ‘000) 2005 2006 2007

Total exports 3 391 695 4 001 100 4 833 688

Total imports 4 163 986 9 285 923 12 480 199

Trade balance -772 291 -5 284 823 -7 646 511

Bilateral Agreements with South Africa

• Agreement for the Reciprocal Promotion and Protection of Investments (2000) (signed
but not yet ratified);
• Bilateral Trade Agreement (2000);
• Agreeement for the Avoidance of Double Taxation and the Prevention of Fiscal
Evasion with respect to Taxes on Income and Capital Gains (2000); and
• Treaty for the Avoidance of Double Taxation (2008).

Barriers to Trade
In 2008, Nigeria’s weighted average tariff rate was 8,9%. Although the Nigerian

government has made some progress in liberalising the country’s trade regime, a number

of prohibitive tariffs, import bans and restrictions and import fees and taxes are still in

369
place. In addition, export taxes, arbitrary regulations, corruption and inconsistencies in

customs administration all add to trade costs in Nigeria.

Business Climate
Infrastructure and Trade

Number of power outages in a typical month 26,75 (2007)

Average time to clear direct exports through customs (days) 7,46 days (2007)

Average time to clear imports through customs (days) 12,83 days (2007)

Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 125 Getting credit 87

Starting a business 108 Protecting investors 57

Dealing with construction

162 Paying taxes 132
permits

Employing workers 37 Trading across borders 146

Registering property 178 Enforcing contracts 94

Closing a business 94

Business Travel, Culture, Risk and Investment

Nigeria has four international airports at Lagos, Abuja, Kano and Port Harcourt. South

African Airways, British Airways, Ethiopia Airlines, Virgin Atlantic and Kenya Airways

all offer direct flights to Nigeria. Valid visas and passports are required by all visitors.

Nigeria is listed by the World Health Organisation (WHO) as endemic for yellow fever,

and some airlines may require passengers to present a valid yellow fever vaccination

certificate before they are allowed to board flights out of Nigeria. The Nigerian immigration

370
authorities have introduced registration requirements for all resident expatriates who

are not nationals of the ECOWAS. English is the official language as well as the official

business language in Nigeria.

Regulatory Policy Framework for Businesses

The enactment of the Nigerian Investment Promotion Commission (NIPC) Act and

FEMMP Act in 1995 represented a paradigm shift in Nigeria in three major areas of

investment rule-making, namely, investment liberalisation, investment protection and the

settlement of investment disputes. These statutes, especially the NIPC Act, contain certain

investment-friendly provisions relating to foreign participation in Nigerian enterprises,

guarantees against expropriation, nationalisation and currency risk, as well as state-

investor arbitration.

Foreign investors are required to register with the NIPC after incorporation. With a few

exceptions, including the petroleum sector, 100% foreign ownership of firms is permitted.

In the petroleum sector, foreign investment is limited to existing joint ventures or new

production-sharing agreements. In addition, investment is reserved for local investors in

industries of strategic importance to national security – including firearms, ammunition,

and military and paramilitary apparel.

Nigerian laws are applied equally to domestic and foreign investors, and include the

Securities and Exchange Act of 1999, the Foreign Exchange Act of 1995, the Money

Laundering Act of 2003, the Banking and Other Financial Institutions Act of 1991, and the

National Office of Technology Acquisition and Promotion Act of 1979.

A number of weaknesses exist in the financial system in Nigeria, including weak corporate

governance, widespread insider lending, high levels of non-performing loans, dependence

on the government for business and deposits, persistent misreporting by many banks,

371
and a weak supervisory framework with a heavy reliance on direct controls. A clear sector

policy still needs to be articulated. However, since the end of 2002, the government has

undertaken several measures to strengthen the banking sector.

Foreign companies and individuals are permitted to hold accounts denominated in foreign

currency in domestic banks. In addition, foreign investors in Nigeria face no restrictions

on the repatriation of capital.

Taxes in Nigeria are moderate, with a top income tax rate of 25% and a flat corporate

tax rate of 25%. VAT, tax on interest and capital gains taxes are also applied in Nigeria.

Notably, companies operating in the oil and gas sector are subject to a special tax scheme.

Opportunities for South African Businesses

Nigeria’s abundant natural resources, its huge consumer market, political stability,

established free market economy and robust private sector, attractive investment

incentives, a fast-growing financial sector, and a large stock of skilled and low-cost labour

and infrastructure make investment in the country an attractive prospect.

Some of the more lucrative industries open to investment include oil and gas, agriculture,

solid minerals, communications, tourism, manufacturing and mining.

372
373
Republic of
Senegal
Geography and People

Location Ocean, between Guinea-Bissau and Mauritania

Area 196 722km2

Capital city Dakar

Other major
Kaolack, Saint Louis, Ziguinchor
cities

Tropical; hot, humid; rainy season (May to November) has strong south-
Climate east winds; dry season (December to April) dominated by hot, dry,
harmattan wind

Natural
Fish, phosphates, iron ore
resources

Key ports Port of Dakar

Population 13 711 597 (2009 est.)

Population
2,709% (2009 est.)
growth rate
Life
59 years
expectancy

0 – 14 years: 42,2%
Age
15 – 64 years: 54,8%
distribution
65 years and over: 3%

Languages French (official), Wolof, Pulaar, Jola, Mandinka

Wolof (43,3%), Pulaar (23,8%), Serer (14,7%), Jola (3,7%), Mandinka

Ethnic groups
(3%), Soninke (1,1%), European and Lebanese (1%), other (9,4%)

Muslim (94%), Christian (5%) (mostly Roman Catholic), indigenous

Religions
beliefs (1%)

374
Economy
Current account (as % of GDP) -11,7%

Savings rate (% of GDP) 18,46% (2006)

Foreign direct investment flows US$706 million

Size of labour force 4,973 million (2008 est.)

Unemployment 48% (2007 est.)

Communauté Financière
Currency
Africaine Franc (XOF)

2007 2008

Average exchange rate (versus US$) 481,83 447,81 (est.)

GDP US$11,3 billion US$13,35 billion

GDP growth rate 4,7% 2,5%

GDP per capita (PPP) US$1 600 (est.) US$1 600 (est.)

GNI US$20,49 billion US$21,47 billion

GNI per capita (PPP) US$1 720 US$1 760

Inflation rate (consumer prices) 5,9% (est.) 5,8% (est.)

Growth and Structure of the Economy

Senegal serves as a regional gateway and business centre in West Africa. The agriculture

sector contributes 16,1% of GDP, industry 19,3% and the services sector 64,6% of

national GDP. The majority of the population is engaged in either agriculture or fishing; and

Senegal’s primary sector provides nearly 60% of employment in the country. Agricultural

production in the country is dominated by the cultivation of staples (millet, sorghum and

maize) and cash crops, particularly groundnuts and cotton, with groundnuts consistently

representing the country’s main agro-industry cash crop since independence. In addition,

Senegal boasts a flourishing horticulture sector.

375
Senegal’s economic growth has been moderate in recent years, partly due to rising import

prices as well as the government’s increasing budgetary problems. The growth achieved

in 2007 and 2008 was spearheaded primarily by the country’s strong construction and

service sectors, with the latter dominated by telecommunications. Future growth is likely

to be sustained by a number of major government investment programmes that include

a campaign to grow more food as well as efforts to upgrade Senegal’s roads and ports.

Senegal’s annual inflation is moderate and has been pushed down to less than 6%. As

a member of the WAEMU, Senegal is working towards greater regional integration with

a unified external tariff and a more stable monetary policy. However, Senegal still relies

heavily upon outside donor assistance. Under the IMF’s HIPC debt-relief programme,

Senegal will benefit from the eradication of two-thirds of its bilateral, multilateral and

private sector debt.

Trade

Exports and Imports 2007 2008

Total exports US$1,65 billion (est.) US$2,053 billion (est.)

Export growth rate - 1,2%

Total imports US$3,732 billion (est.) US$4,263 billion (est.)

Import growth rate - 3,5%

International Trade
Senegal’s primary export commodities are fish, groundnuts (peanuts), petroleum

products, phosphates and cotton. The country’s main export partners are Mali (19,6%),

India (7,2%), France (5,5%), Gambia (5,4%) and Italy (4,9%).

376
The country’s primary imports are food and beverages, capital goods and fuels. Senegal’s

main import partners are France (19,7%), the United Kingdom (15,2%), China (6,7%),

Belgium (4,6%), Thailand (4,4%) and the Netherlands (4,1%).

Trade with South Africa

(Rands ‘000) 2005 2006 2007

Total exports 278 355 351 002 405 327

Total imports 2 035 6 013 3 400

Trade balance 276 320 344 989 401 927

Bilateral Agreements with South Africa

• Agreement for the Promotion and Reciprocal Protection of Investments (1998) [signed
but not yet ratified].

Barriers to Trade
In 2008, Senegal’s weighted average tariff rate was 10,1%. In Senegal, import taxes and

fees, non-transparent government procurement, inconsistent customs implementation,

state import monopolies and corruption all add to the cost of trade.

Business Climate
Infrastructure and Trade

Number of power outages in a typical month 11,75 (2007)

Average time to clear direct exports through customs (days) 8,91 days (2007)

Average time to clear imports through customs (days) 8,85 days (2007)

377
Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 157 Getting credit 150

Starting a business 102 Protecting investors 165

Dealing with construction

124 Paying taxes 172
permits

Employing workers 172 Trading across borders 57

Registering property 166 Enforcing contracts 151

Closing a business 80

Business Travel, Culture, Risk and Investment

The national air carrier is Air Senegal. Air Afrique and Air France are the other principal

airlines that fly to Senegal. Visas are not required for citizens of EU member countries,

citizens of most African Francophone countries and South African citizens. The reciprocity

rule applies for all other countries.

The principal language of international business in Senegal is French. Many Senegalese

businessmen can conduct basic business in English but are not comfortable with extended

or technical conversations, although this is changing as more and more Senegalese

choose to study in the USA. High-level professional interpretation is available at US$640

– 700 per day for business meetings, but less expensive (US$200 – 300) but competent

interpreters are also available. Business hours are typically from 08h00 to 18h00.

Several parts of Senegal are ranked as medium-security risk areas, meaning that there

is a reasonable possibility of security problems affecting companies; however, there is

no sustained threat directed specifically against foreign companies. Targeted crime or

violence poses some risk to foreign assets and personnel and they are at some risk from

violence by terrorists or unrest. In addition corruption remains an important deterrent

378
to investment. Aside from these risks, businesses are expected to operate with few

problems. Political institutions are stable but there is some possibility of negative policy

change.

Regulatory Policy Framework for Businesses

Foreign investors in Senegal are treated in the same way as nationals, and no legal

discrimination exists against businesses operated or owned by foreign investors. An

investment board screens all investments for which incentives are requested. In most

sectors, 100% foreign ownership of businesses is permitted, with the exception of the

electricity, telecommunications, mining and water sectors. Investments in communications,

banking, tourism, transport, mining, health, education and aviation are subject to additional

regulations and approvals. The retail sector is closed to foreigners.

Senegal’s Investment Code offers incentives to companies willing to locate off the Cap

Vert Peninsula. The Code also provides basic guarantees permitting the repatriation of

profits and capital and specifies tax and customs incentives for investors based on the

size of the investment, the classification of the investors as an SME or larger corporation,

and the location of the investment.

The Dakar Industrial Free Zone is a government-owned-and-operated-free trade zone

established to encourage foreign and domestic investors to set up labour-intensive, export-

orientated industrial companies to help reduce Senegal’s trade deficit and create jobs.

Both residents and non-residents may hold foreign-exchange accounts. There are no

controls on payments, transfers, capital transactions, or the repatriation of profits. All import

transactions relating to foreign countries must be domiciled with an authorised bank when

their value exceeds CFAF500 000. Exchange control exists for financial transfers outside

the Franc Zone (a monetary zone including France and its former overseas colonies).

379
In broad terms, the regulatory framework for business in Senegal is characterised by

extensive bureaucratic red tape, while contract enforcement can be weak, and the

dispute resolution process is burdensome. In addition, while legal guarantees are strong,

businesses may face some regulatory or judicial insecurity. Furthermore, the rigid and

demanding labour laws, a policy of non-transparency in public procurement and tenders,

an inefficient and inconsistent judiciary, and slow tax, customs and regulatory decisions

are additional features of Senegal’s regulatory framework that may constrain private-

sector investment from both local and foreign sources.

Income tax rates in Senegal are high, with a top rate of 50%. In comparison, corporate tax

rates are moderate, and the top corporate tax rate is set at 25%. Other taxes in operation

include VAT and a vehicle tax.

Opportunities for South African Businesses

Senegal’s location at the western-most point of the African continent – ensuring that it is

within easy reach of American and European markets from the natural port in Dakar –

makes it an attractive investment destination. This is enhanced by the country’s abundant

labour resources and relatively good infrastructure. Specific investment opportunities

exist in the telecommunications products, construction equipment and materials (electrical

power systems), mining equipment and tourism industries.

380
381
Republic of
Sierra Leone
Geography and People

Western Africa, bordering the North Atlantic Ocean, between Guinea and
Location
Liberia

Area 71 740km2

Capital city Freetown

Other major
Bo, Kenema, Koidu, Makeni
cities

Tropical; hot, humid; summer rainy season (May to December); winter

Climate
dry season (December to April)

Natural
Diamonds, titanium ore, bauxite, iron ore, gold, chromite
resources

Key ports Port of Freetown

Population 6 440 053 (2009 est.)

Population
2,282% (2009 est.)
growth rate
Life
41,24 years
expectancy

0 – 14 years: 44,5%
Age
15 – 64 years: 52,2%
distribution
65 years and over: 3,2%

English (official), Mende (principal vernacular in the south), Temne

Languages
(principal vernacular in the north), Krio

African ethnic groups (Temne 30%, Mende 30%, other 30%) (90%),
Ethnic groups
Creole (Krio) (10%), European, Lebanese, Pakistani, Indian

Religions Muslim (60%), Christian (10%), indigenous beliefs (30%)

382
Economy
Current account (as % of GDP) -9,1%

Savings rate (% of GDP) 9,5% (2006)

Foreign direct investment flows US$30 million

Size of labour force 2,207 million (2007 est.)

Unemployment -

Currency Leone (SLL)

2007 2008

Average exchange rate (versus US$) - -

GDP US$1,66 billion US$1,95 billion

GDP growth rate 6.4% 5,5%

GDP per capita (PPP) US$800 (est.) US$900 (est.)

GNI US$3,89 billion US$4,17 billion

GNI per capita (PPP) US$720 US$750

Inflation rate (consumer prices) 11,7% (est.) -

Growth and Structure of the Economy

Sierra Leone is an extremely poor nation with tremendous inequality in income distribution.

While it possesses substantial mineral, agricultural, and fishing resources, its physical

and social infrastructure is not well developed, and serious social disorders continue to

hamper economic development. About two-thirds of the working-age population engage in

subsistence agriculture. Manufacturing consists mainly of the processing of raw materials

and of light manufacturing for the domestic market. The agriculture sector contributes

49% of national GDP, industry 31% of GDP and the services sector approximately 21%

of GDP.

383
Alluvial diamond mining remains the major source of hard currency earnings, accounting

for nearly half of Sierra Leone’s exports. Economic growth is largely contingent upon

the maintenance of domestic peace and the continued receipt of substantial aid from

abroad, which is essential to offset the country’s severe trade imbalances and supplement

government revenues. The IMF has completed a poverty reduction and growth facility

programme in the country that has helped to stabilise economic growth and reduce

inflation in Sierra Leone. Recent political stability has led to a revival of economic activity,

including the rehabilitation of bauxite mining.

Trade

Exports and Imports 2007 2008

Total exports - -

Export growth rate - 2.6%

Total imports - -

Import growth rate - 10.4%

International Trade
Sierra Leone’s primary export commodities are diamonds, rutile, cocoa, coffee and fish.

The country’s main export partners are Belgium (35,6%), the USA (20,1%), India (15,2%)

and France (4,9%).

The country’s primary imports are foodstuffs, machinery and equipment, fuels and

lubricants and chemicals; and its main import partners are China (10,3%), Côte d’Ivoire

(8,8%), the USA (7,8%), Belgium (6,6%), the United Kingdom (6,6%), Thailand (5,2%)

and India (4,2%).

384
Trade with South Africa

(Rands ‘000) 2005 2006 2007

Total exports 140 653 154 555 150 873

Total imports 4 907 4 606 10 380

Trade balance 135 746 149 949 140 493

Bilateral Agreements with South Africa

• None.

Barriers to Trade
Sierra Leone’s weighted average tariff rate was 12% in 2008. Liberalisation of the trade

regime is progressing, but import taxes and fees, non-transparent regulations, inefficient

customs implementation, inadequate infrastructure and corruption add to trade costs in

the country.

Business Climate
Infrastructure and Trade

Number of power outages in a typical month 15,94 (2009)

Average time to clear direct exports through customs (days) -

Average time to clear imports through customs (days) 12,24 days (2009)

385
Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 148 Getting credit 127

Starting a business 58 Protecting investors 27

Dealing with construction

171 Paying taxes 161
permits

Employing workers 166 Trading across borders 137

Registering property 175 Enforcing contracts 144

Closing a business 147

Business Travel, Culture, Risk and Investment

The principal airlines that fly to Sierra Leone are British Airways, KLM and Brussels

Airlines’, as well as a number of regional airlines. The country’s international airport is

at Lungi, located two hours away from the capital city, Freetown. There is a helicopter

service between the airport and the capital.

English is the most common language in business circles. Prior appointments and

punctuality are recommended for business engagements. The use of business cards is

also recommended, and the best months for doing business in Sierra Leone are from

September to June.

Regulatory Policy Framework for Businesses

The 2007 Investment Promotion Act serves as an overarching policy guide to matters

related to investment in Sierra Leone. The Act commits the government of Sierra Leone

to partner the private sector in driving economic development in the country. However,

386
other sector-specific investment Acts are in place that regulate investment, investment

incentives and operations in business enterprises associated with tourism, fisheries,

mines and minerals, and banks.

Sierra Leone does not discriminate against foreign firms, which are afforded national

treatment, and does not impose any ownership restrictions on foreign firms in any sector.

There are also no laws or regulations in place that restrict remittances or repatriation

of profit. However, unofficial barriers are significant. The country’s business climate has

been hampered by a shortage of foreign exchange, corruption, devastated infrastructure

and uncertainty resulting from the recent 11-year civil war. Furthermore, while the sanctity

of contracts is upheld, the judicial system in Sierra Leone is slow and inefficient.

Furthermore, no land-titling system is in place to validate property rights, thereby creating

difficulties in verifying ownership. Investors are allowed to lease land for economic

purposes under the customary land system, by entering into a joint venture with the local

paramount chief that controls the land in his district.

Tax rates in Sierra Leone are moderate. Both the top income and corporate tax rates are

set at 30%. Individuals and corporations are also subjected to a tax on interest.

Opportunities for South African Businesses

Investors are increasingly looking to Sierra Leone as a result of the country’s abundant,

and largely unexploited, natural resources, which include diamonds, oil, vast fisheries and

arable land.

387
Togolese Republic
Geography and People

Location Western Africa, bordering the Bight of Benin, between Benin and Ghana

Area 56 785km2

Capital city Lomé

Other major
Sokode, Kara, Atakpame, Kpalime, Dapaong
cities

Climate Tropical; hot, humid in south; semi-arid in north

Natural
Phosphates, limestone, marble, arable land
resources

Key ports Ports of Kpeme and Lomé

Population 6 019 877 (2009 est.)

Population
2.711% (2009 est.)
growth rate
Life
58.69 years
expectancy
0 – 14 years: 41.5%
Age
15 – 64 years: 55.7%
distribution
65 years and over: 2.8%

French (official and the language of commerce), Ewe, Mina, Kabye,

Languages
Dagomba

Black (37 tribes; largest and most important are Ewe, Mina, and Kabre)
Ethnic groups
(99%), European and Syrian-Lebanese (less than 1%)

Religions Christian (29%), Muslim (20%), indigenous beliefs (51%)

388
Economy
Current account (as % of GDP) -6.9%

Savings rate (% of GDP) -

Foreign direct investment flows US$68 million

Size of labour force 2,595 million (2007)

Unemployment -

Communauté Financière
Currency
Africaine Franc (XOF)

2007 2008

Average exchange rate (versus US$) 482,71 447,81 (est.)

GDP US$2,5 billion US$2,89 billion

GDP growth rate 1,9% 1,1%

GDP per capita (PPP) US$900 (est.) US$900 (est.)

GNI US$5,10 billion US$5,32 billion

GNI per capita (PPP) US$810 US$820

Inflation rate (consumer prices) 1% (est.) 8,7% (est.)

Growth and Structure of the Economy

Togo’s small economy is heavily dependent on both commercial and subsistence

agriculture, which provides employment for 65% of the labour force. Despite the importance

of the agricultural sector, some basic foodstuffs are still imported. Cocoa, coffee, and

cotton generate about 40% of export earnings with cotton being the most important cash

crop. The agriculture sector contributes about 40% of GDP, with nearly two-thirds of this

output from subsistence crops. The industry sector contributes approximately 25% of

national GDP and the services sector accounts for 35% of GDP. The country’s secondary

389
sector remains in its infancy, while the industrial sector is dominated by phosphate and

cement production. Togo is the world’s fourth-largest producer of phosphate.

The government’s decade-long effort, supported by the World Bank and the IMF,

to implement economic reform measures, encourage foreign investment, and bring

revenues in line with expenditures, has progressed gradually. These reforms have

included the restructuring of the key phosphates, cotton, electricity, transport and state

banking sectors. Further progress is dependent on follow-through on privatisation efforts,

increased openness in government financial operations, progress toward legislative

elections, and continued support from foreign donors. Togo is working with donors to

establish a poverty-reduction and growth facility that could eventually lead to a debt

reduction plan. Economic growth remains marginal due to declining cotton production,

under-investment in phosphate mining and strained relations with donors.

Trade

Exports and Imports 2007 2008

US$777 million (est.)

Total exports US$702 million (est.)

Export growth rate - 1,5%

Total imports US$1,264 billion (est.) US$1,541 billion (est.)

Import growth rate - 6,2%

International Trade
Togo’s primary exports are re-exports, cotton, phosphates, coffee and cocoa. The country’s

main export partners are Ghana (12,7%), Burkina Faso (11%), Germany (9,8%), South

Africa (7,3%), Benin (6,9%), India (6,3%), Brazil (4,9%), Belgium (4,8%), Mali (4,4%) and

the Netherlands (4,3%).

390
The country’s primary imports are machinery and equipment, foodstuffs and petroleum

products. Togo’s main import partners are China (34,2%), the Netherlands (7,5%), France

(6,8%), India (6,5%) and Thailand (4,9%).

Trade with South Africa

(Rands ‘000) 2005 2006 2007

Total exports 65 699 104 938 213 928

Total imports 771 49 363 36 632

Trade balance 64 928 55 575 177 296

Bilateral Agreements with South Africa

• None.

Barriers to Trade
Togo’s weighted average tariff rate was 9,7% in 2006. Import restrictions, numerous

import taxes and fees, import permit requirements, export-promotion programmes, and

weak enforcement of intellectual property rights add to trade costs.

Business Climate
Infrastructure and Trade

Number of power outages in a typical month 11,59 (2009)

Average time to clear direct exports through customs (days) 6,68 days (2009)

Average time to clear imports through customs (days) 9,03 days (2009)

391
Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 165 Getting credit 150

Starting a business 170 Protecting investors 147

Dealing with construction

152 Paying taxes 155
permits

Employing workers 159 Trading across borders 87

Registering property 155 Enforcing contracts 154

Closing a business 97

Business Travel, Culture, Risk and Investment

The principal airlines that fly to the international airport at Lomé are Air Afrique, Air France,

Brussels Airlines and KLM; together with a selection of regional airlines. As of January

1996, visas are required by all visitors to Togo except nationals of certain Western-

European countries, the United Kingdom and the USA.

Business is conducted in French, and few executives speak English. Scheduling prior

appointments is recommended for all business meetings and it is advisable to carry

business cards.

Regulatory Policy Framework for Businesses

Togo’s Foreign Investment Code was liberalised in 1990, but investors still face some

barriers. The 1990 Code includes local content restrictions, and there is an overall

lack of administrative transparency. Investment is permitted only in certain sectors and

is screened on a case-by-case basis. Residents and non-residents may hold foreign

exchange accounts after obtaining government approval. Payments and transfers

392
to certain countries are subject to authorisation and quantitative limits in some cases.

Purchases of real estate by non-residents for purposes other than business are subject

to controls. Furthermore, most capital transactions are subject to controls or require

government approval.

In terms of the 1990 Code, investment is permitted in agriculture (animal husbandry,

fishing, forestry, vegetable and animal products); manufacturing; exploration; extraction

and conversion of minerals; low-cost housing; hotels and tourist infrastructure; applied

research laboratories; and socio-cultural activities. Notably, however, new investments

are limited to investments of at least FCFA25 million for foreign companies and

FCFA5 million for Togolese companies.

The transfer of revenues derived from investments is freely permitted for non-residents.

However, the transfer of FCFA500 000 or more requires prior government approval, with

the law stipulating that approval should be granted in two days.

Tax rates in Togo are high, particularly with respect to income tax. The top income tax rate

is set at 55%, while the top corporate tax rate is considerably lower at 33%. Other relevant

taxes include VAT, a property tax and a vehicle tax.

Opportunities for South African Businesses

Togo is commonly viewed as the business hub in West Africa as a result of its

geographical location at the heart of the Economic Community of West African States

(ECOWAS) and its access to quality infrastructure including a deep-water port, modern

airport, hotel accommodation and dense road network. The most prominent opportunities
for investment in the country can be found in the agriculture, commerce, industrial and

informal sectors.

393
NORTH AFRICA
• Algeria • Mauritania
• Egypt • Morocco
• Libya • Tunisia

394
Tunisia

Morocco

Algeria

Libya
Egypt

Mauritania

395
People’s Democratic
Republic of Algeria
Geography and People

Northern Africa, bordering the Mediterranean Sea, between Morocco and

Location
Tunisia

Area 2 381 741km2

Capital city Algiers

Other major
Annabãh; Bãtnah; al-Jazãcir
cities

Arid to semi-arid; mild, wet winters with hot dry summers along coast;
Climate drier with cold winters and hot summers on high plateau; sirocco is a hot,
dust, sand-laden wind especially common in summer

Natural
Petroleum, natural gas, iron ore, phosphates, uranium, lead and zinc
resources

Ports of Algiers, Annabãh, Arzew, Bejaia, Djendjene, Mostaganem, Oran

Key ports
and Skikda

Population 34 178 188 (2009 est.)

Population
1,196% (2009 est.)
growth rate

Life
74,02 years
expectancy

0 – 14 years: 25,4%
Age
15 – 64 years: 69,5%
distribution
65 years and over: 5,1%

Languages Arabic (official); French; Berber dialects

Ethnic groups Arab-Berber (99%); European (1%)

Religions Sunni Muslim (99%); Christian and Jewish (1%)

396
Economy
Current account (as % of GDP) 2,7%

Savings rate (% of GDP) -

Foreign direct investment flows US$2,65 billion

Size of labour force 9,464 million (2008 est.)

Unemployment 12,8% (2008 est.)

Currency Algerian Dinars (DZD)

2007 2008

Average exchange rate (versus US$) 69,9 63,25 (est.)

GDP US$135,34 billion US$159,67 billion

GDP growth rate 3% 3%

GDP per capita (PPP) US$6 800 (est.) US$6 900 (est.)

GNI US$258,95 billion US$272,84 billion

GNI per capita (PPP) US$7 650 US$7 940

Inflation rate (consumer prices) 3,5% 4,4% (est.)

Growth and Structure of the Economy

Industry (62,3%) is a major contributor to GDP in Algeria. Most notably, hydrocarbons are

of vital importance to the Algerian economy and account for 60% of budget revenues,

30% of GDP and over 95% of export earnings. The country ranks 14th in the world in oil

revenues, has the seventh-largest reserve of natural gas worldwide and is the second-

largest gas exporter.

397
Major industries in the country include petroleum, natural gas, light industries, mining,

electrical, petrochemical and food processing. The growth of these industries has allowed

the government to diversify the economy by attracting both local and foreign direct

investment outside of the energy sector.

Other sectors contributing to the Algerian economy are agriculture (8,3%) and services

(29,4%). With an emphasis on these sectors the country has been able to build up

sizeable foreign exchange reserves. The government has increased its spending and

real GDP has surged on the back of high global oil prices; the latter playing an important

role in boosting economic growth in the country. Furthermore, the Algerian economy has

benefited in recent years from IMF assistance in implementing policy reforms.

Despite this, the Algerian Government still faces a challenge in dealing with the country’s

relatively high unemployment rate, and there is a need to improve the living conditions of

workers in the country.

Trade
Exports and Imports 2007 2008

Total exports US$60,6 billion US$78,23 billion

Export growth rate - 1,8%

Total imports US$26,4 billion US$39,16 billion

Import growth rate - 6,0%

International Trade
Apart from the USA (23,9%) and Canada (6,8%), Algeria’s main export partners are

European countries: Italy (15.5%), Spain (11,4%), France (8%) and the Netherlands

(7,8%). The country’s main exports are petroleum, natural gas and other petroleum

products, and there are only limited restrictions on export goods.

398
Algeria’s import partners are France (16,5%), Italy (11%), China (10,3%), Spain (7,4%),

Germany (6,1%) and the USA (5,5%). The country’s principal imports are primarily capital

goods, foodstuffs and consumer goods.

Trade with South Africa

(Rands ‘000) 2007 2008 2009

Total exports 426 979 1 113 149 931 919

Total imports 49 270 7 905 9 660

Trade balance 277 709 1 105 244 922 259

Bilateral Agreements with South Africa

• Reciprocal Protection and Promotion of Investment Agreement (2000) [signed but not
yet ratified];
• Bilateral Trade Agreement (2000);
• Agreement on Economic Co-operation and Partnership (2000); and
• Treaty for the Avoidance of Double Taxation (2000).

Barriers to Trade
In 2008, Algeria’s weighted average tariff rate stood at 9,7%. A variety of customs

clearance procedures, value-added taxes, import and export controls, and restrictive

labelling, sanitary and phytosanitary regulations all add to the cost of trade in Algeria.

Furthermore, the complexity of Algeria’s financial systems represents a deterrent to

foreign trade.

While Algeria does not require import licences for imported goods, some goods such as

firearms, explosives and pork products are subject to restrictions. These restrictions are

mainly in place for security and religious reasons.

399
Business Climate
Infrastructure and Trade

Number of power outages in a typical month 5,11 (2007)

Average time to clear direct exports through customs (days) 14,14 (2007)

Average time to clear imports through customs (days) 16,81 (2007)

Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 136 Getting credit 135

Starting a business 148 Protecting investors 73

Dealing with construction

110 Paying taxes 168
permits

Employing workers 122 Trading across borders 122

Registering property 160 Enforcing contracts 123

Closing a business 51

Business Travel, Culture, Risk and Investment

A large number of airlines fly into Algiers from Johannesburg, including South African

Airways, Turkish Airlines, Iberia, British Airways, Air France, Egypt Air, Virgin Atlantic,

Lufthansa and Emirates. It is also possible to take a number of ferry services from France

to Algiers. South Africans require a visa to travel to Algeria, which is available free of

charge for South African passport holders. Business visas are valid for up to 6 months.

Arabic and French are the main languages spoken when doing business in Algeria. It is

important to ensure that prior appointments are made specifically with big businesses in the

country. The business culture in Algeria is characterised by bargaining; therefore, it is rarely

appropriate to carry out business transactions through the use of an interpreter. Furthermore,

it is advised not to undertake business transactions during the month of Ramadan.

400
Conflict related to religious extremism is one of the major issues affecting business in

Algeria, as it is very difficult to ascertain when security conditions have improved to a

degree that would make doing business more viable. Despite this, the Algerian government

remains committed to ending conflict and this has encouraged continued investment in

the country.

Regulatory Policy Framework for Businesses

The Algerian Government welcomes foreign investment. With this in mind, significant

efforts have been made by the country’s legislature to improve its investment climate and

reduce regulatory burdens. For instance, the government introduced the law on money

and credit with a view to guaranteeing the repatriation of profits and indemnities to foreign

investors.

The Supplementary Finance Law (1990) introduced the system of concessionaires and

wholesalers as a major ingredient of the import liberalisation process in Algeria. The

Algerian Government has also joined the International Finance Corporation (a World Bank

body) that specialises in encouraging private-sector ventures and projects in developing

countries. The government also established the Agency for Development and Promotion

of Investment to familiarise potential foreign investors with Algeria’s business climate and

to facilitate private sector investment in the country.

Despite these reforms, regulations related to starting a business or enforcing contracts are

complex, and procedures for obtaining planning permission are comparatively onerous.

These complexities in the regulatory framework have created difficulties in the private

sector, particularly among SMEs. Furthermore, a new law – promulgated in mid-2009 –

requires at least 51% Algerian ownership in investments, which has severely curtailed

imports into Algeria.

401
Legislation in the country is such that businesses and investors are guaranteed repatriation.

However, this comes with its own problems, and the outdated banking systems in the

country are frequently responsible for slowing down the process significantly. For this

reason it is advisable to obtain risk insurance to guard against the negative effects this

could have on business and investment. Intellectual property rights have also been

guaranteed recently in legislation, but some problems still exist in the enforcement of this

legislation.

More encouragingly for private-sector development, in order to address problems related

to accessing land for industrial use, the Algerian Government decided to make public

land available to industry through 99-year concessions that are awarded by the National

Agency for Intermediation and Property Regulation. In addition, the Algerian Government

has implemented a number of regulatory reforms to the financial system since 2004. For

instance, the government has pursued reforms to improve bank governance as well as

the risk management and efficiency of banking services. The government is also currently

finalising the legal and fiscal framework for a new financial instrument to compete with

banks for the provision of short-term financing.

Opportunities for South African Businesses

Several areas hold profitable investment potential in Algeria. Specifically, the country

boasts a thriving hydrocarbons sector, which is focused mainly on oil production. Oil in

the country remains largely under-exploited and the country is ranked 3rd in Africa and

402
12th globally in terms of oil reserves. There are four main oil provinces in the country: the

eastern part of the Sahara, the central part of the Sahara, the western part of the Sahara

and the northern part of the Sahara.

Algeria has undergone a number of reforms aimed at attracting additional investment

in the industrial sector, with opportunities in basic industries, electronics, leather and

textiles, building material, wood processing, chemistry and construction.

Liberalisation of the mining industry has been taking place in Algeria since 2001, and a

number of investors have already been attracted to this growing industry in the country.

In the agricultural sector, opportunities are available in wheat and barley-farming activities,

and the country also grows potatoes, vines and citrus fruits.

Finally, the telecommunications sector also offers attractive investment potential having

undergone progressive liberalisation in 2001 in order to open the market to private, local

and foreign capital.

403
Arab Republic of
Egypt
Geography and People

Northern Africa, bordering the Mediterranean Sea, between Libya and

Location the Gaza Strip, and the Red Sea north of Sudan, and includes the Asian
Sinai Peninsula

Area 1 001 450km2

Capital city Cairo

Other major
Alexandria, Tanta, Port Said, Luxor, Aswan, Zagazig, Assiut
cities

Climate Desert; hot, dry summers with moderate winters

Natural Petroleum, natural gas, iron ore, phosphates, manganese, limestone,

resources gypsum, talc, asbestos, lead and zinc

Key ports Port Alexandria, Port Said

Population 83 082 869 (2009 est.)

Population
1,642% (2009 est.)
growth rate

Life
72,12 years
expectancy
0 – 14 years: 31,4%
Age
15 – 64 years: 63,8%
distribution
65 years and over: 4,8%

Languages Arabic (official), English, French

Ethnic groups Egyptian (99,6%), Turkish and Berber (0,4%)

Religions Muslim (Sunni) (90%), Coptic (9%), Christian (1%)

404
Economy
Current account (as % of GDP) -2,4%

Savings rate (% of GDP) 22,03% (2006 est.)

Foreign direct investment flows US$9,5 billion

Size of labour force 24,6 million (2008 est.)

Unemployment 8,7% (2008 est.)

Currency Egyptian Pound (EGP)

2007 2008

Average exchange rate (versus US$) 5,67 5,4 (est.)

GDP US$130,35 billion US$162,62 billion

GDP growth rate 7,1% 7,2%

GDP per capita (PPP) US$5 500 (est.) US$5 800 (est.)

GNI US$407,33 billion US$445,37 billion

GNI per capita (PPP) US$5 090 US$5 460

Inflation rate (consumer prices) 9,5% (est.) 18,3% (est.)

Growth and Structure of the Economy

Economic activity in Egypt takes place primarily on the highly fertile Nile Valley area. The

services sector (48,1%) in Egypt represents one of the main contributors to GDP in the

economy, together with agriculture (13,2%) and industry (38,7%). While the contribution

of agriculture to GDP is small in comparison to the contributions from the services and

industry sectors, farming is an important source of rural incomes and employment, as

well as export revenues. The primary engines of growth in the economy are industrial

production, which contributes nearly one-third of national GDP and is dominated by

405
manufacturing; extractive industries (mainly petroleum and natural gas); tourism; and

revenues from the Suez Canal. Importantly, however, rising incidences of piracy have

affected foreign trade through the Suez Canal in recent years, thereby sharply affecting

Suez Canal revenues, as many transporters have sought to utilise alternative trade routes.

The Egyptian Government has made some progress in reforming its once highly

centralised economy. During 2005, personal and corporate taxes were reduced along with

energy subsidies, and, at the same time, several Egyptian enterprises were privatised.

As a result, the Egyptian stock market boomed and the country’s GDP increased by

nearly 5%. These reforms have also been accompanied by growing foreign investment

and greater revenues from the production of oil and gas – the country’s leading exports.

Nevertheless, despite incremental reforms to liberalise the socialist economic system

that has previously hampered economic growth since the 1950s, the government still

subsidises food, energy, and other key commodities heavily.

Trade

Exports and Imports 2007 2008

Total exports US$24,45 billion US$29,85 billion

Export growth rate - 29,0%

Total imports US$44,95 billion US$56,62 billion

Import growth rate - 26,0%

International Trade
Egypt’s major exports are crude oil, petroleum products, cotton, textiles, metal products
and chemicals. The country’s main export partners are Italy (9,4%), the USA (7,1%), India

(6,2%), Spain (6,1%), Syria (4,7%), Saudi Arabia (4,6%), Japan (4,5%) and Germany

(4,5%).

406
The major import commodities in Egypt are machinery and equipment, foodstuffs,

chemicals, wood products and fuel. The majority of these commodities come from its

major import partners, including the USA (10,3%), China (9,9%), Italy (7,3%), Germany

(6,8%) and Saudi Arabia (4,9%).

Trade with South Africa

(Rands ‘000) 2007 2008 2009

Total exports 247 221 226 176 467 803

Total imports 175 820 631 841 207 082

Trade balance 71 401 -405 664 260 721

Bilateral Agreements with South Africa

• Agreement for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion
with Respect to Taxes on Income (1997);
• Agreement for the Promotion and Reciprocal Protection of Investment (1998) (signed
but not yet ratified);
• Bilateral Trade Agreement (1998); and
• Memorandum of Understanding on Economic Co-operation (2009) (signed but not yet
tabled in Parliament).

Barriers to Trade
Non-tariff barriers in Egypt include mandatory quality control standards, selective import

restrictions, burdensome and non-transparent sanitary and phytosanitary measures, and

cumbersome customs procedures.

407
Business Climate
Infrastructure and Trade

Number of power outages in a typical month 1,14 (2008)

Average time to clear direct exports through customs (days) 6,32 (2008)

Average time to clear imports through customs (days) 8,53 (2008)

Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 106 Getting credit 71

Starting a business 24 Protecting investors 73

Dealing with construction

156 Paying taxes 140
permits

Employing workers 120 Trading across borders 29

Registering property 87 Enforcing contracts 148

Closing a business 132

Business Travel, Culture, Risk and Investment

Flights from South Africa to Egypt depart from Johannesburg. Several airlines offer direct

flights, including Ethiopian Airlines, South African Airways, Egypt Air, Etihad, Air Kenya,

Lufthansa, Emirates and British Airways. Alternatively, connecting flights are available

through cities such as London, Dubai and Harare. South Africans travelling to Egypt

require a visa if they remain in the country for a period longer than six hours and if they

wish to go through immigration and passport control and leave the airport.

Business people in Egypt typically prefer to conduct business with other businesses and

people that they are familiar with. Therefore, it is recommended that time be devoted

408
to cultivating personal relationships before business is conducted. Appointments are

necessary and should be made in advance. Furthermore, it is advised not to undertake

business transactions during the month of Ramadan.

The main risk to doing business in Egypt arises from the country’s external situation

arising from the conflict in the Middle East and the focus on religious extremism and

terrorist activities emanating from many Muslim countries, with which Egypt maintains

close ties.

Regulatory Policy Framework for Businesses

A number of key laws are in place to govern foreign investment in Egypt. The country’s

Investment Law Number 8, which is known as “the favourable non-free zone regime”,

is aimed at attracting foreign investors and applies only to specific activities. The law,

together with its associated executive regulations and amendments, provides more

than 20 investment incentives designed to promote both local and foreign investment

in targeted economic sectors as well as the decentralisation of industry away from

the crowded Nile Valley area. Most notably, the law permits 100% foreign ownership

of investment projects, and guarantees the right to repatriate capital and remit income

earned in Egypt. The law also includes provisions that guarantee against confiscations,

sequestration and nationalisation; and promulgate the right to own land, the right to hold

foreign-currency bank accounts, and equal treatment regardless of nationality.

Local and foreign investments in sectors not covered by Law Number 8 are subject to the

Corporate Law Number 159 of 1981. However, in both instances, the General Authority

for Investment and Free Zones acts as the official regulator for all incorporations and
licences.

409
Notably, the Land/Real Estate Law 15 of 1963 explicitly prohibits foreign ownership of

agricultural land both on an individual and corporate level. In terms of the law, agricultural

land refers to traditional agricultural land in the Nile Valley, Delta and Oases. Restrictions

also exist for foreigners wishing to import into Egypt. Specifically, foreigners are prohibited

from acting as importers for trading purposes and may only function as commercial

agents. Foreigners wishing to import for trading purposes must do so through an Egyptian

importer.

In contrast, all individuals and businesses in Egypt are permitted under Egyptian law to

conduct foreign exchange transactions and may establish foreign exchange accounts

and transfer foreign exchange in and out of Egypt. The repatriation of profits and capital

is also permitted and is regulated through Banking Law 88 of 2003.

A one-stop-shop has been established to simplify the administrative procedures involved

in obtaining approval for establishing a new company or investment in Egypt, and provides

after-care services for existing companies.

Opportunities for South African Businesses

In broad terms, Egypt’s macro-economic stability and robust growth; the availability of a

large, trained and competitively priced labour force; a large consumer market; developed

infrastructure; competitive tax rates; preferential access to key global markets; a reformist

investment climate; and political stability make the country an attractive destination for

foreign investment.

410
Potential investment opportunities can be found in agri-business, communications and

information technology, education, finance, health care, logistics and transportation,

petrochemicals, renewable energy, retail, textiles and readymade garments and tourism.

411
Great Socialist People’s
Libyan Arab Jamahiriya
Geography and People

Northern Africa, bordering the Mediterranean Sea, between Egypt and

Location
Tunisia

Area 1 759 540km2

Capital city Tripoli

Other major
Banghazi, Darnah, Ghadamis, Gharyan, Misratah, Marzuq, Sabha, Surt
cities

Climate Mediterranean along coast; dry, extreme desert interior

Natural
Petroleum, natural gas, gypsum
resources

Key ports Ports of Tripoli, As Sidrah and Zawiyah

Population 6 310 434 (2009 est.)

Population
2,17% (2009 est.)
growth rate

Life
77,26 years
expectancy

0 – 14 years: 33%
Age
15 – 64 years: 62,7%
distribution
65 years and over: 4,3%

Languages Arabic, Italian, English

Berber and Arab (97%), other (includes Greeks, Maltese, Italians,

Ethnic groups
Egyptians, Pakistanis, Turks, Indians and Tunisians) (3%)

Religions Sunni Muslim (97%), other (3%)

412
Economy
Current account (as % of GDP) 16,7%

Savings rate (% of GDP) -

Foreign direct investment flows US$4,1 billion

Size of labour force 1,64 million (2008 est.)

Unemployment 30% (2004 est.)

Currency Libyan dinar (LYD)

2007 2008

Average exchange rate (versus US$) 1,2604 1,2112 (est.)

GDP US$71,69 billion US$89,92 billion

GDP growth rate 7,5% 3,4%

GDP per capita (PPP) US$13 700 (est.) US$14 200 (est.)

GNI US$90,55 billion US$98,10 billion

GNI per capita (PPP) US$14 710 US$15 630

Inflation rate (consumer prices) 6,3% (est.) 10,4% (est.)

Growth and Structure of the Economy

Libya has a very small population and boasts one of the highest per capita GDPs in

Africa. In terms of overall contributions to national GDP, activity in the economy is focused

primarily in industry (70,9%), services (27,4%) and agriculture (1,7%). The country’s

economy is heavily dependent on revenues from natural resources, particularly in the

oil sector. Libya is the third-largest oil producer in Africa, and has the largest proven oil

413
reserves on the continent. The oil sector contributes about 95% of the country’s total

export earnings, more that two-thirds of GDP, and close to 60% of public sector wages.

Apart from the oil sector, Libya is also highly dependent on iron and steel, food processing,

textiles, handicrafts and cement industries, which account for about 20% of the country’s

GDP.

In the past, the productivity and growth of key sectors in the economy have been hindered

by international economic sanctions imposed by both the United Nations (between 1992

and 1999) and the USA (between 1986 and 2006). Since the sanctions have been lifted,

Libya has embarked on a process of economic reform aimed primarily at expanding its

oil and gas industry. However, the country’s overwhelming dependence on the oil sector

means that its economic growth is contingent, to a certain extent, on developments in the

international oil market. Indeed, the country’s growth is almost entirely driven by exports,

government investment and public consumption that all either depend directly or indirectly

on the energy sector. Encouragingly, however, recent real GDP growth has been driven

by both the expansion of the hydrocarbon sector as well as a rapid increase in non-oil

activities.

Trade

Exports and Imports 2007 2008

Total exports US$46,97 billion (est.) US$64,5 billion (est.)

Export growth rate - -0,8%

Total imports US$17,7 billion (est.) US$26,55 billion (est.)

Import growth rate - 26,3%

414
International Trade
Aside from the USA (6,4%), the rest of Libya’s major export partners are European:

Italy (38%), Germany (12%), France (7,4%), Spain (6,9%) and Switzerland (4,6%). Its

main export earnings come from crude oil, refined petroleum products, natural gas and

chemicals.

Libya imports about 75% of its food along with machinery, semi-finished goods, transport

equipment and consumer products. Its main import partners are Italy (22,2%), China

(9,3%), Germany (8,6%), Turkey (6,1%), Tunisia (5,8%), South Korea (4,7%), the USA

(4,1%) and France (4,1%).

Trade with South Africa

(Rands ‘000) 2007 2008 2009

Total exports 38 489 40 432 51 231

Total imports 77 2 429 657 412 181

Trade balance 38 412 -2 389 226 -360 950

Bilateral Agreements with South Africa

• Reciprocal Protection and Promotion of Investments Agreement (2002) (signed but
not yet ratified); and
• Bilateral Trade Agreement (2002).

Barriers to Trade
Tariffs have been completely eliminated and customs duties have been cancelled on

more than 3 500 product categories in Libya. In addition, import controls have been eased

since the lifting of sanctions by the United Nations. However, the country’s import controls

remain restrictive even by regional standards. A flat 4% ‘service fee’ is levied on most

415
imported products. Other prominent barriers to trade include import bans and restrictions,

other import fees, non-transparent and discretionary regulation, ageing infrastructure,

state trade in petroleum products, subsidies, and customs corruption as a result of a

customs system that lacks transparency.

Business Climate
Infrastructure and Trade

Number of power outages in a typical month -

Average time to clear direct exports through customs (days) -

Average time to clear imports through customs (days) -

Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business - Getting credit -

Starting a business - Protecting investors -

Dealing with construction

- Paying taxes -
permits

Employing workers - Trading across borders -

Registering property - Enforcing contracts -

Closing a business -

Business Travel, Culture, Risk and Investment

Direct flights are available from South Africa to Libya. In addition, several airlines do

connecting flights, including Egypt Air via Cairo, Emirates via Dubai, British Airways via

London and South African Airways via Cairo. South African passport holders require a

visa to enter Libya. Furthermore, all passports need to be translated into Arabic, and exit

visas are required.

416
Most business dealings take place with state organisations and English is widely

understood. It is, however, government policy for official documents to be in printed in

Arabic (or translated into Arabic) and for official business to be conducted in Arabic.

Appointments are necessary and business cards are useful, though not widely used.

Furthermore, it is advised not to undertake business transactions during the month of

Ramadan.

Despite Libya’s commitment to foreign investment, the biggest risk facing potential

investors relates to the uncertainty surrounding the government’s economic policy

direction.

Regulatory Policy Framework for Businesses

Since 2003, the lifting of international sanctions, coupled with the government’s new

policy of encouraging foreign investment, have improved the country’s attractiveness to

international investors. However, foreign investors do not enjoy national treatment and all

foreign investment is screened by the government. Foreign investors are also required

to meet additional regulatory requirements before investment projects are approved. For

instance, Libyan nationals or companies must hold a minimum share of at least 35% in

any foreign business.

Furthermore, Libya’s regulatory environment places significant restrictions on the freedom

to start, operate and close a business in the country. Libya is also prone to unfavourable

and non-transparent tender procedures; and the country lacks a clear economic and

investment policy direction aimed at protecting investments.

Both residents and non-residents are permitted to hold foreign currency accounts provided

that prior approval has been granted. Approval is also required for the repatriation of most

capital transactions, which are also subject to controls.

417
Foreign investment projects are authorised in terms of Law Number 5, which authorises

the granting of five-year operating licences (that can be extended for a further three

years). This law contains provisions for the establishment of partnerships between Libyan

nationals and foreign investors. Notably, foreign investment projects are freed from many

of the main legal obligations that govern the activity of Libyan companies.

Opportunities for South African Businesses

Since the lifting of international sanctions in 2003, Libya has once again emerged as

an influential and attractive investment opportunity in North Africa. The agro- and food-

processing, base metals, mineral products, vehicles, aircrafts and vessels, machinery,

prepared foods and beverages, plastic and rubbers, and pneumatic-tyre industries all

offer excellent opportunities.

Potential investment opportunities are also present in the banking, oil and gas exploration,

tourism, hotel development, infrastructure and reconstruction, telecommunications, ICT

and manufacturing sectors.

Currently, the Libyan Investment Authority holds approximately US$65 billion in investment

funds, which is likely to further encourage FDI, particularly in the country’s hospitality

industry.

418
419
Islamic Republic
of Mauritania
Geography and People

Northern Africa, bordering the North Atlantic Ocean, between Senegal

Location
and Western Sahara

Area 1 030 700km2

Capital city Nouakchott

Other major
Nouadhibou, Kaedi, Kiffa, Rosso
cities

Climate Desert; hot, dry, dusty

Natural
Iron ore, gypsum, copper, phosphate, diamonds, gold, oil, fish
resources

Key ports Ports of Nouadhibou and Nouakchott

Population 3 129 486 (2009 est.)

Population
2,399% (2009 est.)
growth rate

Life
60,37 years
expectancy

0 – 14 years: 41%
Age
15 – 64 years: 55,7%
distribution
65 years and over: 3,4%

Languages Arabic (official), Pulaar, Soninke, Wolof, French, Hassaniya

Ethnic groups Mixed Moor/Black (40%), Moor (30%), Black (30%)

Religions Muslim (100%)

420
Economy
Current account (as % of GDP) -9% (2009 est.)

Savings rate (% of GDP) 28,65 (2006 est.)

Foreign direct investment flows US$103 million

Size of labour force 1,318 million (2007)

Unemployment 30% (2008 est.)

Currency Ouguiyas (MRO)

2007 2008

Average exchange rate (versus US$) - -

GDP US$2,82 billion US$3,16 billion

GDP growth rate 1% 2,2%

GDP per capita (PPP) US$2 000 (est.) US$ 2 100 (est.)

GNI US$6,26 billion -

GNI per capita (PPP) US$2 000 -

Inflation rate (consumer prices) 7,3% (est.) -

Growth and Structure of the Economy

Mauritania has a strong agricultural sector, which contributes about 12,5% to national

GDP. The industrial and services sectors, on the other hand, contribute significantly larger

shares of 46,7% and 40,7% to the national economic output, respectively.

Iron ore is Mauritania’s main export, accounting for 40% of total exports. Iron ore exports

have, however, been adversely affected by a decline in the global demand for iron ore.

Fish processing represents another industry of central importance in the country, and

421
Mauritania is renowned for possessing one of the world’s richest offshore fishing stocks.

While the fishing sector only contributes 5% of national GDP, it does provide 15% of

total export revenue and 25% of government revenues; and some 30 000 people are

employed in the sector. The country also boasts significant deposits of oil, gold, copper

and gypsum.

Recent growth in the economy has been driven primarily by growth in the mining

(particularly iron, copper and gold), agriculture and construction sectors. However, macro-

economic stability has been affected by drought in the country, together with steadily

increasing foreign debt, which currently amounts to more than three times the level of

annual exports.

Trade

Exports and Imports 2007 2008

Total exports - -

Export growth rate - 1,1%

Total imports - -

Import growth rate - 14,3%

International Trade
The Mauritanian economy is heavily dependent on exports of iron ore, fish and fish

products. The country also exports gold, copper and petroleum. China is Mauritania’s

main export partner, accounting for 41,1% of total exports. Other significant export

partners include France (10,2%), Spain (7%), Italy (6,9%), the Netherlands (5,4%),

Belgium (4,7%) and Côte d’Ivoire (4%).

422
Mauritania imports mainly machinery and equipment, petroleum products, capital goods,

foodstuffs and consumer goods, with France (16,7%), China (8,8%), the Netherlands

(6,4%), Spain (6%), Belgium (5,4%), the USA (5,1%) and Brazil (4,5%) representing the

country’s key import partners.

Trade with South Africa

(Rands ‘000) 2007 2008 2009

Total exports 136 940 128 717 139 656

Total imports 594 857 409 1 235

Trade balance 136 345 -728 691 138 421

Bilateral Agreements with South Africa

• None

Barriers to Trade
The country’s weighted average tariff rate was 10,1% in 2007. Barriers to trade in

Mauritania have been reduced significantly since the onset of economic and trade

liberalisation in the country in the early 1990s. Nevertheless, trade is affected by import

restrictions, import taxes, weak enforcement of intellectual property rights, inadequate

infrastructure and trade capacity, non-transparent customs administration procedures,

and delays in transferring money for payment to suppliers from local banks.

Business Climate
Infrastructure and Trade

Number of power outages in a typical month 3,71 (2006)

Average time to clear direct exports through customs (days) 3,86 (2006)

Average time to clear imports through customs (days) 6,75 (2006)

423
Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 166 Getting credit 150

Starting a business 149 Protecting investors 147

Dealing with construction
154 Paying taxes 175
permits
Employing workers 125 Trading across borders 163

Registering property 74 Enforcing contracts 83

Closing a business 150

Business Travel, Culture, Risk and Investment

There are no direct flights available to Mauritania from South Africa. The most convenient

option is to fly with South African Airways from Johannesburg to Dakar in Senegal, and

then fly from Dakar to Mauritania’s capital city, Nouakchott (as the duration of the flight

from Dakar to is only 35 minutes). South African passport holders require a visa to enter

Mauritania.

Although the official language of the country is Arabic, it is essential that business people

have a sound knowledge of French. English is not widely spoken. Furthermore, it is

advised not to undertake business transactions during the month of Ramadan.

The main investment and business risks posed by Mauritania are the high inflation

rates in the domestic economy, weak infrastructure and the poorly skilled labour force.

Political instability also represents a risk to investment in Mauritania. In 2008, the country

experienced a coup d’état leading to its suspension from the African Union.

424
Regulatory Policy Framework for Businesses
Foreign investors generally receive the same treatment as local investors in Mauritania,

subject to the individual provisions of treaties and agreements concluded between the

Mauritanian government and the relevant country from which the investment originates.

Nonetheless, the success of foreign investors often depends in a large part on their

successful collaboration with local partners who understand the local market. Through

the Consolidated Office for Investment (guichet unique) the government of Mauritania

performs mandatory screening of foreign investment which is routine and non-

discriminatory. Indeed, the country has a non-discriminatory policy with regards to foreign

investment, with the only exception in the case of fishing boats where foreign investment

is limited to a 49% share.

In order to invest in Mauritania, investors are first required to obtain an investment

Certificate. This can be obtained by presenting their proposal and all required documents

to the Guichet Unique.

The country’s new Investment Code, approved during 2001, has improved the opportunities

for direct foreign investment in the country. Under the terms of the Investment Code,

foreign investors are exempted from all customs duties on equipment and goods imported

for export-oriented projects. The Investment Code guarantees both local and foreign

investors the freedom to transfer foreign capital and to transfer the professional income

of foreign employees. Notably, while the Code applies to all sectors in the economy,

a selection of sub-sectors are governed by specific laws and regulations, including:

purchasing for resale on the local market without further processing; activities governed

by the country’s banking laws (with the exception of leasing activities); activities governed

by insurance regulations; activities in the mining and petroleum sectors; communications

and telecommunications; and water and electricity supply.

425
The income tax rate in Mauritania is relatively high, with a top income tax rate of 40%.

In comparison, the corporate tax rate is more moderate, with the top corporate tax rate

levied at 25%. In addition to these taxes, businesses also face VAT and tax on insurance

contracts.

Opportunities for South African Businesses

Investors are lured to Mauritania due to its liberal economic environment and strategic

geographical location – the country serves as the crossroads between North Africa

and SSA. The country offers diversified investment opportunities in the exploitation of

oil and natural resources, with gold, diamond, copper and gypsum deposits still largely

unexploited; information technology; telecommunications; and tourism.

426
427
Kingdom of
Morocco
Geography and People

Northern Africa, bordering the North Atlantic Ocean and the Mediterranean
Location
Sea between Algeria and Western Sahara

Area 446 550km2

Capital city Rabat

Other major
Casablanca, Fes, Marrakech
cities

Climate Mediterranean, becoming more extreme in the interior

Natural
Phosphates, iron ore, manganese, lead, zinc, fish, salt
resources

Key ports Ports of Agadir, Casablanca, Mohammedia and Safi

Population 34 859 364 (2009 est.)

Population
1,479% (2009 est.)
growth rate
Life
71,8 years
expectancy

0 – 14 years: 30%
Age
15 – 64 years: 64,7%
distribution
65 years and over: 5,2%

Languages Arabic (official), Berber dialects, French

Ethnic groups Arab-Berber (99,1%), other (0,7%), Jewish (0,2%)

Religions Muslim (98,7%), Christian (1,1%), Jewish (0,2%)

428
Economy
Current account (as % of GDP) -5,5%

Savings rate (% of GDP) 34,47%

Foreign direct investment flows US$2,4 billion

Size of labour force 11,29 million (2008 est.)

Unemployment 9,5% (2008 est.)

Currency Moroccan Dirham (MAD)

2007 2008

Average exchange rate (versus US$) 8,3563 7,526 (est.)

GDP US$75,22 billion US$88,88 billion

GDP growth rate 2,7% 5,6%

GDP per capita (PPP) US$4 200 (est.) US$4 500 (est.)
US$125,13
GNI US$135,31 billion
billion
GNI per capita (PPP) US$4 050 US$4 330

Inflation rate (consumer prices) 2% (est.) 3,8% (est.)

Growth and Structure of the Economy

While the primary sector is the mainstay of the Moroccan economy, the share of the

secondary and tertiary sectors in GDP has risen significant in recent years. Indeed, the

main sectors contributing to economic growth in Morocco are services (54,1%), industry

(30,1%) and agriculture (15,7%). The country’s major industries include phosphate rock

mining and processing, food processing, leather goods, textiles, construction and tourism.

Morocco also boasts a strong financial sector.

429
In recent years, the economy’s non-agricultural sectors have collectively recorded an

annual growth rate of more than 6% on the back of good performance in the industrial,

construction and public works, transport and telecommunications sectors.

Since the early 1990s, Moroccan economic policies have brought about macro-economic

stability in the country, which has greatly contributed to economic growth as well as the

reduction of unemployment rates and poverty. In addition, FDI has increased since 2004

when the country signed a free trade agreement with the USA (effective from January

2006) and sold government shares in the state telecommunications company and the

largest state-owned bank.

Trade
Exports and Imports 2007 2008

Total exports US$15,15 billion (est.) US$20,17 billion (est.)

Export growth rate - 4,0%

Total imports US$29,32 billion (est.) US$39,35 billion (est.)

Import growth rate - 6,8%

International Trade
Morocco’s main export commodities are clothing and textiles, electric components, inorganic

chemicals, transistors, crude minerals, fertilisers (including phosphates), petroleum

products, citrus fruits, vegetables and fish. The country’s chief export partners are Spain

(19,2%), France (17,6%), Brazil (7,1%), the USA (4,5%), Belgium (4,5%) and Italy (4,3%).

Morocco’s principal imports are crude petroleum, textile fabric, telecommunications

equipment, wheat, gas and electricity, transistors and plastic. The country’s main import

partners are France (16,1%), Spain (13,5%), Italy (6,5%), China (6%), Germany (5,6%),

Saudi Arabia (5,4%) and Moldova (5%).

430
Trade with South Africa

(Rands ‘000) 2006 2007 2008

Total exports 996 683 1 041 798 1 498 373

Total imports 49 425 44 395 60 822

Trade balance 947 258 997 403 1 437 551

Bilateral Agreements with South Africa

• None

Barriers to Trade
In 2008, Morocco’s weighted average tariff rate stood at 9,4%. Some prohibitive tariffs

exist on imported goods, as well as import restrictions and import taxes on certain goods.

Major non-tariff barriers include services market access barriers, restrictive biotechnology

regulations and export incentives. Other non-tariff barriers to trade in Morocco include

irregularities in government procedures, lack of transparent governmental and judicial

bureaucracies, inefficient transport systems, and low-level corruption, all of which add to

the cost of trade. A further obstacle is the customs tariff, which is based on the Harmonised

Commodity Description and Coding Systems (HS) of classification.

Business Climate
Infrastructure and Trade

Number of power outages in a typical month 2,50 (2007)

Average time to clear direct exports through customs (days) 1,81 (2007)

Average time to clear imports through customs (days) 3,75 (2007)

431
Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 128 Getting credit 87

Starting a business 76 Protecting investors 165

Dealing with construction

99 Paying taxes 126
permits

Employing workers 176 Trading across borders 72

Registering property 123 Enforcing contracts 108

Closing a business 67

Business Travel, Culture, Risk and Investment

There are several flights available from Johannesburg to the major cities of Rabat and

Casablanca in Morocco. South African passport holders require a visa to enter Morocco.

For anyone wanting to do business in Morocco it is recommended that appointments are

made well in advance. Doing business in the country is well known for being a lengthy

process and involving negotiations with extensive bargaining and several different

players. Furthermore, it is advised not to undertake business transactions during the

month of Ramadan.

Regulatory Policy Framework for Businesses

Law Number 18-95 (establishing the Investment Charter) was passed by the Moroccan

government and is aimed at developing and promoting investment by improving the

environment for investment in the country and taking measures to encourage investment

in key sectors. The government has also tried to attract foreign investment by reforming

investment laws, lowering import barriers, reforming the judiciary and the labour market,

reducing red tape and corruption, improving the financial sector, privatising state firms

and offering concessions.

432
In accordance with the 1995 Investment Charter, Morocco treats both local and foreign
investment opportunities equally and permits 100% foreign ownership in most sectors.
Foreign investors are favoured in foreign exchange provisions. Screening is not a
requirement, but foreign investment in some sectors – particularly phosphate mining – is
restricted. Foreign investors benefit from streamlined administrative procedures operated
by Regional Investment Centres. However, the mandates of these Centres are limited to
investments that do not exceed US$200 million. Investments in excess of this value are

dealt with by a special ministerial committee chaired by Morocco’s Prime Minister.

Despite structural adjustment programmes supported by the IMF, the World Bank and the
Paris Club, the Dirham is only convertible for current account transactions and Morocco’s
financial sector remains rudimentary. For all imports, the government requires that
import certificates be registered with an authorised bank where payments can be made
on the submission of the required documents. The exchange bureau will handle foreign
exchange control. At the Port of Tangier, there is a free trade zone and merchandise

entering the zone is exempt from customs, fiscal and exchange control.

Corporate and income tax rates in Morocco are relatively high. The top income tax rate is

42%, and the corresponding corporate tax rate is 30% (having been reduced from 35% in

2008). Notably, credit institutions and leasing companies are subject to a higher tax rate

of 37%. Additional taxes in operation in the country include VAT, a gift tax and property tax.

Opportunities for South African Businesses

Morocco is advantageously located as the western most country in North Africa, placing

it in close proximity to Europe (specifically Spain), separated only by a narrow body of

water. The country is also closely linked to the EU.

The most influential sectors open to investors are agri-food, fishing, phosphates,

electronics, automotive and aeronautical sub-contracting, textiles, clothing and leathers,

building and public works, tourism, telecommunications and transport.

433
Tunisian Republic
Geography and People

Northern Africa, bordering the Mediterranean Sea, between Algeria and

Location
Libya

Area 163 610km2

Capital city Tunis

Other major
Safãqis, Sousse, Tataouine
cities

Temperate in north with mild, rainy winters and hot, dry summers; desert
Climate
in south
Natural
Petroleum, phosphates, iron ore, lead, zinc, salt
resources

Key ports Ports of Bizerte, Gabes, La Goulette, Rades and Sfax

Population 10 486 339 (2009 est.)

Population
0,98% (est.)
growth rate

Life
75,78 years
expectancy

0 – 14 years: 22,7%
Age
15 – 64 years: 70,1%
distribution
65 years and over: 7,2%

Languages Arabic (official), French

Ethnic groups Arab (98%), European (1%), Jewish and other (1%)

Religions Muslim (98%), Christian (1%), Jewish and other (1%)

434
Economy
Current account (as % of GDP) -3,8%

Savings rate (% of GDP) 25,44%

Foreign direct investment flows US$2,8 billion

Size of labour force 3,66 million (2008 est.)

Unemployment 14,1% (2008 est.)

Currency Tunisian Dinar (TND)

2007 2008

Average exchange rate (versus US$) 1,2776 1,211 (est.)

GDP US$35,61 billion US$40,84 billion

GDP growth rate 6,3% 4,6%

GDP per capita (PPP) US$7 600 (est.) US$7 900 (est.)

GNI US$73,01 billion US$72,99 billion

GNI per capita (PPP) US$7 140 US$7 070

Inflation rate (consumer prices) 3,1% (est.) 5% (est.)

Growth and Structure of the Economy

Tunisia has a diverse economy with major petroleum, mining (specifically phosphates and

iron ore), tourism, clothing and leather, footwear, agri-business and beverages industries.

Tunisia also boasts a booming ICT sector, which is supported by proactive policies aimed

at promoting the country as a knowledge economy. On average, the agricultural sector

contributes an estimated 10,5% of national GDP; however, this contribution is frequently

affected by drought in the country. The other main sectors contributing significantly to

national GDP in Tunisia are industry (37%) and services (52,5%).

435
Privatisation, the simplification of the tax structure and a prudent approach to debt all

indicate that the government is relaxing its control on economic affairs. The Tunisian

Government has taken several measures to boost growth in the country’s agricultural

sector, including raising cereal prices to increase output, providing free irrigation to cereal

producers in irrigated public areas and expanding scientific research on resistance to

drought and disease. Growth in the country’s manufacturing sector is driven primarily by

the mechanical and electrical engineering and agribusiness industries. Strong growth has

also been recorded in the services sector in recent years, largely as a result of the growth

performance of the ICT sector and financial institutions.

Trade
Exports and Imports 2007 2008

Total exports US$15,15 billion (est.) US$19,22 billion (est.)

Export growth rate - 3,0%

Total imports US$18,02 billion (est.) US$23.23 billion (est.)

Import growth rate - 5,1%

International Trade
Tunisia has the tendency to trade primarily with its neighbouring countries and European

states. Its major export partners are France (28,3%), Italy (17,9%), Germany (9,6%),

Libya (5,8%) and Spain (5%). Tunisia’s chief exports are clothing, semi-finished goods

and textiles, agricultural products, mechanical goods, phosphates and chemicals,

hydrocarbons and electrical equipment.

Tunisia’s major import commodities are textiles, machinery and equipment, hydrocarbons,

chemicals and foodstuffs. The country’s major import partners are France (21,5%), Italy

(19,3%), Germany (9%), Libya (4,6%) and Spain (4,5%).

436
Trade with South Africa

(Rands ‘000) 2005 2006 2007

Total exports 40 691 66 963 110 840

Total imports 24 526 82 289 74 352

Trade balance 16 165 -15 325 36 488

Bilateral Agreements with South Africa

• Convention and Protocol for the Avoidance of Double Taxation and the Prevention of
Fiscal Evasion with respect to Taxes on Income (1999);
• Bilateral Trade Agreement (2001); and
• Reciprocal Protection and Promotion of Investments Agreement (2002) [signed but
not yet ratified].

Barriers to Trade
In 2006, Tunisia’s weighted average tariff rate was comparatively high at 18,3%. The

primary barriers to trade in the country are import restrictions, some prohibitively high

import tariffs, import taxes and fees and import licensing requirements. In addition, there

are numerous inconsistencies concerning procedures within customs administration,

which pose significant problems for importers. Furthermore, the Tunisian Government’s

use of non-tariff barriers has sometimes resulted in the delay or rejection of goods shipped

from the country.

Business Climate
Infrastructure and Trade

Number of power outages in a typical month -

Average time to clear direct exports through customs (days) -

Average time to clear imports through customs (days) -

437
Ease-of-Doing-Business Rankings 2010 (out of 183 economies)

Doing business 69 Getting credit 87

Starting a business 47 Protecting investors 73

Dealing with construction

107 Paying taxes 118
permits

Employing workers 108 Trading across borders 40

Registering property 59 Enforcing contracts 77

Closing a business 34

Business Travel, Culture, Risk and Investment

Many airlines fly between Johannesburg and Tunis, the Tunisian capital city. South African

passport holders are required to obtain a visa to travel to Tunisia. Visas are valid for 1

month on arrival at the port of entry.

Scheduling prior appointments for business engagements is recommended and should

be made well in advance. It is also best not to schedule meetings between July and

August when the heat in the country is at its most intense. Furthermore, it is advised not to

undertake business transactions during the month of Ramadan. French is the language of

business in the country, and the use of an interpreter is recommended if fluency in French

is a problem. In general, Tunisians have an open-door policy, even during meetings. This

means you may experience frequent interruptions.

Despite the fact that FDI is welcomed in Tunisia, there are restrictions on foreign

investment in some sectors. In order to minimise the impact of investment on domestic

competitors and employment, the Tunisian Government screens potential FDI.

438
Regulatory Policy Framework for Businesses
The Investment Code Law covers all major sectors of economic activity in Tunisia, with

the exception of mining, energy, the financial sector and domestic trade. In terms of the

Investment Code Law, potential investments are divided into two categories: offshore
(in which foreign capital accounts for at least 66% of equity and a minimum of 80% of
production is exported) and on-shore (in which foreign equity is limited to 49% in most
non-industrial projects). The legislation contains two major hurdles for potential FDI.
Firstly, foreign investors are denied national treatment in the agriculture sector, as foreign
ownership of agricultural land is prohibited – although land can be secured through long-
term (up to 40-year) leases. Secondly, for onshore companies outside the tourism sector,

government authorisation is required where foreign capital share exceeds 49%.

Notably, for investments in manufacturing industries, agriculture, agribusiness, public

works and certain services, a simple declaration of intent to invest is required. However,

other sectors may require authorisation from the Tunisian government.

The Tunisian Dinar is not fully convertible, and it is illegal to take Dinars out of the country.
Non-residents are exempt from most exchange regulations; and foreign investors are
permitted to transfer returns on investments without prior authorisation.

The income tax rate in Tunisia is relatively high, with a top income tax rate of 35%. In
turn, the top corporate tax rate is 30%. Notably, the hydrocarbons sector and financial
institutions are subject to a special tax scheme. Other relevant taxes include VAT, a

property transfer tax, an inheritance tax and a vehicle tax.

Opportunities for South African Businesses

Tunisia boasts a competitive and open economy, skilled human resources and fast-
growing infrastructure that make it an attractive location for investment. Major industries
offering good investment potential in Tunisia include ICT, electronics, textiles, food and
leather and shoes.

439
ANNEXURE I South African Representation
on the Continent

Algeria: Democratic People’s Republic of

South Africa

Telephone and
Address E-mail Address
fax numbers

Physical Address: Tel.: +27 213 21 23 0389

30, Rue Capitain Hocine Tel.: +27 213 21 23 0904
[email protected]
Slimane Fax: +27 213 21 23 0827
El Biar, Algiers

Angola: Republic of
South African Embassy

Telephone and
Address E-mail Address
fax numbers

Physical Address: General e-mail:

Edificio Maianga 1º Postal address: [email protected]
Tel.: +244 233 0593
e 2º Andar Caixa Postal 6212 Trade enquiry:
Tel.: +244 233 4187
Rua Kwamme Luanda [email protected]
Fax: +244 2398 730
Nkrumah 31 Angola Admin. enquiry: saemb.
Largo da Maianga [email protected]
Luanda Website: www.sambangola.info

Benin: Republic of
South African Embassy

Telephone and
Address E-mail Address
fax numbers

Physical Address: Tel.: +225 2244 5963

Admin. enquiry:
Lot F4, (Behind Air Force) Tel.: +225 2244 7534
[email protected]
Cotonou – Embassy accredited Admin. and Consular Fax:
from Côte d’Ivoire +225 2244 7450

440
Botswana: Republic of
South African High Commission

Telephone and
Address E-mail Address
fax numbers

Tel.: +267 3904 800

Postal address:
Physical Address: Tel.: +267 3904 801
Private Bag 00402
Plot 29 Tel.: +267 3904 802
Gaborone [email protected]
Queens Road Tel.: +267 3904 803
Republic of
Gaborone Fax: +267 390 5501
Botswana
Admin. Fax:+267 390 5502

Burkina Faso: People’s Republic of

South African Embassy

Address Telephone and Fax Numbers E-mail Address

Physical Address:
Tel.: +226 5037 6098
Villa 110
Fax: +226 5037 6097 [email protected]
Hotel Ouaga2000
Ouagadougou

Burundi: Republic of
South African Embassy

Telephone and Fax

Address E-mail Address
Numbers

Physical Address: Tel.: +257 2224

Postal address:
Av. de la Plage 8220/1/2/3
B.P. 185
Parcel number 6510/ Tel.: +257 2224 4650
Bujumbura [email protected]
DIV.A Admin. Fax: +257 2224
Burundi
Quartier Asiatique 8219
Bujumbura, Burundi

441
Cameroon: Republic of
South African High Commission

Telephone and Fax

Address E-mail Address
Numbers

Physical Address: Postal address:

Tel.: +242 81 08 49
Rue 1801 B.P.1636 Admin.:
Tel.: +242 660 0211
Bastos Yaoundé [email protected]
Fax: +27 11 507 6073
Yaoundé Cameroon

Cape Verde
· Representation accredited from Dakar, Senegal

Central African Republic

· Representation accredited from Yaoundé, Cameroon
Telephone and Fax
Address E-mail Address
Numbers
Physical Address:
Tel.: +236 61 8 12
2nd Floor Postal address:
(Engaged)
Immeuble SOCIM B.P.1636
Cameroon Tel.:
B.P. 1613 Yaoundé [email protected]
+237 2220 0438
Bangui Cameroon
Admin.:
Central African
Fax: +236 61 89 12
Republic

Tel.: +242 81 08 49
82 Avenue [email protected]
Tel.: +242 660 0211
Marechal Lyautey Admin.:
Fax: +27 11 507 6073
Brazzaville [email protected]

443
DRC (Democratic Republic of the Congo)
South African Embassy

Telephone and Fax

Address E-mail Address
Numbers

Physical Address:
Postal address: Admin. Mobile:
77 Avenue Ngongo
B.P. 7829 +243 81 700 5414
Lutete
Kinshasa 1 Admin. Mobile:
Gombe
DR Congo +243 81 293 6888
Kinshasa
Admin. Mobile: -
South African Consulate General
+243 81 700 8685
1 Avenu Chef Kienge
Admin. Fax:
Lubumbashi
+243 81 555 4321
Katanga
DR Congo

Djibouti
· Representation accredited from Addis Ababa, Ethiopia

Egypt (Arab Republic)

South African Embassy

Admin.:
Address Postal address:
[email protected]
House 51/53 PO Box 11447 Consular and Admin.
Hitseito Street 245 Asmara Fax: +291 11 52 538
Consular:
Tiravalo Eritrea Fax: +291 11 53 072
[email protected]
Asmara

Ethiopia: Federal Democratic Republic of

South African Embassy

Telephone and Fax

Address E-mail Address
Numbers

Tel.:
Physical Address:
+251 11 371 1002
Nifasilk Lafto,
Postal address: Tel.:
Subcity
PO Box 1091 +251 11 371 0272
Kebele 03 [email protected]
Addis Ababa Tel.:
South Africa Street
Ethiopia +251 11 372 4761
(Old Airport Area)
Fax:
Addis Ababa
+251 11 371 3035

445
Gabon: Republic of
South African Embassy

Telephone and
Address E-mail Address
Fax Numbers

Physical Address:
Address
Les Arcades Postal address: Tel.: +241 77 4530
Consular and Admin.:
Building, 2nd Floor B.P. 4063 Tel.: +241 77 4531
[email protected]
142 Rue de Libreville Fax: +241 77 4536
[email protected]
Chavannes Gabon
Centreville
Libreville

Gambia
• Representation accredited from Dakar, Senegal

Telephone and Fax

Address E-mail Address
Numbers

Physical Address::
Tel.: +220 4462 755
Residence: 23 Sait Postal address::
Tel.: +220 4462 855
Matty Road PO Box 4555 [email protected]
Tel.: +220 4462 555
Bakau Kotu Bakau
Tel.: +220 4496 555
(next to the gantel Gambia
Fax: +220 461 955
exchange)

Ghana: Republic of
South African High Commission

Telephone and Fax

Address E-mail Address
Numbers

Physical Address:
Tel.: +233 21 740 450
Speed House Postal address::
Tel.: +233 21 768 477 [email protected]
No. 1, 3rd Soula PO Box 298
Tel.: +233 2176 2380 [email protected]
Street Trade Fair
Tel.: +233 2176 4480
Labone North Accra, Ghana
Fax: +233 21 762 381
Accra

446
Guinea: Republic of
South African Embassy (Accredited from Senegal)

Address Telephone and Fax Numbers E-mail Address

Physical Address:
Tel.: +224 30 49 0875/6/7
Coleah
[email protected]
Mossoudougou
Fax: +224 30 49 0879
Conakry

Guinea-Bissau: Republic of
South African Embassy

Telephone and Fax

Address E-mail Address
Numbers

Physical Address:
c/o Bissau Palace Postal address:: Tel.: +245 665 5444
Hotel B.P. 1334 (Ambassador)Tel.: +245
[email protected]
Room No. 9 Bissau 667 8910 (Political and
Av. 14 de Novembro Guinea-Bissau Corporate Services)
Bissau

Kenya
South Africa High Commission

Telephone and Fax

Address E-mail Address
Numbers

Physical Address:
Tel.: +254 20 282 7100
3rd Floor Postal address:: [email protected]
Fax: +254 20 273 6393
Roshanmaer Place PO Box 42441 (Admin.)
(Admin.)
00100 Nairobi, 00100
Lenana Road Kenya
Nairobi

447
Lesotho
South African High Commission

Telephone and Fax

Address E-mail Address
Numbers

Postal address:
Physical Address:
Private Bag A266 [email protected]
Cnr of Kingsway Rd Tel.: +266 2231 5758
Maseru 0100 [email protected]
and Old School Rd Fax: +266 2232 5228
Kingdom of (Admin.)
Maseru
Lesotho

Liberia
• Representation accredited from Abidjan, Côte d’Ivoire

Libya (The Great Socialist People’s Libyan Arab Jamahiriya)

Telephone and
Address E-mail Address
fax numbers

Postal address:: Tel.: +218 21 444 7225

Physical Address:: PO Box 1230
Al-Jamhuriyah Street Tripoli Admin. Fax:
[email protected]
(Al-Qadisiyah Square) The Great +218 21 334 0432
Bin Ashour Socialist People's
Tripoli Libyan Arab Consular Fax:
Jamahiriya +218 21 333 9250

Madagascar

Telephone and
Address E-mail Address
fax numbers

Admin.:
Physical Address:: Postal address::
antananarivo.admin@foreign.
Lot IVO 68 Bis, Rue B.P. 12101-05 Tel.: +261 20 224 3350
gov.za
Ravoninahitriniarivo Zoom Tel.: +261 20 224 9482
Consular:
Ankorondrano Ankorondrano Fax: +261 20 224 9514
antananarivo.consular@
101 Antananarivo 101 Antananarivo
foreign.gov.za

448
Malawi: Republic of
South African High Commission

Telephone and
Address E-mail Address
fax numbers

Physical Address::
Postal address:: Tel.: +265 1 77 3722
3rd Floor, Kang' ombe
PO Box 30043 Tel.: +265 1 77 3597 [email protected]
House, Robert Mugabe
Lilongwe 3 Fax: +265 1 77 2571
Crescent, Lilongwe 3

Mali: Republic of
South African Embassy

Telephone and
Address E-mail Address
fax numbers

Physical
Address:: Postal address::
Batiment Diarra B.P. 2015 Tel.: +223 2029 2925
[email protected]
Hamdallaye Bamako Fax: +223 2029 2926
ACI-2000 MALI
Bamako

Mauritania: Islamic Republic of

South African Embassy

Telephone and Fax

Address E-mail Address
Numbers

Nigeria: Federal Republic of

South African High Commission

Telephone and Fax

Address E-mail Address
Numbers

Physical Address::
71 Usuma Street Tel.: +234 9 413 3776
[email protected]
off Gana Street Fax: +234 9 413 3829
Maitama, Abuja

451
Rwanda: Republic of
South African Embassy

Telephone and
Address E-mail Address
fax numbers

saembassy-kigali@yahoo.
Physical Address: Tel.: +250 252 583 185
Postal address: rwanda1.com
1370 Boulevard de Tel.: +250 252 583
PO Box 6563 Admin.:
l'Umuganda 187/8
Kacyiru-Sud [email protected]
Kacyiru-Sud Tel.: +250 252 583 189
Kigali Website:
Kigali Fax: +250 252 583 191
www.saembassy-kigali.org.rw

São Tomé e Príncipe: Democratic Republic of

South African Embassy

Telephone and Fax

Address E-mail Address
Numbers

Physical Address: Postal address:

Tel.: +239 225 733
Campo de Milho PO Box 555
Tel.: +239 225 719 [email protected]
Casa Laranja São Tomé e
Fax: +239 224 916
São Tomé Príncipe

Senegal: Republic of
South African Embassy

Telephone and Fax

Address E-mail Address
Numbers

Physical Address: Postal address: [email protected]

Tel.: +221 33 865 1959
Mermoz SUD PO Box 21010
Admin. Fax:
Lotissement Ecole de Dakar-Ponty Website:
+221 33 864 2375
Police, Dakar Senegal www.saesenegal.info

Seychelles: Republic of
South African Embassy
· Representation accredited from Port Louis, Mauritius

Sierra Leone: Republic of

South African Embassy
· Representation accredited from Abidjan, Côte d’Ivoire
452
Somalia: Republic of
South African Embassy
· Representation accredited from Addis Ababa, Ethiopia

Sudan: Republic of
South African Embassy

Telephone and fax

Zambia: Republic of
South African High Commission

Telephone and fax

Address E-mail Address
numbers

Physical Address:
Postal address: Tel.: +260 1 26 0999
26D Cheetah Road
Private Bag W369 Fax: +260 1 26 3001 [email protected]
Kabulonga
Lusaka, Zambia Admin. Fax: +260 1 26 0851
Lusaka

454
Zimbabwe: Republic of
South African Embassy

Telephone and Fax

Address E-mail Address
Numbers

Postal address: Tel.: +263 4 75 3147/8/9

Physical Address: Admin.:
PO Box A1654 Tel.: +263 4 75 3150/1/2/3
7 Elcombe Road [email protected]
Avondale, Harare Admin.:
Belgravia, Harare
Zimbabwe Fax: +263 4 75 3185

455
ANNEXURE II Trade and Investment
Contacts in Africa

Southern Africa
ANGOLA

Ministry of Industry

Address Telephone and Fax Numbers Website

Rua Sequeira Lukoki, 25 Tel.: +244 222 33 7070 www.mind.gov.ao

C.P. 594 Fax: +244 222 39 24 00
Luanda
Angola

Chamber of Commerce and Industry

Largo do Kinaxixi 14, Tel.: +244 2 444 566 www.ccia.ebonet.net

1 Andar, CP 92,
Luanda
Angola

Angola National Private Investment Agency

1420 K Street N.W Suite 600 Tel.: +202 962 0380 www.investinangola.com
Washington DC. Fax: +202 962 0381
USA

BOTSWANA

Ministry of Trade and Industry

Address Telephone and Fax Numbers Website

Gaborone City Council Tel.: +267 365 7400 www.mti.gov.bw

Private Bag 0089 Fax: +267 390 0141
Gaborone, Botswana

456
Botswana Confederation of Commerce Industry and Manpower (BOCCIM)

Address Telephone and Fax Numbers Website

BOCCIM House Tel.: +267 395 3459 www.boccim.co.bw/

Old Lobatse Road Fax: +267 397 3142
Plot 5196
Gaborone
Botswana

Botswana Export Development and Investment Authority (BEDIA)

Plot 28 Tel.: +267 318 1931 www.bedia.co.bw

Matsitama Road Fax: +267 318 1941
The Main Mall
Gaborone
Botswana

LESOTHO

Ministry of Trade and Industry Co-operatives and Marketing

Address Telephone and Fax Numbers Website

PO Box 747
Tel.: +266 22 317 454
Maseru 100 www.trade.gov.ls
Fax: +266 22 310 326
Lesotho

Lesotho Chamber of Commerce and Industry

Address Telephone and Fax Numbers Website

PO Box 79, Kingsway Avenue Tel.: +266 22 311 066 -

Maseru 100 Fax: +266 311 066
Lesotho

Lesotho National Development Corporation (LNDC)

Block A, Development House Tel.: +266 22 312 012 www.lndc.org.ls

Maseru 100 Fax: +266 22 310 038
Lesotho

Association of Lesotho Employers (ALE)

Address Telephone and Fax Numbers Website

PO Box 1509 Tel.: +266 22 315 736

Maseru Fax: +266 22 315 736

457
MADAGASCAR

Ministry of Commerce

Address Telephone and Fax Numbers Website

PO Box 454 Tel.: +261 202 636 111 www.commerce.gov.mg

Antananarivo 100 Fax: +261 202 224 541
Madagascar

MADAGASCAR

Economic Development Board of Madagascar (EDBM)

EDBM, Avenue Gal Gabriel Tel.: +261 20 22 670 40 www.ebdm.gov.mg

Ramanantsoa Fax: +261 20 22 661 05
Antaninarenina, Antananarivo
Madagascar

MALAWI

Ministry of Industry, Trade and Private Sector Development

Address Telephone and Fax Numbers Website

Gemini House Tel.: +265 177 0244 www.trade.gov.mv

PO Box 30366 Fax: +265 177 0680
Capital City
Lilongwe 3
Malawi

Malawi Confederation of Chambers of Commerce and Industry

PO Box 258 Tel.: +265 0187 1988 www.mccci.org

Blantyre Fax: +265 0187 1147
Malawi

Malawi Investment Promotion Agency

Aquarius House Tel.: +65 177 0800 www.malawi-invest.net

Private Bag 302 Fax: +265 177 1781
Capital city
Lilongwe 3, Malawi

458
MALAWI

Employers Consultative Association of Malawi (ECAM)

Address Telephone and Fax Numbers Website

Claim Building Tel.: +265 183 0151 www.ecammw.com

Glyn Jones Road Fax: +265 183 0075
P O Box 2134 Blantyre
Malawi

MAURITIUS

Ministry of Foreign Affairs, Regional Integration and International Trade

Address Telephone and Fax Numbers Website

5th Floor, New Government Tel.: +230 405 2520/17 http://foreign.gov.mu

Centre Fax: +230 208 8087
Port Louis, Mauritius

Mauritius of Commerce and Industry

3 Royal Street Tel.: +230 208 3301 www.mcci.org

Port-Louis, Mauritius Fax: +230 208 0076

Mauritius Board of Investments

Level 10, One Cathedral Tel.: +230 203 3800 www.boimauritius.com

Square Building Fax: +230 210 8560
16 Jules Koenig Street
Mauritius

Mauritius Employers Federation (MEF)

MEF-MCCI Building, Tel.: +230 466 3600 www.mef-online.org

Cybercity Fax: +230 465 8200
Ebene, Mauritius

459
MOZAMBIQUE

Ministry of Industry and Commerce

Address Telephone and Fax Numbers Website

Pr. Junho 25, 300 Tel.: +258 21 352 600 www.mic.gov.mz

C.P. 1831 Fax: +258 21 352 669
Maputo
Mozambique

Mozambique Investment and Promotion Centre

Rua da Imprensa 332 R/C Tel.: +258 21 31 3310 www.mozbusiness.gov.mz

Maputo Fax: +258 21 31 3325
Mozambique

Confederation of Business Associations of Mozambique (CTA)

Rua de Castanheda Tel.: +258 21 49 1914 www.cta.org.mz

Maputo, Mozambique Fax: +258 21 49 3094

Mozambique Chamber of Commerce

Rua Matheus Sansão Tel.: +258 21 492 210 www.ccmusa.co.mz

Muthemba n. 452 R/C Fax: +258 21 490 428
Mozambique

NAMIBIA

Ministry of Trade and Industry

Address Telephone and Fax Numbers Website

Block B, Brendan Simbwaye Tel.: +264 61 283 7111 www.mti.gov.na

Square Fax: +264 61 220 227
Goethe Street
Private Bag 13340
Windhoek, Namibia

Namibia National Chamber of Commerce and Industry

PO Box 9355 Tel.: +264 61 228 809 www.ncci.org.na

Windhoek, Namibia Fax: +264 61 228 009

439
Namibia Investment Centre

Address Telephone and Fax Numbers Website

MTI Private Bag 13340 Tel.: +264 61 2837 335 -

Windhoek, Namibia Fax: +264 61 231 001

Namibia Employers Federation (NEF)

PO Box 90194 Tel.: +264 612 44089 -

Klein Windhoek Fax: +264 612 44231
Namibia

SEYCHELLES

Ministry of Finance

Address Telephone and Fax Numbers Website

Liberty House Tel.: +248 38 2000 www.egov.sc/GovernmentA-

PO Box 313 Fax: +248 22 4708 gencies/Ministry/minfinance.
Victoria, Mahe aspx
Seychelles

Chamber of Commerce and Industry

PO Box 1399, Tel.: +248 32 8812 -

Victoria, Mahe Fax: +248 32 1422
Seychelles

Seychelles Investment Bureau

PO Box 1167 Tel.: +248 295 500 www.sib.gov.sc

2nd Floor, Caravelle House Fax: +248 225 125
Manglier Street
Victoria
Mahe

SOUTH AFRICA

Department of Trade and Industry (the dti)

Address Telephone and Fax Numbers Website

77 Meintjies Street Tel.: +27 12 394 9500 www.thedti.gov.za

Sunnyside, Pretoria Fax: +27 861 843 888
South Africa

440
SOUTH AFRICA

The South African Chamber of Commerce and Industry (SACCI)

Address Telephone and Fax Numbers Website

Chamber House Tel.: +27 11 446 3800 www.sacci.org.za

24 Sturdee Avenue, Rosebank Fax: +27 11 446 3804
Johannesburg, South Africa

Trade Investment South Africa

3rd Floor Tel.: +264 61 2837 335 -

SunClare Building, 21 Dreyer Fax: +264 61 231 001
Street Claremont, Cape Town

Business Unity South Africa (BUSA)

1st Floor, 3 Gwen Lane Tel.: +27 11 784 8000 www.busa.org.za

Sandton, Johannesburg Fax: +27 11 784 8004
South Africa

Coega Development Corporation

Private Bag X 13130 Tel.: +27 41 507 9111 www.coega.co.za

Humewood, Port Elizabeth, Fax: +27 41 585 5445
6013

Eastern Cape Development Corporation (ECDC)

PO Box 11197 Tel.: +27 43 704 5631 www.ecdc.co.za

Southernwood Fax: +27 43 7438431
East London, 5213

Free State Investment Promotion Agency (FIPA)

Private Bag X20801 Tel.: +27 51 400 4923/4 www.dteea.fs.gov.za

Bloemfontein, 9300 Fax: +27 86 521 5802

Invest North West

1 Floor Old Mutual Building

st
Tel.: +27 14 594 2570 www.inw.org.za
171 Beyers Naudé Drive Fax: +27 14 594 2575/6
Rustenberg, 0299

Gauteng Economic Development Agency (GEDA)

PO box 61840 Tel.: 0027 11 833 8750 www.geds.co.za

Marshalltown, 2107 Fax.: 0072 11 838 2137
Johannesburg, South Africa

441
SOUTH AFRICA

Mpumalanga Economic Growth Agency (MEGA)

Address Telephone and Fax Numbers Website

33 Van Rensburg Street Tel.: +27 13 752 2440 www.mega.gov.za

Nelspruit, Mpumalanga, 1200 Fax: +27 13 753 2138

Richards Bay Industrial Development Zone (RBIDZ)

PO Box 712 Tel.: +27 35 789 3400 www.richardsbayidz.co.za

Richards Bay, 3900 Fax: +27 35 789 3414

Trade and Investment KwaZulu-Natal (TIKZN)

PO Box 4245 Tel.: +27 31 368 9600 www.tikzn.co.za

Durban, 4000 Fax: +27 31 368 5888

Trade and Investment Limpopo

PO Box 3490 Tel.: +27 15 295 5171 www.til.co.za

Polokwane, 0700 Fax: +27 15 295 5197

WESGRO (The Official Trade and Investment Promotion Agency for the Western Cape)

PO Box 1678 Tel.: +27 21 487 8651 www.wesgro.co.za

Cape Town, 8000 Fax: +27 21 487 8705

SWAZILAND

Ministry of Foreign Affairs and Trade

Address Telephone and Fax Numbers Website

PO Box 518 Tel: +268 404 2661 www.gov.sz

Mbabane, Swaziland Fax: +268 404 2669

The Federation of Swaziland Employers and Chamber of Commerce

Emafini Business Center Tel.: +268 404 0768 www.business-swaziland.com

Malagwane Hill Fax: +268 409 0051
Mbabane, Swaziland

Swaziland Investment Promotions Authority

Address Telephone and Fax Numbers Website

7th Floor, Mbandzeni House Tel.: +268 404 0470 www.sipa.org.sz

Mbabane, Swaziland Fax: +268 404 3374

442
ZAMBIA

Ministry of Commerce, Trade and Industry

Address Telephone and Fax Numbers Website

9 and 10 Floor,
th th
Tel.: +260 211 228 301 www.mcti.gov.zm
Nasser Road, PO Box 31968 Fax: +260 211 221 114
Lusaka, Zambia

Zambia Association of Chambers of Commerce and Industry

Showgrounds, Tel.: +260 211 25 2483 www.zambiz.co.zm/assoc/

Great East Road Fax: +260 211 25 3020 zacci.htm
PO Box 30844
Lusaka, Zambia

Zambia Development Agency

Privatization House Tel.: +260 211 222 858 www.zda.org.zm

Nasser Road Fax: +260 211 225 270
PO Box 30819
Lusaka, Zambia

Zambia Federation of Employers (ZFE)

Address Telephone and Fax Numbers Website

1 Floor, Electra House

st
Tel.: +260 211 22 3340 www.zfe.co.zm
Cairo Road, PO Box 31941 Fax: +266 211 22 3336
Lusaka, Zambia

ZIMBABWE

Ministry of Industry and Commerce

Address Telephone and Fax Numbers Website

13th Floor, Mukwati Building Tel.: +263 4 702 731 www.miit.gov.zw/zimba.htm

Cnr of 4th Street/Livingstone Av Fax: +263 4 729 311
Private Bag 7708, Causeway,
Harare, Zimbabwe

Zimbabwe National Chamber of Commerce

8 Hastings Close Tel.: +263 429 3244

Highlands, PO Box 1934, Fax: +263 429 3245 www.zncc.co.zw
Harare, Zimbabwe

443
ZIMBABWE

Zimbabwe Investment Authority

Investment House Tel.: +263 475 7931 www.zia.co.zw

109 Rotten Row Fax: +263 477 3843
PO Box 5950, Harare,
Zimbabwe

Employers Confederation of Zimbabwe (EMCOZ)

Address Telephone and Fax Numbers Website

PO Box 158 Tel.: +263 473 9647

-
Harare, Zimbabwe Fax: +263 473 9630

444
East Africa
BURUNDI

Ministry of Commerce, Industry and Tourism

Address Telephone and Fax Numbers Website

B.P. 492 Tel.: +257 224 935 -

Bujumbura, Burundi Fax: +257 218 205

COMOROS

Ministry of Finance, Budget, Economy and Planning

Address Telephone and Fax Numbers Website

B.P. 324 Tel.: +269 73 1159 -

Moroni, Comoros Fax: +269 74 4141

DJIBOUTI

National Agency for Investment Promotion

Address Telephone and Fax Numbers Website

B.P. 1884 Rue de Marseille Tel.: +253 31 2102 www.djiboutinvest.dj

Djibouti Fax: +253 35 8837

ERITREA

Ministry of Trade and Industry

Address Telephone and Fax Numbers Website

PO Box 921 Tel.: +291 112 0080 -

Asmara, Eritrea Fax: +291 112 0586

Eritrean National Chamber of Commerce

PO Box 856 Tel.: +291 112 1589 www.eritrea.be/old/

Asmara, Eritrea Fax: +291 112 0138 eritrea-business.htm

445
ETHIOPIA

Ministry of Trade and Industry

Address Telephone and Fax Numbers Website

PO Box 704 Tel.: +251 11 151 8025 -

Addis Ababa, Ethiopia Fax: +251 11 151 4288

Ethiopian Chamber of Commerce and Sectoral Association

Tel: +251 11 551 8240

www.ethiopianchamber.com/
Fax: +251 11 551 7699

KENYA

Ministry of Trade

Address Telephone and Fax Numbers Website

Teleposta Towers Tel.: +254 20 31 500 1-6 www.trade.go.ke

18th Floor, PO Box 30430 –
00100, Nairobi,
Kenya

Kenya National Chamber of Commerce and Industry

PO Box 80635 Tel.: +254 41 231 8802 http://paragonkenya.com/

Fax: +254 41 231 8802 KNCCIMSA/businessinkenya.
html

Kenya Investment Authority

Kenya Railways Tel.: +254 20 222 1401 www.investmentkenya.com

Headquarters Fax: +254 20 222 43 862
3rd Floor, Block D
Workshops Road
PO Box 55704-00200
City Square, Nairobi,
Kenya

446
RWANDA

Ministry of Trade and Industry

Address Telephone and Fax Numbers Website

PO Box 73 Tel.: +250 788 479 612 www.minicom.gov.rw

Kigali, Rwanda Fax: +250 078 831 2222

Rwanda Development Board

Gishushu, Nyarutarama Road Tel.: +250 252 580 804 www.rwandainvest.com

PO Box 6239, Kigali, Rwanda Fax: +250 252 585 223

SOMALIA

Ministry of Commerce and Industry

Address Telephone and Fax Numbers Website

PO Box 928 Tel.: +251 214 53 -

Mogadishu, Somalia

SUDAN

Ministry of Foreign Trade

Address Telephone and Fax Numbers Website

Trade Information Centre Tel.: +249 1177 2540 -

Gamma Street, Khartoum, Fax: +249 1177 6359
Sudan

Ministry of Investment

West Hilton Tel.: +249 717 198 www.sudaninvest.org

Khartoum, Sudan Fax: +249 787 199

TANZANIA

Ministry of Trade, Industry and Marketing

Address Telephone and Fax Numbers Website

Co-operative Union Building Tel.: +255 22 21 80075 -

Lumumba Street Fax: +255 22 21 82481
PO Box 9503
Dar es Salaam, Tanzania

447
Chamber of Commerce, Industry, and Agriculture

21 Ghana Avenue Tel.: +255 22 21 311 9436 www.tccia.com

PO Box 9713, Dar es Salaam Fax: +225 22 21 8136

Tanzania Investment Centre

Shaaban Robert Street Tel.: +255 22 211 6328 www.tic.co.tz

PO Box 938 Fax: +255 22 211 8253
Dar es Salaam, Tanzania

UGANDA

Ministry of Tourism, Trade and Industry

Address Telephone and Fax Numbers Website

Plot 6/8 Parliamentary Av. Tel.: +256 414 230 916 www.mtti.go.ug
PO Box 7103, Kampala, Fax: +256 414 347 286
Uganda

National Chamber of Commerce and Industry

Plot 1A Tel.: +256 312 266 323 www.chamberuganda.com

Kiira Road, Kampala Fax: +256 414 230 310
PO Box 3809

Uganda Investment Authority

Plot 22B Lumamba Avenue Tel.: +256 414 301 000 www.ugandainvest.com
TWED Plaza, PO Box 7418 Fax: +256 414 342 903
Kampala, Uganda

448
Central Africa
CAMEROON

Ministry of Trade and Industry

Address Telephone and Fax Numbers Website

- Tel.: +237 2 2340 -

Cameroon Chamber of Commerce and Industry

2nd Floor
SHO Plaza, Akwa Street Tel.: +237 331 339 25 www.cameroonchamber.com
Douala, PO Box 2325

CENTRAL AFRICAN REPUBLIC

Ministry of Commerce, Industry and the Promotion of Private Sector Investment

Address Telephone and Fax Numbers Website

Avenue B. Boganda Tel.: +236 610 769 -

B.P. 1988, Bangui Fax: +236 617 653
Central African Republic

CHAD

Ministry of Industry, Commerce and Crafts

Address Telephone and Fax Numbers Website

B.P. 424 Tel: +235 523 049 -

N’Djamena, Chad Fax: +235 522 733

REPUBLIC OF CONGO

Ministry of Commerce, Consumerism and Supply

Address Telephone and Fax Numbers Website

B.P. 2965 Tel.: +242 281 5056 -

Brazzaville Fax: +242 281 5829

449
DEMOCRATIC REPUBLIC OF CONGO

Ministry of National Economy and Trade

Address Telephone and Fax Numbers Website

Building BCDC Tel.: +243 81 33 30 754 -

Blvd du 30 Juin
Kinshasa

EQUATORIAL GUINEA

Ministry of the Economy, Commerce and Business Promotion

Address Telephone and Fax Numbers Website

Avenida de la Independencia Tel.: +240 09 2584 -

Malabo Fax: +240 09 3313
Equatorial Guinea

GABON

Ministry of Trade and Industrial Development

Address Telephone and Fax Numbers Website

B.P. 561 Tel.:+241 721 540 -

Libreville, Gabon Fax: +241 721 538

SÃO TOMÉ E PRÍNCIPE

Ministry of Economy

Address Telephone and Fax Numbers Website

Direccao do Comercio e Tel.: +239 122 2714 -

Industria, CP 168 Fax: +239 122 2347
São Tomé

450
West Africa
BENIN

Ministry of Industry and Trade

Address Telephone and Fax Numbers Website

- Tel.: +229 2130 3024 www.mic.bj/spip.php? rubrique59

Fax: +229 2130 3024

Benin Chamber of Commerce

01 PO Box 31 Tel.: +229 2131 4386 www.ccibenin.org

Cotonou, Benin Fax: +229 2131 3299

BURKINA FASO

Ministry of Trade

Address Telephone and Fax Numbers Website

Ouagadougou 01 Tel.: +226 2032 4786 -

B.P. 365 Fax: +226 2031 7053

CAPE VERDE

Finance Ministry

Address Telephone and Fax Numbers Website

Amilcar Cabral Tel.: +238 260 7507 www.minfin.gov.cv

Praia, Santiago Island
Cape Verde

CÔTE D’IVOIRE

Ministry of Trade

Address Telephone and Fax Numbers Website

Abidjan Boulevard de la Tel.: +225 2021 7635 www.minfin.gov.cv

Cathédrale Immeuble CCIA Fax: +225 2021 9172
26ème, BP 143 Abidjan 01

451
GAMBIA

Ministry of Trade and Industry

Address Telephone and Fax Numbers Website

Independence Drive Tel.: +220 422 8392 www.gipfsa.gm/visiting_Us/

Banjul, Gambia Fax: +220 422 7756 Government-institutions.aspx

GAMBIA

Chamber of Commerce and Industry

Address Telephone and Fax Numbers Website

55 Kairaba Avenue Tel.: +220 437 8936 www.gambiachamber.com/

K.M.C. web.nsf
PO Box 3382
Serrekunda

Investment Promotion and Free Zones Agency

48 Kairaba Avenue Tel.: +220 437 7377 www.gipfza.gm

K.M.C. Fax: +220 437 7379
Serrekunda

GHANA

Ministry of Trade, Industry and Marketing

Address Telephone and Fax Numbers Website

PO Box M47 Tel.: +223 21 663 327 www.ghanaweb.com/Ghana-

Accra Fax: +223 21 662 428 HomePage/republic/ministry.
Ghana profile.php?ID=32

Ghana National Chamber of Commerce and Industry

2nd Floor Adabla Plaza Tel.: +233 21 701 2780 www.ghanachamber.org

Oroko Street, Kokomlemle Fax: +233 21 255 202
PO Box 2325, Accra, Ghana

Ghana Investment Promotion Centre

PO Box M193 Tel.: +233 21 665 125 www.gipcghana.com

Accra Fax: +233 21 663 801
Ghana

452
GUINEA-BISSAU

Ministry of Commerce, Tourism and Tradecrafts

Address Telephone and Fax Numbers Website

Av. 3 de Agosto Tel.: +245 204 419 -

Caixa Postal 85 Fax: +245 204 851
1000 Bissau, Guinea-Bissau

GUINEA

Ministry of Commerce, Industry, Tourism and Handicrafts

Address Telephone and Fax Numbers Website

B.P. 468 Tel.: +224 41 52 22 -

Conakry, Guinea Fax: +224 41 39 90

LIBERIA

Ministry of Commerce and Industry

Address Telephone and Fax Numbers Website

PO Box 10-9014 Tel.: +231 226 283 www.moci.gov.lr

1000 Monrovia 10 Fax: +231 223 386
Liberia

National Investment Commission

Mailbag 9043 Tel.: +231 77 333 222 www.nic.gov.lr

12th Street Sinkor
Monrovia, Liberia

MALI

Ministry of Trade and Industry

Address Telephone and Fax Numbers Website

B.P. 234, Quartier du Fleuve Tel.: +223 2 22 5726 -

Koulouba, Bamako, Mali Fax: +223 2 22 8853

453
NIGER

Ministry of Commerce, Industry and Promotion of the Private Sector

Address Telephone and Fax Numbers Website

B.P. 480 Tel.: +227 735 867 -

Niamey, Niger Fax: +227 732 150

NIGERIA

Ministry of Commerce and Industry

Address Telephone and Fax Numbers Website

Block H Tel.: +234 9 234 1662 -

Old Federal Secretariat
Garki area 1, Abuja, Nigeria

Lagos Chamber of Commerce and Industry

1 Idowu Taylor Street Tel.: +234 1 774 6617 www.lagoschamber.com

Victoria Island, Lagos, Nigeria Fax: +234 1 270 1009

Nigerian Investment Promotion Commission (NIPC)

Plot 1181 Aguiyi Ironsi Street Tel.: +234 92 904 882 www.nipc.gov.ng
Maitama District
P.M.B. 381 Garki, Abuja,
Nigeria

SENEGAL

Ministry of Commerce

Address Telephone and Fax Numbers Website

Building Administratif - Tel.: +221 849 70 00 -

5 etage, Fax: +221 821 91 32
Dakar, B.P. 4029

SIERRA LEONE

Ministry of Trade and Industry

Address Telephone and Fax Numbers Website

Sixth Floor, Youyi Building Tel.: +232 22 222 755 -

Freetown, Sierra Leone

454
SIERRA LEONE

Chamber of Commerce and Industry

Address Telephone and Fax Numbers Website

5 Floor Guma Building,

th
Tel.: +232 2222 0904 -
Lamina Sankoh Street Fax: +232 2222 0696
Freetown, Sierra Leone

Sierra Leone Indigenous Business Association

Ebenezer Millennium Building Tel.: +232 076 519 119 www.sliba.com

Circular Road, P.O Box 806
Freetown, Sierra Leone

TOGO

Ministry of Commerce, Industry, Trade, Small and Medium Scale Enterprise

Address Telephone and Fax Numbers Website

1 Avenue de Sarakawa Tel.: +228 221 2971 www.republicoftogo.com

B.P. 383, Lomé, Togo Fax: +228 221 0572

455
North Africa
ALGERIA

Ministry of Commerce

Address Telephone and Fax Numbers Website

Cite Zerhouni Mokhtar, Tel.: +213 021 890074 www.mincommerce.gov.dz

El Mohamadia, Algeria Fax: +213 021 890 034

National Agency for Investment Development

27, Rue Mohamed Tel.: +213 21 77 3262 www.andi.dz/fr

Merbouche Hussein-Dey , Fax: +213 21 77 3257
B.P. 414, Algiers

EGYPT

Ministry of Trade and Industry

Address Telephone and Fax Numbers Website

2 Latin America Tel.: +202 792 1167 www.mfti.gov.eg

Garden City, Cairo, Egypt Fax: +202 795 5025

Federation of Egyptian Chambers of Commerce

4 El Falaki Square Tel.: +202 795 3677 www.fedcoc.org.eg

Cairo, Egypt Fax: +202 795 1164

General Authority for Investment

3 Salah Salem Street Tel.: +202 240 55 425 www.gafinet.org/English/

Nasr City, Cairo, 11562 Fax: +202 240 55 425 Pages/Default.aspx
Egypt

LIBYA

Libyan Investment Authority

Address Telephone and Fax Numbers Website

22nd Floor Tel.: +218 21 336 2091 www.lia.ly

Bourj Al Fatih Tower Fax: +218 21 336 2082
Borgaida Street
PO Box 1103
Tripoli, Libya

456
MAURITANIA

Ministry of Commerce, Artisan Manufacturing and Tourism

Address Telephone and Fax Numbers Website

Avenue Bourjuiba, Ksar Tel.: +222 525 3086 -

B.P. 182, Nouakchott Fax: +222 525 7671
Mauritania

Mauritania Chamber of Commerce

303 Avenue de I’ Indépendance Tel.: +222 525 2214 www.chambredecommerce.mr

B.P. 215, Nouakchott, Fax: +222 525 3895
Mauritania

Commissariat of Investment Promotion in Mauritania

Address Telephone and Fax Numbers Website

B.P. 238 Tel.: +222 525 07 55 www.investinmauritania.gov.

Nouakchott Fax: +222 525 43 56 mr/enconventions.html
Mauritania

MOROCCO

Department of Foreign Trade

Address Telephone and Fax Numbers Website

- Tel : +212 537 70 6321 www.mce.gov.ma

Fax : +212 537 70 3231

Department of Trade, Industry and New Technologies

Address Telephone and Fax Numbers Website

Avenue Mohammed V, q. Tel.: +212 537 76 1868 www.mcinet.gov.ma

Administratif, Rabat, Morocco Fax: +212 537 76 6265

Moroccan Agency for Investment Promotion

Agence Marocaine de Tel.: +212 05 37 67 34 20 www.invest.gov.ma

Développement des Fax: +212 05 37 67 34 17
Investissements
32, Rue Hounaîne Angle
Rue Michlifen, Agdal, Rabat,
Morocco

457
Federation of Moroccan Chambers of Commerce

Address Telephone and Fax Numbers Website

6 Rue Erfoud Tel.: +212 537 76 70 78 www.fcmcis.ma

Hassan, Rabat Fax: +212 537 76 78 96
PO Box 218, Morocco

TUNISIA

Ministry of Commerce

Address Telephone and Fax Numbers Website

Avenue Kheireddine Pacha Tel.: +216 128 9801 -

Tunis, Tunisia Fax: +216 179 2420

Tunis Chamber of Commerce

31 Avenue de Paris Tel.: +216 71 247 322 www.andi.dz/fr

Tunis, Tunisia Fax: +216 71 354 744

Foreign Investment Promotion Agency (FIPA)

Address Telephone and Fax Numbers Website

Rue Slaheddine El Ammami, Tel. : +216 71 703 140 www.investintunisia.tn

Centre urbain Nord 1004 Fax : +216 71 702 600
Tunis, Tunisia

Tunisian Industrial Promotion Agency

63, Rue de Syrie Tel.: +216 71 792 144 www.tunisieindustrie.nat.tn

Belvedere 1002 Fax: +216 71 782 482
Tunis, Tunisia

458
ANNEXURE III the dti
Africa Directorates

the dti houses regional directorates for the Southern, East and Central, West and North African

regions. These directorates are located within the African Economic Relations (Bilaterals) Unit of

the International Trade and Economic Development (ITED) Division. Interested parties can contact

the directorates directly for up-to-date information and assistance, related to trade and investment

issues in the individual African countries that form part of the institutional configuration within their

respective jurisdictions.

SOUTHERN AFRICA

Director: Calvin Phume

Democratic Republic of
Angola Botswana
Congo
Lesotho Madagascar Malawi

Mauritius Mozambique Namibia

Seychelles Swaziland Tanzania

Zambia Zimbabwe

Team Assistant: Ms Dimakatso Mkhumane

Tel.: +27 12 394 1154 • Fax: +27 12 394 2154 • E-mail: [email protected]

CENTRAL AND EAST AFRICA

Director: Thamsanqa Ngwenya

Burundi Cameroon Central African Republic

Djibouti Ethiopia Eritrea

Gabon Kenya Republic of Congo

Rwanda Sudan Uganda

Team Assistant: Ms Tsholofelo Makhutle

Tel.: +27 12 394 1813 • Fax: +27 12 394 2813 • E-mail: [email protected]

459
WEST AFRICA

Director: Mr Liks Ramushu

Benin Côte d’Ivoire Equatorial Guinea

Gambia Ghana Guinea

Guinea-Bissau Liberia Mali

Nigeria Sao Tomé e Príncipe Senegal

Sierra Leone Togo

Team Assistant: Ms Khanyisa Mashele

Tel.: +27 12 394 1351 • Fax: +27 12 394 2351 • E-mail: [email protected]

NORTH AFRICA

Director: Ms Portia Poulsen

Algeria Chad Egypt

Libya Mauritania Morocco

Niger Tunisia Western Sahara

Team Assistant: Ms Helen Mbambo

Tel.: +27 12 394 3113 • Fax: +27 12 394 4113 • E-mail: [email protected]

460
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464
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466
467
the dti Campus
77 Meintjies Street
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Pretoria
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the dti
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Pretoria
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the dti Customer Contact Centre

Tel: 0861843 384
International: +27 (12) 394 9500

the dti Website

www.thedti.gov.za

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