As South Africa marks the 10th anniversary of apartheid’s end, the government continues its policies aimed at reducing taxes, the budget deficit, inflation and unemployment, while seeking increased foreign investment.
The country’s economy is primarily based on manufacturing and financial services, and still relies on the mineral wealth which accounts for almost a third of foreign exchange earnings.

A key economic aim for the government is the diversification of the economy. Towards this goal, the country’s Integrated Manufacturing Strategy aims to:

• improve market access for South African products in key Southern African, European and American markets;
• promote beneficiation and value-adding to the country’s many natural resources, including services such as mining technology;
• encourage large companies to make greater use of small businesses through outsourcing;
• find ways to capture knowledge and to use this information to its advantage, including greater use
  of technology; and
• achieve greater integration between different sectors through combined transport systems,
  computer networks, and so forth.

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The government promotes sectors with international potential including clothing and textiles, agro-processing, metals and minerals, tourism, automotive and transport, crafts, chemical and biotechnology, and knowledge-intensive services.

Agroprocessing. South Africa’s beverage sector is particularly strong, with a wine industry that produces a harvest three times the size of Australia’s, and also the world’s second largest brewer in South African Breweries (SAB).

Engineering. While providing declining employment, the metals and engineering sector remains the largest sector of manufacturing, and includes the world’s largest aluminium smelting facility and stainless steel factory.

New networks
South Africa is pursuing bilateral free trade agreements in addition to the multilateral WTO negotiations. The European Union (EU) and South Africa signed a Free Trade Agreement in October 1999, while a two-year process towards an FTA with the United States began in June 2003. Another FTA is under negotiation with EFTA states (Iceland, Liechtenstein, Norway and Switzerland).

South Africa is also committed to the development of a free trade zone among the 14-member Southern African development community.

Australia and South Africa
Since the end of the apartheid era (1993-94), Australia’s exports to South Africa have more than doubled. In 2000, South Africa was Australia’s 20th largest export market and 22nd largest trading partner overall. The basis of Australia’s trade with South Africa is still commodities, Australia’s major exports including meat, aluminium, coal, leather and medicaments. South Africa’s main exports to Australia are passenger motor vehicles, crude petroleum, televisions, paper and paperboard, and fertilisers.

Given South Africa’s stated intention of increasing outsourcing and expanding its mining knowledge sector, Austrade identifies opportunities for Australian firms in mining software systems, geoscience equipment and services, consumable supplies and fittings, drilling programs; environmental management and rehabilitation; strata reinforcement technology; outsourced functions including contract mining; and small-scale mining.

Austrade Johannesburg
Telephone: +27 11 784 0620
Fax: +27 11 784 0446
Email: info@austrade.gov.au
Website: www.austrade.gov.au