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In conjunction with SizweNtsalubaGobodo, OBG explores the taxation system, examining South Africa’s investor-friendly environment. OBG talks to Kemp Munnik, head of taxation services at SizweNtsalubaGobodo, on relevant regulations for investors.

Access to free medical treatment is a constitutional right in South Africa, but though the government has devoted at least 12% of its budget to health care annually since 2010, the Department of Health (DoH) itself has characterised the system as “inequitable, with the privileged few having disproportionate access to health services”. Expenditure is split fairly evenly between the public and private sectors, but 84% of South Africans rely on state health care services, while the private facilities serve just 16% of the population. South African health care is poised for a huge overhaul. The question is whether the roll-out of the NHI programme is feasible, given the human resource, technical and financial constraints of the existing public health system. Ample resources are invested in South Africa’s education sector, which ranks among the best on the continent. The state spends approximately one-fifth of its budget annually on education and training and has nearly achieved the goal of universal primary school enrolment that has proved so elusive elsewhere in sub-Saharan Africa. Some 14% of government expenditure is invested in basic education, according to UNICEF, though quality remains an issue, and low pass rates are especially prevalent in disadvantaged schools. With 10 globally recognised higher education and research institutions in the country, the tertiary education sector is the best in sub-Saharan Africa, and ranks 33rd in the world in terms of scientific research output. Now that black South Africans have been given access to the continent's best primary and tertiary education system, the government will have to focus on improving outcomes to create a pipeline of skilled youth that meets the needs of the labour market. The challenge will be cultivating the academic and financial capital to meet this goal. This chapter contains interviews with Stephen Saad, Group Chief Executive, Aspen; and Jonathan Jansen, Vice-Chancellor and Rector, University of the Free State.

With a proliferation of multi-language broadcasters and publishers catering to a broader regional audience, South Africa is home to one of the continent’s larger media sectors. The media industry is dominated by a group of multinational conglomerates that work across multiple platforms, with the largest player reaching a market cap of $4.7bn. While print sales and advertising revenues are in decline, the segment still represents one of the most read and accessed forms of media in the country. However, increasingly and in spite of a lower level of online penetration, digital content is receiving greater focus. Television and radio, because of their broad reach, remain the most popular mediums for delivering messages, while print advertising revenues are taking a hit due to declining readership and a shift, albeit from a low base, to digital platforms. The advertising segment is competitive and has a large number of homegrown firms, and most leading international ad agencies have a presence in South Africa, representing a client mix that is largely made up of multinationals with local operations as well as South African blue chip firms that are increasingly doing business abroad.

Despite a decline in agricultural production as a percentage of GDP in the past decade, agriculture remains a key component of South Africa’s economy and one of the country’s largest employers. In 2013 the sector as a whole contributed $5.48bn to GDP, on the back of primary annual agricultural production of $17.78bn. Agricultural production by volume rose by 2.7% in 2013. This can be attributed to a 4% increase in poultry meat, and a similar rise in goat and sheep mutton, pork and beef production; a 2.3% rise in field crop production, including sorghum, soya beans, sunflower seeds, dry beans and sugar cane; and a 0.6% increase in horticultural production, including citrus and deciduous fruit. Under the National Development Plan the government aims to create almost 1m new jobs in agriculture by 2030, primarily by expanding irrigation on arable land. South African farmers and other agriculture players also face high input costs, complex and shifting land reform regulations, labour unrest, dilapidated infrastructure and increasing competition from elsewhere. However, many local players are looking forward to continued expansion. This chapter contains an interview with Chris Venter, CEO, AFGRI.

The South African tourism sector has been a major benefactor of the opening up of the economy and the country’s reintegration with the global community. Tourism’s economic contribution is taking on added importance in light of the fact that its expansion has been outperforming growth in the economy at large. The sector’s total contribution to GDP, for example, is expected to grow by 3.6% per annum by 2024. Total income for the accommodation sector rose 10.5% y-o-y in 2013, indicating hoteliers are recovering from the oversupply that resulted from preparations for the 2010 World Cup. International tourist arrivals reached 9.6m in 2013, a 7.1% increase from 2012. Industry participants, be they hotels, travel agents, or the tourist attractions themselves, will need to adapt their offering in recognition of the fact that the international visitor profile is slowly but surely changing. However, problems occasionally arise that may prevent the sector from reaching its full potential, such as a lack of coordination among stakeholders and conflicting agendas between government departments. This chapter contains an interview with Marcel von Aulock, CEO, Tsogo Sun Group.

Renamed KwaZulu-Natal (KZN) in 1994 following the merging of Natal province with KwaZulu, KZN is South Africa’s second largest provincial economy, serving as a strategically important base for manufacturing and exports. Though it occupies only 8% of the country’s land, KZN is responsible for 26.9% of its agricultural output, 21.6% of its manufacturing and 22.3% of its transport, storage and communications facilities. As home to Africa’s largest and busiest container port and bulk terminals, and sharing borders with Mozambique, Swaziland and Lesotho, the province plays a lead role in facilitating the country’s flow of trade. Developments now under way to convert greenfield sites near Durban’s King Shaka International Airport into a designated free zone and air freight hub are set to deepen the province’s integration and further unlock its potential for multi-modal logistics. This chapter contains a viewpoint with Senzo Mchunu, Premier of KwaZulu-Natal; and an interview with Zamo Gwala, CEO, Trade & Investment KwaZulu-Natal.