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Across the African continent, South Africa accounts for 80% of all insurance premiums. The market is heavily tilted towards life products, which make up four-fifths of the industry’s premiums, with earnings in the segment 10 times that of non-life in 2013. At year-end 2013, South Africa’s life insurance industry had $189.4bn in assets under management, with the segment’s top five firms showing signs of growth across the board that year. Penetration rates continue to rise: the number of formally insured South Africans grew from 6.2m people in 2012 to 7.8m in 2013. While the life insurance segment saw a strong performance in 2013, non-life growth was tempered by high claims. Strong investment market performance in the last two years has boosted insurers, but a stalling economy presents challenges in the near term. This chapter contains an interview with Barry Scott, CEO, South African Insurance Association.

The trillion-dollar market capitalisation of the Johannesburg Stock Exchange (JSE) makes the country’s bourse the 19th-largest exchange worldwide. South Africa has one of the highest equity capitalisation-to-GDP ratios globally, a unique phenomenon by international standards. The country’s capital markets have performed exceedingly well in recent years, in contrast to broader macroeconomic turbulence. Economic growth for 2013, for example, was 1.9%, compared to an equity market that grew by 21.4%. Despite the challenging economic outlook, the JSE is expected to continue to perform well. Equity markets should receive a boost through infrastructure improvements and market conditions like private equity exits, and private equity is set to see strong growth as institutions have not reached their full investment potential. On the bonds and financial derivatives side, the array of products is set to expand, with Islamic debt having made its debut. This chapter contains interviews with Nonkululeko Nyembezi-Heita, Chairman, Johannesburg Stock Exchange; Stephen van Coller, Chief Executive of Corporate and Investment Banking, Barclays Africa; and Elias Masilela, Former CEO, Public Investment Corporation.

With both performance and assets outstripping the continent’s other large emerging markets in Egypt, Nigeria and Morocco, South Africa’s banking sector is the biggest and most developed on the continent. The economy has been shaken by the global financial crisis: the rand has seen unusual volatility, and demand from key markets in Europe and Asia has dropped. However, the country’s banks have been well buffered, and oversight is robust, with South Africa regularly ranking at the top of global tables for the quality of its regulatory framework. Bank margins were still strong in 2013 and were boosted by higher dollar lending across the continent, as banks hedged to prepare for the increasing interest rate cycle. Bank sector assets rose 9% year-on-year and almost broke the $378.8bn level at the end of 2013, representing more than half of total financial services industry assets. South Africa’s banks have shown resilience through economic and cyclical challenges and are expected to keep widening their footprint on the continent in the next few years. This chapter contains interviews with Gill Marcus, Governor, South African Reserve Bank; and Jim Cowles, CEO for Europe, Middle East & Africa, Citigroup.

South Africa’s economy has come a long way since apartheid ended 20 years ago, with significant improvements in both productivity and capacity – and a GDP that is now 2.5 times larger – but domestic and exogenous pressures have taken their toll on GDP growth. Headline GDP grew by 1.9% in 2013, although its components fluctuated considerably in synch with labour unrest. Although strong by comparison to many members of the OECD – particularly the eurozone – GDP performance in 2013 was nonetheless the third-worst since the end of apartheid in 1994. The turbulence is expected to continue over the short term, although 2015 should show a stronger recovery. South Africa continues to benefit from a number of comparative advantages, such as a robust financial services industry, a strong private sector and well-maintained infrastructure, but with regular strikes, twin deficits and high levels of unemployment, the country’s performance since the onset of the global financial crisis has been lacklustre. This chapter contains interviews with Nhlanhla Nene, Minister of Finance; Rob Davies, Minister of Trade and Industry; and S’dumo Dlamini, President, Congress of South African Trade Unions; and a viewpoint from Clem Sunter, Scenario Planner and former Chairman of Gold and Uranium Division, Anglo American.

OBG introduces the reader to the different aspects of the legal system in Egypt, in partnership with Helmy, Hamza & Partners. This chapter includes a viewpoint from Mohamad Talaat, Co-Managing Partner, Helmy, Hamza & Partners.