Purchase OBG Publications

South Africa is home to one of Africa’s most dynamic media markets. The end of apartheid created a new era of freedom in which independent voices have blossomed. A population of over 50m and economic growth provide sound fundamentals. Technological changes can be challenging for traditional outlets, but also provide opportunities for those willing to innovate. Having weathered the international economic storm well, the South African advertising industry had a tough year in 2012 and may have a slower period ahead. Having been carried through the worst of the international recession with the help of the World Cup, South Africa’s advertising industry now finds itself in a more difficult period, in which competition is high. Nonetheless, the growing economy should continue to feed into higher spending over the longer term. This chapter contains an interview with Collins Khumalo, Chief Executive Officer, MultiChoice South Africa.

Despite some challenging circumstances, the South African agricultural sector continues to perform robustly. In the first quarter of 2013, the agriculture, forestry and fisheries sector comprised 2.2% of real GDP. The country’s major farming segments in recent years have included cattle, dairy, poultry, sugar and maize. In terms of turnover, as many as 10 of the top 20 agribusinesses in South Africa are domestic firms. With demand somewhat stymied and rising costs of operation for a number of farmers and agro-processing businesses, the sector faces some pressing challenges, including uncertainty over land tenure, labour unrest and the current economic environment. While these have created some difficulties, they have not cast a shadow over the future of the industry and investors have many reasons to look favourably on South African agriculture. This chapter contains an interview with Su Birch, CEO, Wines of South Africa.

As South Africa’s visitor numbers pick up, revenues are returning to a tourism industry that suffered a post-World Cup dip compounded by the effects of a tough global environment. Some 4.4m tourists visited South Africa in the first six months of 2012. The government is working to increase the tourism sector contribution to the economy, from a 2009 baseline figure of R189.4bn ($23bn), or 7.9% of GDP, to R499bn ($60.8bn) by 2020. Tourism business performance, particularly in the higher-value segment of the market, remains somewhat muted – however, as traditional target markets continue to be slow, the visitor mix is beginning to shift subtly. As such, businesses will have to develop new strategies to cater to the changing visitor dynamics in the market. This chapter contains interviews with Thulani Nzima, CEO, South African Tourism; and Arthur Gillis, CEO, Protea Hospitality Group.

South Africa has a sizeable “digital divide”, with urban areas benefitting from a range of modern technologies while rural areas tend to be less connected. However, with a renewed draft broadband policy, South Africa now has a framework for developing the ICT infrastructure that will help its economy modernise and thrive. In the sphere of backhaul infrastructure, the private sector has a strong presence and is increasingly extending high-quality services to areas of high demand. Competitive as it is, South Africa’s telecoms sector continues to see growth and attract the attention of foreign investors. Average revenue per user has stabilised recently, and operators are pushing for greater take-up of data services to bolster margins. Options for potential new entrants to the market include launching a mobile virtual network operator or acquiring a smaller player already in operation. Building up a new network is considered unlikely due to the cost, although infrastructure sharing could bring this down. This chapter contains an interview with Andile Ngcaba, Chairman, Dimension Data; and a roundtable with Alan Knott-Craig, CEO, Cell C; Karel Pienaar, Group Chief Strategy Officer, MTN SA; and Shameel Joosub, CEO, Vodacom.

Despite having the smallest land area of South Africa’s nine provinces at 16,548 sq km, Gauteng is the largest contributor to the national economy contributing around $85.33bn and growing at a rate of 3%. The tertiary sector is the main driver of the local economy and makes up 71% of Gauteng’s GDP, led by finance, real estate, and business and government services. While Gauteng accounts for most of South Africa’s economic output, with opportunity comes the challenge of population migration and urbanisation, placing a strain on the provision of public services and employment. This chapter contains interviews with Nomvula Paula Mokonyane, Gauteng Premier; and Siphiwe Ngwenya, Group CEO, Gauteng Growth and Development Agency (GGDA).

South Africa’s construction industry has felt the impact of the post-World Cup slowdown more than any other sector of the economy. However, ongoing urbanisation trends suggest the sector may pick up in the near future, especially with regards to the social housing segment. South African construction companies have also experienced significant success in their efforts to expand into neighbouring countries. Compared to international markets, local real estate has performed relatively well. Returns, both in terms of capital and income, have on the whole stalled and flattened rather than slipped fully into negative growth. Certain elements of the sector, depending on location and class, continue to present attractive opportunities, especially commercial office property. While there is little sign of a rapid turnaround, there are some positive longer-term indicators, including potential income growth. This chapter contains interviews with Roger Jardine, CEO, Aveng Group; and Marc Wainer, CEO, Redefine Properties