Sunday, 25 September 2022


South Africa: The Global Capital of Africa

South Africa is the global capital of Africa, its economy, its beautiful cities and tourism, its industry, and the diverse ethnic groups present, all working cohesively and known as the Rainbow Nation.


For the enterprising, South Africa is the only country in the entire world where you can start a business and tap into all global markets, no matter the size of business, as long as you have the correct mindset, strategy, relationships, and sheer will to expand. Expansionism is something any business can turn into reality just by operating on a pretext of being in a globalised economy by default. 


Those naturalised often are unaware that South Africa is not a local country, but it is a global country. "When you are in South Africa, know that you are global, and not just local", remarked Fitzgerald Mujuru, the founder of Fitzgerald Mujuru Group Pty Ltd, a Marketing consulting firm operating in Sandton, Johannesburg. To limit oneself in South Africa, is to behave local, when all things global are easily at their disposal. 


Unemployment in South Africa could also be growing because of inability of the local South African tapping into the change occurring because the economy is no longer a local but a global one, needing global skills of working in an international atmosphere. There is no Xenophobia in South Africa, but the expression of bodies owned by minds that cannot see that the economy is a sea and not a fishpond. 


It is possible for a local South African, without education, or knowledge of anything, to partner with a foreigner, get an export license, and start exporting into Africa, if they have a good attitude. This is one of the many examples. South Africa has all the necessary conditions to either keep the unemployed unemployed and to also create employment for the unemployed and is all depended on perspective and attitude. This will remain for decades to come.


What makes South Africa a Global Capital of Africa can be found in an investment promotion article written by Thandi Tobias, the Chairperson of Brand South Africa, published recently. 


Thandi Tobias addressed the key about investment concerns - large or fast-growing domestic market to sell goods and services to, a springboard from which to export to international markets, and a comparative advantage that can be exploited. 


South Africa is the largest, diversified economy in Africa, accounting for 16% of the continent’s gross domestic product (GDP). It is also home to the Johannesburg Stock Exchange (JSE), the largest stock market in the continent and one of the world’s top twenty exchanges with a market capitalisation of $1.3 trillion. Our country’s economy has rebounded strongly from the negative impact of the covid-19 pandemic and is projected to grow 4.9% in 2021, reversing a 6.4% slump in 2020. To top it all, the country has a population of over sixty million people and a growing middle class.


South Africa has over an extended period established itself as a location for multi-nationals seeking to spread their tentacles across Africa, taking advantage of our country’s skilled workforce and world-class financial and logistics infrastructure. In addition, the JSE enables companies to raise capital to grow their local and African footprints while investors get exposure to these companies.


South Africa has access to global markets, thanks to its strategic trade agreements that give companies preferential access to the European Union (EU) through the EU-SADC Free Trade Agreement and the US market through the Africa Growth and Opportunity Act (AGOA). South Africa is gearing up to benefit from the recently launched African Continental Free Trade Area (AfCFTA), which gives companies access to a market of more than one billion people and GDP of $2.2 trillion. These trade agreements have made our country to be one of the most open economies in the world, with imports and exports accounting for more than 58% of GDP.


South Africa’s comparative advantage, our country is renowned for its abundance of natural resources and has deposits of gold, diamonds, platinum, manganese, copper, coal, uranium, iron ore, silver, titanium, and moderate reserves of natural gas. When it comes to agriculture, we produce a variety of crops ranging from maize, wheat, sugarcane, sunflower, to groundnuts, potatoes, citrus, and grapes. Understood that South Africa is an attractive investment destination that has a potential to give investors sustainable, long-term returns.


In addition to this, South Africa has an atmosphere of pleasure and leisure, which allows the creation of consumption unparalleled in Africa. South Africa has over 2,000 shopping malls and Centres, and fast-growing. Each of these malls has a daily traffic of 10,000 to 15,000 shoppers making Retail one of the most lucrative sectors in Africa, if not the world. 


Tapping into the globalisation of South Africa requires wit and an international mindset. This is the main reason there are more South African retail giants that have expanded into the African continent than there are in any country in Africa or the World. 


One if the most interesting Retail expansion stories of a global brand going local in South Africa than continental is that of Walmart International and Massmart. Massmart Holdings Limited is a South African firm that owns local brands such as Game, Makro, Builder's Warehouse and CBW. It is the second-largest distributor of consumer goods in Africa, the largest retailer of general merchandise, liquor and home improvement equipment and wholesaler of basic foods.


In November 2010, Walmart, the American super chain conglomerate made a bid to acquire majority shareholding (51%), in Massmart. At that time, the offer was valued at R:17 billion (approximately US$2.54 billion or £1.54 billion). 


As of 31 January 2022, Massmart operated 414 stores in South Africa and twelve other Sub-Saharan countries. Effectively this means that Walmart the America global giant of retail has a footprint that includes Africa, at the same time, brands like Game, Makro, and Builder's Warehouse are found in more African countries. 


Like Massmart, tapping into South Africa's default globalisation requires leveraging on relationships in Banking, Investment, Supply Chains, and Market Development. All these are possible in South Africa more than they are in any other country on the continent. These issues are scalable to suit any situation - small business or large business owners. 


As the most advanced economy in Africa, South Africa possesses natural cost effectiveness and economic credibility that is bestowed on any formal business, and small business owners can leverage such to grow locally, and internationally too. 


Few small construction companies in South Africa think of partnering with neighbouring countries' small construction companies, to form a multinational conglomerate that pitches for national tenders and execute them using South African resources and supply chains for cost effectiveness and economic credibility that is available by default. 


There are so many small-scale construction projects available in all African countries, that local small firms are not getting because they do not have the credibility to execute. On the other hand, one of the fastest growing BEEE sectors of the economy in South Africa is Construction, and more projects are being sub-contracted to smaller Black-owned business to achieve Black empowerment and remain compliant. This is industry equity being accumulated by South African construction businesses, which can be invested in other countries. 


Art-M Trading and Projects Pty Ltd is one such South African small construction company taking advantage of such industry equity by expanding into Botswana, partnering with a local Batswana small construction company to grow their business. Art-M Botswana is becoming a reality because the company's core business was started and is operating in the most advanced economy of Africa with construction industry standards that are global, hence finished projects carry more weight when seeing projects in other African countries.


Another success story of leveraging on the globalisation of South Africa is Accountica, the fast-growing South African Accounting Firm for small businesses, who now "have an African wide footprint". Accountica are a firm that offers accounting, taxation, payroll, and company secretarial services for businesses in South Africa, Botswana, Namibia, Zambia, and Zimbabwe. Accountica offers Bookkeeping & Accounting, Monthly Reporting, Annual Financial Statements, Payroll – Payslips, EMP201 & 501 Submissions, VAT Returns, Income Tax Returns, CIPC Returns, Department of Labour Returns, CSD Setup & Updates, Tax Clearance Renewals, Budgeting, Cashflow Projections, Ratio Analysis, Benchmarking, Valuations, and business consulting. Imagine if you will, that is growing into becoming a Deloitte, KPMG, or PwC for small businesses in Southern Africa.


In the creative and advertising industries, there are many internationally recognised Advertising Agencies that have come out of South Africa, to invest in other agencies in the continent. The fast-growing space of digital has allowed for an even more rapid growth of these agencies, as many African agencies in other countries are affiliating themselves with the South African advertising industry. According to Statistica, the entire advertising market in South Africa in 2019 is estimated to be worth R30.4 billion South African rand (approximately 2.05 billion U.S. dollars), and TV and video advertising spending is projected to account for the largest share of that amount, around 21 percent. This is a fast growing and lucrative market that smaller agencies are tapping into, despite industry challenges of access to larger advertising accounts from big businesses.


Kupa Creative Group Pty Ltd, the advertising investments group, like Accountica, Art-M Projects, and many smaller South African businesses, has since 2019 been expanding into more African markets. Through leveraging on the globalised nature of the South African economy, Kupa Creative Group has advertising agency accounts in South Africa, East African Community, Egypt, Ethiopia, Botswana, Nigeria, Zambia, and Zimbabwe.


Kuronga, a farming digital markets App, founded in UK and South Africa, is an App that connects buyers and sellers allowing them to arrange and agree to a sale. Farmers can find Buyers nearest to them. Buyers, no need to wait for sellers to come to you, search our online marketplace for produce available in your area. This business was started in South Africa, and is fast growing into other African markets, for small scale farmers and their markets.


South Africa is the vantage point of business and market development for any Africa desiring to grow their small business not only in their country but in other countries as well. 


Source: Accountica, Kuronga, Biz Community, Brand South Africa, Bloomberg, Statistica, Kupa, Art-M Projects