Can the South African business experience in Africa offer a way forward?

The paper examines the challenges of doing business in Africa, noting that political instability and corruption deter investment. It highlights South Africa's position as a leading non-oil and gas investor in Africa, with firms investing an average of $1.4 billion annually since 1991. While some local businesses fear South African domination, the author argues that these investments introduce new technologies, increase consumer choice, and serve as a catalyst for broader international confidence in African markets.

• African countries require a minimum annual GDP growth of 7% to meet the 2015 Millennium Development Goals (MDGs) regarding poverty reduction, child mortality, and primary education access. During the 1990s, the continent averaged only 2.6% growth, with sub-Saharan Africa averaging 2.3% compared to 3.2% in North Africa.
• Political instability and corruption are the primary obstacles to business confidence in Africa, affecting both foreign and local investors. This environment contributed to Africa receiving less than 2% of global foreign direct investment in 2001, according to the OECD.
• South Africa is the largest source of foreign direct investment in Africa outside the oil and gas sector, with firms investing an average of $1.4 billion per year since 1991. South African exports to the continent rose from Rand 5 billion in 1991 to Rand 35 billion in 2001.
• South African companies have diversified their investments across various sectors including retail, banking, telecommunications, and power, moving away from the trend of focusing solely on extractive industries. Specific large-scale investments include Sasol's $1.1 billion in Mozambique gas fields and Eskom Enterprises' $6 billion in the Inga power project in the DRC.
• South African business ventures in Africa report high returns on equity, ranging from 30% in banking to 50-65% in other sectors. These investments are facilitated by the appropriateness of South African products for African conditions and the use of the rand as a means of payment.

APA

South African Institute of International Affairs (2008). Can the South African business experience in Africa offer a way forward? https://saiia.org.za/research/can-the-south-african-business-experience-in-africa-offer-a-way-forward/

Chicago

South African Institute of International Affairs. Can the South African business experience in Africa offer a way forward? 2008. https://saiia.org.za/research/can-the-south-african-business-experience-in-africa-offer-a-way-forward/.

Wikipedia

{{cite report |author=South African Institute of International Affairs |title=Can the South African business experience in Africa offer a way forward? |date=18 April 2008 |url=https://saiia.org.za/research/can-the-south-african-business-experience-in-africa-offer-a-way-forward/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{southafricaninstituteofinternationalaffairs2008can, author = {{South African Institute of International Affairs}}, title = {{Can the South African business experience in Africa offer a way forward?}}, institution = {South African Institute of International Affairs}, year = {2008}, month = apr, url = {https://saiia.org.za/research/can-the-south-african-business-experience-in-africa-offer-a-way-forward/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }