Doing Business in South Africa: Caveats and Resources

There's money to be made in South Africa�if you can contend with the risks

Hughes in a maintenance hangar for South African Airways in Johannesburg. (Photo by Lonnie C. Major)

In less than 10 weeks, the eyes of the world will be on South Africa. The 2010 FIFA World Cup will draw hundreds of thousands of tourists and hundreds of millions of viewers around the globe to watch the world’s largest sporting event. This is highly evident in Johannesburg, where during my recent visit, I saw construction crews hurriedly working on finishing up roads, lodging and the city’s soccer stadium. The importance of the games isn’t lost on anyone there.

Spectacle aside, South Africa hopes playing host to the World Cup will allow the nation to showcase its tourist attractions – and most importantly – its business opportunities. Despite all its problems (a look at recent headlines shows heightened racial tensions as a black teenager is accused of killing a white supremacist), there’s a wealth of opportunity in this country. Check out the stats:

South Africa is only 6% of the African continent’s population yet 24% of its GDP, is 50% of its electricity and 45% of mineral production; and half its purchasing power. The largest African market has a stable political and macro economic climate and developed financial, legal, and energy sectors.

There’s no doubt that crime, corruption, fluctuating commodity prices and excessive government control are major problems that hinder business development in the country, but after speaking to African American entrepreneurs – many of whom have lived there at least a decade – who have left their friends and families in Chicago, Detroit or Atlanta to set up shop in South Africa, there is money to be made here. That is, if you can contend with the risk – just like with any emerging market.

For information on doing business in South Africa, visit the U.S. Commercial Service office at www.export.gov, the U.S. Commercial Service in South Africa (www.buyusa.gov/southafrica/en/) or the U.S. Government’s African-wide export portal, (www.export.gov/africa).  Businesses can also order the recently updated publication, A Basic Guide to Exporting, at www.export.gov/basicguide.

You can also reach out to Craig Allen, Senior Commercial Officer for the U.S. Embassy, Commercial Section (Craig.Allen@mail.doc.gov). Craig knows the ins and outs of doing business there and has helped many American businesses find their way into the South African economy.

Alan Hughes is an editorial director at Black Enterprise.

ACROSS THE WEB
  • http://rlbrose43@yahoo.com. robert ambrose

    i am starting a mbe co,centering researching an dev. procurement of goods and services.

    • http://www.diversityrestoration.com Lisa Sheppard

      Hi Robert – I’d like to invite you and others to attend the 2010 Africa Business Conference in Baltimore, MD June 22-24, 2010. This conference is specifically designed for small and minority companies in the U.S. and Africa seeking trade and commerce opportunities plus build grassroot relationships for doing business in Africa. You will attend educational workshops, panel discussions and forums to learn about doing business in Africa. For more information, please visit http://www.regonline.com/2010africabusinessconference.

  • http://rlbrose43@yahoo.com. robert ambrose

    need any data which can give some help.

  • http://www.diversityrestoration.com Lisa Sheppard

    Diversity Restoration Solutions invites small and minority businesses in the U.S. to attend the 2010 Africa Business Conference in Baltimore, Maryland June 22-24, 2010, to learn more about how to do business in Africa, find exisiting opportunities and network with other companies from the U.S. and Africa looking to build real-time trade and commerce relationships. For more information or to register, please visit http://www.regonline.com/2010africabusinessconference.

  • http://www.selahabrams.com selah abrams

    hi Lisa, do you have any contacts to share for anyone in the entertainment business in Southern Africa? (ie, incl. Zim, Namibia, etc) Is this an area that is covered in your conference? thanks! selah.abrams@gmail.com