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The South African economy is still in transition. A century ago South Africa’s economy was agriculture-based, fifty years later, mining was the anchor of the economy. Today, financial services is the largest single sectorm followed closely by manufacturing. According to the latest estimates, the tertiary sector accounts for about 65" of GDP.

The South African economy is small in comparison to countries such as Germany and Japan. It accounts for about 0,5% of global GDP, about the same proportion as its population. But in regional terms South Africa is an economic powerhouse. SA has a GDP bigger than Nigeria, Egypt and Kenya combined and dominates the continent in terms of its infrastructure, financial resources and sophistication. The Gauteng province is the country’s most important industrial, commercial and financial centre accounting for 37% of GDP.

South Africa is one of the richest countries in the world in minerals and still the global leader in gold production. Mining, therefore, remains important to the economy and the largest earner of foreign exchange. South Africa has a modern financial and industrial sector which is supported by an excellent infrastructure of telecommunications, road, railroad, air and electric power grids.

MONETARY AND FISCAL POLICY

South Africa’s monetary policy objectives are to reduce inflation, contain growth of the money supply, reduce interest rates, while maintaining positive real interest rates and to maintain a stable currency.
The independence of the South African Reserve Bank, which plays a major role in the implementation of monetary policy, is entrenched in the constitution.
The Government and the Reserve Bank are committed to the continuation of sound monetary policy and has stuck to its policy of fiscal discipline through some very tough times. Economic growth was anaemic during the past years and pressure for more spending and artificial stimulation of the economy was substantial. Spending, however, was contained, tax collection improved and the budget deficit continued to fall, despite sluggish GDP growth.
The Government’s commitment to fiscal discipline and transparency combined with a sound monetary policy have helped lower inflation, increase investor confidence and lower interest rates. In sum, as it enters the new millennium, South Africa is well positioned for renewed and sustainable economic growth.

FOREIGN TRADE

Since the end of Apartheid, South Africa has become fully integrated into the world economy. The country is a party to the General Agreement on Trade and Tariffs (GATT) and an active member of World Trade Organisation (WTO).
After four years of tough negotiationsm South Africa and the European Union signed the long awaited trade, development and co-operation agreement in late 1999. The agreement removes barriers on 90% of all trade between the two sides.-95% of SA goods, including those in the sensitive agricultural sector, and 86% of EU imports-over the next dozen years.
South Africa is committed to the development of a free trade zone among the fourteen member Southern Africa Development Community (SADC), with which if ran a trade surplus of over R13 billion in 1998. South Africa is a member of the Southern Africa Customs Union (Botswana, Lesotho, Namibia and Swaziland), the Common Monetary Area (Lesotho and Swaziland) and the African Development Bank.

Exports : Gold, minerals, diamonds, metals and metal products, food.
Imports : machines, transport equipment, manufactured products, chimical products, oil

DOING BUSINESS WITH SOUTH AFRICA

Without question, South Africa is one of the least expensive countries in which to do business, especially among those with a modern infrastructure and high living standards. The exchange rates makes commercial and residential property, quality hotels and restaurants downright cheap by world standards.
Some good reasons for doing business in South Africa :

EXCHANGES BETWEEN TUNISIA AND SOUTH AFRICA

NOV 2001

• TD 1 = R 6.75 ;
• 11 first months of 2001 ;
• South African imports : TD 9,434,164 ;
• South African exports : TD 6,141,782 ;

Major Tunisian products exported to South Africa

• Aluminum fluorides ;
• Food products (dates, couscous, pastries, olive oil) ;
• Nappies ;
• Carpets ;
• Clothing ;
• Anchors, electrical conductors, respiratory apparatus.

Major products imported from South Africa

Paper, laminated steel/iron, acrylic fibres, vaccines, ethylic alcohol, cotton wool, pumps, sparee parts for vehicles, tanning products.