South Africa is in the midst of one of the longest expansions in its history – since 1994, and particularly since 2004, the South African economy has experienced an unprecedented period of sustained growth and stability. Our economy averaged 3 percent growth during our first decade of democracy. Since 2004 it has tended to exceed 4 percent per year, and is currently at around 5 percent. While robust commodity prices have provided a boost, our economy’s performance owes most of its vigour to effective economic management and a determination to make our country an attractive place to do business.

South Africa’s transformation paved the way for the international reintegration of our economy, creating an environment for sustained export growth, healthy net capital inflows and improved investor confidence. Importantly, it provided a mandate for our leaders to develop stable economic policies that ensure the sustained creation of wealth to meet the ambitious social goals of our nation.

Our strong economic performance in recent years has led to the expansion of a new middle class enjoying growing disposable incomes, and increased revenues due a growing tax base. The net result is that we can ramp up expenditures of health, security and social welfare to improve the lives of our people; and on education and infrastructure to further expand the productive capacity of the economy – while still retaining fiscal discipline.

An essential part of building a prosperous economy is the attraction of foreign direct investment and ensuring an environment within which investment decisions can be taken confidently, investors are rewarded for taking business risks and discovering new productive opportunities, and the regulatory context encourages business development.

The South African government’s macroeconomic reform strategy implemented over the past decade has created a framework for our sustainable economic growth and development. At the core of this strategy lies the enhancement of diversified export performance, increased private sector investment, infrastructure development, skills enhancement and improved service delivery.

Subsequent microeconomic reforms are being implemented to promote value-added industrial growth and to enable our economy to become more competitive and export orientated. This has seen us developing appropriate incentives and support programmes to assist firms and industry sectors in their drive for modernisation and competitiveness.

Importantly, this has also necessitated an increased focus on skills development so that our people are able to meet the demands of industry as they engage with a highly competitive global economy.

The Accelerated and Shared Growth Initiative of South Africa (ASGI-SA), introduced in 2005, aims at driving a growing and shared economy and elaborates on specific interventions required in order to halve unemployment and poverty by 2014. Central to its success are a series of decisive interventions aimed at facilitating the necessary structural changes to grow South Africa’s economy through stimulating competitiveness, creating employment and promoting equity. These interventions amount not to a shift in economic policy so much as a set of initiatives designed to achieve our objectives more effectively, and include:

Of particular significance in laying the foundation for increased socio-economic activity, investment and job creation is South Africa’s huge public investment programme in infrastructure development – €40bn over the next three years. This includes projects in electrification, water, rail, ports, airports and petroleum pipeline, which will significantly reduce the costs of production and delivery, thereby increasing the country’s competitiveness. In addition to creating a platform for private sector investment, this programme itself opens up numerous opportunities for investment and collaboration with international partners. The trend of global business is taking on a new dimension that coincides with our efforts to accelerate and deepen regional integration and development within Southern Africa and to promote continent-wide economic growth. Importantly, the government’s infrastructure development programme is integrally linked to the New Partnership for Africa’s Development (NEPAD) due to the imperative for infrastructure on the continent to expand at a commensurate level to attract investment and reach its full growth potential.

South Africa offers a range of comparative economic advantages in high growth sectors with immediate potential for investment and joint ventures. As identified in the government’s programme of action, ASGI-SA, immediate priority sectors in which practical implementation is currently on the agenda include business process outsourcing and tourism. Biotechnology and, in particular, biofuels represents a sector that lends itself to a multiplicity of outcomes. Other key sectors of opportunity include agriculture and agro-processing; chemicals; creative industries, furniture and mass market white goods; downstream minerals beneficiation; and textiles and clothing. Other cutting-edge technologies includes the aerospace industry; fuel-cell technology and the hydrogen economy; and broadband ICT Infrastructure.

South Africa has a robust and diverse manufacturing sector, enabling companies to source inputs at very competitive prices. Manufacturing accounts for approximately 20 percent of the country’s GDP and as much as 50 percent of exports. The growth in domestic demand as a result of our strong economic performance has led to an expanding domestic market for goods and services. In addition, South Africa’s growing international presence has resulted in a number of trade agreements with other countries and regions, facilitating favourable market access for South Africa’s growing exports.

Other notable features of South Africa’s business environment include our worldclass, progressive legal framework. Legislation pertaining to commerce, labour and maritime issues is particularly well developed, while laws relating to competition policy, copyright, patents, trademarks and disputes conform to international norms and conventions. Sanctity of contract is protected under common law and independent courts ensure respect for commercial rights and obligations. The independence of the judiciary is guaranteed by the Constitution.

Furthermore, South Africa’s financial systems are robust and well-regulated. There are more than 80 foreign banks in South Africa operating in the corporate and investment markets. Four of South Africa’s banks are rated amongst the world’s top 500 financial institutions. In addition, the country boasts the world’s 17th largest stock exchange, the Johannesburg Securities Exchange (JSE). South Africa also has a futures exchange (SAFEX) and a bond exchange (BESA).

South Africa currently ranks 23rd globally in telecommunications development. The country boasts the largest and most developed telecommunications network in Africa, including the latest in fixed-line, wireless, satellite and cellular technology. South Africa is the fourth fastest growing GSM market in the world, the 20th largest consumer of IT products and services and the 18th largest in terms of internet usage.

South Africa has among the lowest electricity prices in the world and is known for its superior supply quality with regard to this utility. The government is investing in expanding the electricity capacity, as mentioned earlier. It is evident that the government’s close interaction with the business community and industry sector bodies aims to ensure the evolution of policies sensitive to private sector needs. In fact, the World Bank has ranked South Africa 28th out of 155 countries in a recent Ease of Doing Business Index, with a ranking of eighth for protecting investors.

Furthermore, we stand at the threshold of a major boost in foreign direct investment into the region as the country prepares for the 2010 Soccer World Cup. The honour to host one of the biggest events in the world sports calendar translates into significant growth opportunities for investors, both domestic and foreign. As an open economy, we welcome new investment and collaborative partnerships in key areas of opportunity – all uniquely poised to deliver real competitive advantage. To this end, we look forward to facilitating mutually rewarding business relationships as we strive to enhance growth and enable our economy to meet its full potential. I would like to invite to you to become part of a country alive with possibilities!