2009 has been a very tough financial year. Despite optimism at the beginning of the year in South Africa about the prospects for the economy, the recession has caught up with even the most optimistic of us.

TradeInvestSA has examined many sectors of the South African economy and spoken to some leading experts, not only from South Africa but also internationally, about these sectors and their likely fortunes in the short- to medium-term.

In January we examined investment in the telecoms sector and how South Africa presented many opportunities for international investment. This was followed up in July with the launch of the undersea cable network, led by Seacom. This has no doubt opened up particularly East Africa to the prospect of widespread broadband and the huge business potential, which that provides. The telecommunications industry is just one such sector, where South Africa has extensive expertise and is well positioned to benefit from African expansion. This expertise has already been recognised by Seacom as they formed a strategic alliance with the South African company Altech.

In March we looked at engineering and construction and South Africa’s internationally recognised standing in these sectors. The 2010 developments have been a testament to this. The construction industry was however affected by the big downturn in the property sector. TradeInvestSA looked at the plight of the property industry in September and the experts we spoke to were confident about a rebound in the industry. It also became evident that they are not the only ones confident about South Africa’s future. In an interview with Hilton Hotels, their senior vice-president of development for Hilton Hotels, Africa and Europe, Patrick Fitzgibbon, pointed out they had plans to establish their first hotel in Cape Town (in addition to their hotels in Durban and Johannesburg) and then expand into South Africa more broadly. 

The business process outsourcing (BPO) sector, including call centres, has been in the spotlight with a number of new projects in the pipeline as well as a number of acquisitions of South African BPO businesses. South Africa is uniquely positioned in the call centre industry because of the many English-speakers, with accents more understandable to North American and European clients, as well as a good track record in customer relations.

One of the most important factors likely to lead to South Africa’s long-term economic prosperity is its relationships with the major emerging markets. The IBSA (India, Brazil and South Africa) forum, South Africa’s relationship with BRIC (Brazil, Russia, India and China) and south-south trade are crucial to South Africa’s growth and development. TradeInvestSA conducted a detailed analysis of these issues and spoke to some leading experts on these topics. They all agree that our partnerships with these other emerging economies are the key to South Africa’s development goals.

We also looked at two other crucial elements to South Africa’s long-term economic competitiveness in examining innovation in the country and the future of our energy supply. As we explored in the piece on innovation, it will be crucial for South Africa to carve out its own niche in providing certain high value goods and services to the rest of the world through extensive research and development and the nurturing of innovative early stage businesses. The energy supply issue is possibly even more important, with past blackouts badly affecting South Africa’s reputation and a general shortage of power a looming disaster in the future, if not dealt with soon. Eskom’s attempts to secure funding for its expansion plans will be a closely watched issue.

In March and April we examined the retail sector’s possible avoidance of the recession. In reflecting on these articles it is safe to say that they probably had an overly optimistic view of the future economic conditions in South Africa. Suffice to say, the retail sector has been another industry licking its wounds after a difficult 2009. In this edition of TradeInvestSA, we take a look at the positive signs that have emerged in the past few months, which point towards a turn around in economic fortunes in South Africa.

TradeInvestSA will continue to bring you articles of interest and interview experts from around the world about pertinent issues for South Africa and South Africans. We welcome your comments on any of our articles and also welcome suggestions for new articles. TradeInvestSA strives to be an interactive forum for trade and investment in South Africa.