South Africa’s growth sectors
As the country transitions away from natural resources and opens up its energy market, there are excellent opportunities for businesses in renewables and power supply, Alex adds.
“Eskom, the public utility, has until very recently had a monopoly on power generation and distribution,” he explains. “The government has now passed legislation that will mean more energy is delivered from renewable sources. The aim is to move away from dependency on coal-fired power plants to increase the contribution of wind and solar power.”
While historically South Africa’s economy has been based to a large degree around the extraction of its mineral deposits, falling prices and increasing difficulties in the viability of mining have reduced the importance of the sector in recent years.
Elsewhere, South Africa’s financial sector is well developed, Alex points out. “Banking is one of our major strengths, and our regulatory regime is known to be one of the strongest in the world,” he says. “This gives foreign investors considerable peace of mind.”
The flipside of this high level of regulation means that it can be especially challenging for new businesses to access capital, with security requirements on loans being particularly stringent. But South Africa also boasts a strong venture capital market, with funds flowing into areas such as FMCG (fast-moving consumer goods), manufacturing and renewables in recent years.