Part I: Information about South Africa

Research and provide the following information about your chosen country in bulleted form. Include the country you selected in the heading. For each piece of information, cite the sources used as well as the complete direct URL where the information was found. A complete bibliography of the sources must be included at the end of your paper.

1. What was the total value of U.S. imports from this country in the most recent year available? Of U.S. exports to this country?

The total value of U.S. imports from South Africa in the most recent year is $10.5 billion (Office of the United States Trade Representative par. 4)

The total value of U.S. exports to South Africa in the most recent year is $8.4 billion (Office of the United States Trade Representative par. 4)

Information citation with URL: https://ustr.gov/countries-regions/africa/southern-africa/south-africa

1. Top 3 imports for this country
   3. Precious metal and stone (platinum) ($3.8 billion) (Central Intelligence Agency [CIA] par. 4)
   4. Iron and steel ($752 million
   5. Vehicles ($553 million)

Information citation with URL: https://ustr.gov/countries-regions/africa/southern-africa/south-africa

1. Top 3 exports for this country
   1. Machinery ($1.2 billion)
   2. Vehicles ($692 million)
   3. Mineral fuels ($459 million) (CIA n.pag)

Information citation with URL: https://ustr.gov/countries-regions/africa/southern-africa/south-africa

1. Corporate tax rate

Corporate rate tax in South Africa is 28% (Mandy par. 2).

Information citation with URL: https://taxsummaries.pwc.com/ID/South-Africa-Corporate-Taxes-on-corporate-income

1. GDP

GDP purchasing power parity – $767.2 billion (2017 est.)

GDP official exchange rate – $349.3 billion (2017 est.)

GDP real growth rate – 1.3% (2017 est.)

Information citation with URL: https://www.cia.gov/library/publications/the-world-factbook/geos/sf.html

1. Per capita income?

GDP per capita (PPP) $13,600 (2017 est.) (Central Intelligence Agency [CIA] par. 4)

Information citation with URL: https://www.cia.gov/library/publications/the-world-factbook/geos/sf.html

1. Low context or high context

As part of Africa, South Africa has high-context cultures. (Southern University par. 3).

Information citation with URL: https://online.seu.edu/articles/high-and-low-context-cultures/

1. Average years of schooling of adults (male and female)

Total Average years of schooling of adults: 14 years

Average years of schooling of male adults male: 13 years

Average years of schooling of male adults male: 14 years (2016) (CIA n.pag)

Information citation with URL: https://www.cia.gov/library/publications/the-world-factbook/geos/sf.html

1. The % of population below poverty line

The % of population below poverty line is 16.6% (2016 est.)  (CIA n.pag)

Information citation with URL: https://www.cia.gov/library/publications/the-world-factbook/geos/sf.html

1. Rate of population growth

Rate of population growth in South Africa is 0.97% (2020 est.)  (CIA n.pag)

Information citation with URL: https://www.cia.gov/library/publications/the-world-factbook/geos/sf.html

1. Life expectancy (male and female)

Total population Life expectancy is 64.8 years

Male Life expectancy: 63.4 years

Female Life expectancy: 66.2 years (2020 est.) (CIA n.pag)

Information citation with URL: https://www.cia.gov/library/publications/the-world-factbook/geos/sf.html

1. Retirement Age (required or not and age when required or average age of retirement—specify which it is in the paper.

The retirement age is  of 65 (Staff Writer par.12)

Information citation with URL: https://businesstech.co.za/news/finance/258955/new-case-deals-with-whether-your-employer-can-change-your-retirement-age/

1. Individual tax rate

Individual tax rate starts from 18% on the first bracket ($1-$12,099.49 or Rand 205,900) of taxable income to 45% of the last bracket (at least $92688.36. = Rand 1577301) (South African Revenue Service [SARS] n.pag).

Information citation with URL: https://www.sars.gov.za/Tax-Rates/Income-Tax/Pages/Rates%20of%20Tax%20for%20Individuals.aspx

1. Current inflation rate

Current inflation rate is 5.3% (2017 est.) – inflation rate (consumer prices) (CIA n.pag)

Information citation with URL: https://www.cia.gov/library/publications/the-world-factbook/geos/sf.html

1. World Bank rank on the ease of doing business

World Bank rank on the ease of doing business or index is 87.

Information citation with URL: https://data.worldbank.org/indicator/IC.BUS.EASE.XQ

1. Most recent unemployment level

The recent official unemployment level is 27.5% (2017 est.)

Information citation with URL: https://www.cia.gov/library/publications/the-world-factbook/geos/sf.html

1. Cell phone usage per 1000 people

Subscriptions per 1000 inhabitants: 1670 (2018 est.)

Information citation with URL: https://www.cia.gov/library/publications/the-world-factbook/geos/sf.html

1. Internet usage per 1000 people

The percent of population: 540 people in 1000 people or 54% (July 2016 est.)

Information citation with URL: https://www.cia.gov/library/publications/the-world-factbook/geos/sf.html

1. Average # of vacation days per year

15 working days (My Wage n.pag)

Information citation with URL: https://mywage.co.za/decent-work/leave-and-holiday/annual-leave-1

1. Average # of leave (leave, sick, maternity, paternity) days per year

21 consecutive days (My Wage n.pag)

Information citation with URL: https://mywage.co.za/decent-work/leave-and-holiday/annual-leave-1

1. Your country’s Hofstede uncertainty score and the U. S. uncertainty score

South Africa’s Hofstede uncertainty score = 49 (Hofstede Insights “South Africa” n.pag)

United States’ Hofstede uncertainty score = 46 (Hofstede Insights “United States” n.pag).

Information citation with URL: https://www.hofstede-insights.com/country-comparison/south-africa,the-usa/

https://www.hofstede-insights.com/country-comparison/the-usa/

1. Your country’s Hofstede power distance score and the U. S. power distance score

South Africa’s Hofstede power distance score = 49 (Hofstede Insights “South Africa” n.pag)

United States’ Hofstede power distance score = 40 (Hofstede Insights “United States” n.pag).

Information citation with URL: https://www.hofstede-insights.com/country-comparison/south-africa,the-usa/

https://www.hofstede-insights.com/country-comparison/the-usa/

1. Your country’s Hofstede individualism score and the U. S. individualism score

South Africa’s Hofstede power individualism = 63 (Hofstede Insights “South Africa” n.pag)

United States’ Hofstede power individualism = 62 (Hofstede Insights “United States” n.pag).

Information citation with URL: https://www.hofstede-insights.com/country-comparison/south-africa,the-usa/

https://www.hofstede-insights.com/country-comparison/the-usa/

1. Your country’s Hofstede M/F score and the U. S. M/F score

South Africa’s Hofstede M/F score = 63 (Hofstede Insights “South Africa” n.pag)

United States’ Hofstede M/F score = 62 (Hofstede Insights “United States” n.pag).

Information citation with URL: https://www.hofstede-insights.com/country-comparison/south-africa,the-usa/

https://www.hofstede-insights.com/country-comparison/the-usa/

1. Your country’s Hofstede LT/ST score and the U. S. L.T./STscore

South Africa’s Hofstede LT/ST score  = 34 (Hofstede Insights “South Africa” n.pag)

United States’ LT/ST score = 26 (Hofstede Insights “United States” n.pag).

Information citation with URL: https://www.hofstede-insights.com/country-comparison/south-africa,the-usa/

https://www.hofstede-insights.com/country-comparison/the-usa/

Part II: Evaluation of Current Status of South Africa

Answer the following questions about your chosen country in narrative form. For each of the questions, you must write a minimum of a two-paragraph analysis.

1. What is the current status of your chosen country in the world marketplace?  Support your answer with research.

Currently, South Africa is considered as an emerging economy together with Russia, Brazil, China, and India. According to CIA’s World Factbook, the current status of South Africa in the world marketplace may be described as “a middle-income emerging market with an abundant supply of natural resources; well-developed financial, legal, communications, energy, and transport sectors; and a stock exchange that is Africa’s largest and among the top 20 in the world” (n.pag). Notably, South Africa has struggled to maintain its economic growth in the market. For instance, economic growth declined by 0.7% in 2017. The levels of inequality, unemployment, and poverty continue to remain a significant challenge for South Africa’s status in the international market. CIA points out that South Africa has official unemployment of 27% of the workforce (CIA n.pag). In particular, this unemployment level is even higher in black South Africans. Remarkably, South Africa has modern infrastructures that are meant to promote the efficient distribution of commodities within the country. However, issues such as unreliable electricity suppliers disrupt production and delay delivery, and hence, retard economic growth. The unreliability of power supplies from firms such as Eskimo relations to corruption and mismanage of resources invested by the state.

Primarily, the economic policy of South Africa has targeted inflation (to control it), while promoting a vast economic base. As a country, “South Africa faces structural constraints that also limit economic growth, such as skills shortages, declining global competitiveness, and frequent work stoppages due to strike action”  (CIA n.pag). Currently, the government of South Africa is fighting increasing pressure from urban areas who want their constituencies to have enhanced provision of essential services to impoverished neighborhoods, boost job creation and growth, and reduce college fees to desired levels. The infighting of the South Africa ruling party, as well as the volatility of the country’s current (rand), is further risking economic growth(CIA n.pag). From this perspective, therefore, the current status of South Africa in the world marketplace seems good at face value; however, a critical analysis of the status based on production and consumption of local commodities, the condition of South Africa is not promising.

1. What is the ease of doing business in your chosen country? Support your answer with research.

In 2020, the World Bank under Doing Business Project ranks South Africa number 84 among 190 economies. Remarkably, the rank of the country has remained constant from 2019 (84), which was a 2-point deterioration from 2018 (82) (Trade Economics par. 1). Currently, South Africa has a doing business score of 67.0 (The World Bank 4). Notably, doing a business score of 67.0 in 2020 implies that the South African economy 33.0 percentage points short of having the best regulatory performance build across diverse economies over time. The rank of doing business is based on different parameters that include starting a business, dealing with construction permits, getting electricity, registering property, getting credit, protecting minority investors, paying taxes, and trading across borders, enforcing contracts, and solving insolvency. Notably, South Africa scores high in starting a business with a score of 81.2% (The World Bank 4). In particular, this score means that South Africa is an 18.8 percentage point of having an easy procedure to start a business. In particular, it takes 40 days and seven procedures to start a business in South Africa. In protecting minority investors, South Africa has a score of 80.0% (The World Bank 4). Mainly, this implies that South African is 20 percentage points shy of the country that has better policies of protecting local investors. To score higher than this, South African needs to implement more strategies that focus leveling ground so that local investors and foreign companies can compete on the same level.

South Africa scores low in solving insolvency. The 2020 score of solving insolvency is 54.6 percentage points. This implies that South Africa is 45.4 percentage points shy from solving insolvency in a desirable manner (The World Bank 4). This is because resolving insolvency takes approximately two years, it costs 18.0% of the cost of the estate, and the recovery rate is 34.7 cents in each dollar. Notably, the recovery rate implies that the recovery rate through solving insolvency is minimal. In a different vein, registering property in South Africa has a small score of 59.5, which is 40.5 percentage points shy from an easy registration process (The World Bank 4). To register a property in South Africa, one needs to undergo seven procedures, spend approximately ten days, and incur an 8% cost of the property value. In this regard, one spends a lot of time and money to register a property in South Africa. Regarding the payment of taxes, South Africa scored 81.2% (The World Bank 4). Mainly, this is because payments are made seven times in a year, 210 hours are spent each on paying taxes. Overall, the ease of doing business in South Africa is low.

1. Are other countries wanting to invest in your chosen country?  Why or why not? Support your answer with research.

Yes. Other countries want to invest in South Africa. Among African countries, South Africa’s potential for attractiveness is high. Notably, the country has made significant progress in investing in infrastructure (Santander Trade par. 3). Currently, South Africa leads other African countries in terms of foreign direct investments (FDI) due to effective programs such as SEZ programs.  According to Santander Trade, “The Musina/Makhado SEZ, along the principal north-south route into the Southern African Development Community and close to the border with Zimbabwe, offers a strategic location to attract FDI” ((par. 1). Again, other countries still want to invest in South Africa because of equity flows and intragovernmental loans. Notably, 2019 data on South Africa published by UNCTAD revealed that the country experienced significant growth of FDI by a 166% increase in 2018. In particular, this increase made FDI to reach $5.3 billion. Mainly, the considerable increase resulted from the South Africa government’s policies that encourage equity inflows and intracompany loans.

According to the World Bank’s 2020 Doing Business report, South Africa is ranked number 84 out of the 190 economies. Mainly, this implies that countries below in terms of ease of doing business are more likely to invest in South Africa (Santander Trade par 2). Again, other countries are expected to spend in South Africa because of its many attractive assets such as vast amounts of natural resources, a relatively independent judiciary, productive and developed economy, and a stable political system of government (Santander Trade par. 3). The mining sector, for instance, makes South Africa an attractive market for investors. It has a vast amount of minerals, such as vanadium, manganese, chrome, rutile, ilmenite,  vermiculite, platinum, diamond, gold,  iron ore, palladium, and zirconium.

Again, other countries would like to invest in South Africa because of the country’s enormous market potential. Besides, South Africa has a good design infrastructure as well as competitive domestic markets that offer investors a fairground to compete for customers (Santander Trade par. 3). South Africa has a stable democracy, out of which the rule of law is relatively observed in all areas, including the business environment.

1. What do you see as the future of your country in the world marketplace? Support your answer with research.

In the future, I see South Africa as a country that will have significant command in the world marketplace. Notably, the government is on the process of a continuous process of improving the business environment of South Africa to attract foreign investment and motivate local investors. For instance, the country is working diligently in cultivating policy certainty and consistency, consolidating fiscal debt, and enhances the performance of enterprises owned by the state (Santander Trade par. 3). For instance, South Africa has introduced economic reforms that have improved the stability of its macroeconomic parameters and have reduced customs and tax. Besides, the business climate of the country is attractive, while South Africa’s financial management is efficient. Compared to other African countries as well as other developing countries, South Africa has a relatively large-sized and robust stock exchange. It is through gradual growth that South Africa stock exchange will develop to rival those in advanced economies such as London, Singapore, and New York. Again, the retail and tourism industries in South Africa have a huge potential (Santander Trade par. 3). In particular, the development and investment in these sectors will transform South Africa into a world tourism center.

South Africa is likely to develop through the attraction of foreign investors. Mainly, this is because South Africa is among the highest-ranked countries in the world in terms of protecting investors and their extent of disclosure. Notably, these attributes improve the efficiency of financial markets in a nation. As Eberhart points out, “the more efficient markets are (e.g., the more securities are correctly valued based on fundamentals such as plausible forecasts of future cash flows), the more investors can count on the benefits of global diversification” (par. 9). For instance, when global markets are overvalued, the diversification benefit of investing in such markets tends to be offset by unjustifiable price premiums paid by investors. However, this situation is minimized through investment in countries such as South Africa, whereby efficiency promotes their financial markets (Eberhart par. 9). In the future, therefore, South Africa is likely to attract more investments from robust and risk-averse investors and hence make it a regional financial and economic center in the African continent. In particular, more investments mean more jobs, more consumption, and improved living standards in the country.

Works Cited

Office of the United States Trade Representative. South Africa, n.d., https://ustr.gov/countries-regions/africa/southern-africa/south-africa. Accessed 18 March 2020.

Mandy, Kyle. “South Africa Corporate – Taxes on Corporate Income.” PWC South Africa, 13 December 2019, https://taxsummaries.pwc.com/ID/South-Africa-Corporate-Taxes-on-corporate-income. Accessed 18 March 2020.

Central Intelligence Agency (CIA). The World Factbook, 2020, https://www.cia.gov/library/publications/the-world-factbook/geos/sf.html. Accessed 18 March 2020.

Southern University. Intercultural Communication: High- and Low-Context Cultures, 18 August, 2016, https://online.seu.edu/articles/high-and-low-context-cultures/. Accessed 18 March 2020.

Staff Writer. “New Case Deals with Whether Your Employer can Change your Retirement Age.” Business tech, 21 July 2018, https://businesstech.co.za/news/finance/258955/new-case-deals-with-whether-your-employer-can-change-your-retirement-age/. Accessed 18 March 2020.

South African Revenue Service (SARS). Rates of Tax for Individuals, 26 February 2020, https://www.sars.gov.za/Tax-Rates/Income-Tax/Pages/Rates%20of%20Tax%20for%20Individuals.aspx. It was accessed 18 March 2020.

The World Bank. “Ease of Doing Business Index (1=Most Business-Friendly Regulations).” Doing Business Project, 2020, https://data.worldbank.org/indicator/IC.BUS.EASE.XQ. Accessed 18 March 2020.

My Wage. Annual Leave and Shutdown Periods, 2020,  https://mywage.co.za/decent-work/leave-and-holiday/annual-leave-1. Accessed 18 March 2020.

Hofstede Insights. What about the USA? 2020, https://www.hofstede-insights.com/country-comparison/the-usa/. Accessed 18 March 2020.

Hofstede Insights. What about the South Africa?, 2020, https://www.hofstede-insights.com/country-comparison/south-africa,the-usa/. Accessed 18 March 2020.

The World Bank. “Economy Profile: South Africa.” Doing Business 2020. https://www.doingbusiness.org/content/dam/doingBusiness/country/s/south-africa/ZAF.pdf. Accessed 18 March 2020.

Eberhart, Allan. 3 Reasons To Invest In South Africa. Forbes, 9 March 2017, https://www.forbes.com/sites/allaneberhart/2017/03/09/3-reasons-to-invest-in-south-africa/#3c66c2b629a8. . Accessed 18 March 2020.

Trade economics. Ease of Doing Business in South Africa2008-2019 Data/ 2020-2022 Forecast, 2020, https://tradingeconomics.com/south-africa/ease-of-doing-business. Accessed 18 March 2020.

Santander Trade. South Africa: Foreign investment, 2020, https://santandertrade.com/en/portal/establish-overseas/south-africa/foreign-investment?&actualiser_id_banque=oui&id_banque=0&memoriser_choix=. Accessed 18 March 2020.