Background To Business in South Africa

South Africa:

Few other countries offer the business visitor the number of apparent contradictions that can be found in South Africa. It is difficult to think of another country, anywhere in the world, which contains such a diverse mixture of first world economic infrastructure and third world poverty. Who should South Africans compare themselves and their country to? Do they judge themselves by African economic standards (which makes them a superpower,) or by first world yardsticks?

South African GDP per head of population is relatively low in world terms at around $5,790 and yet it accounts for about 25% of the total gross domestic product of the whole of Africa and more than 40% of the continent's total manufacturing output. Thus, South Africa is by far the wealthiest country in Africa and is proud of this fact. It also has a male life expectancy of only 52 years, an AIDS epidemic and an economy where 10% of the population accounts for more than half the nation's income. It is indeed a country of contrast and contradiction.

It is also a country which is undergoing rapid and unprecedented changes, where many of the old structures (both economic and social) have been swept away in a maelstrom of post-apartheid adjustments. What is true in South African business today may not be true tomorrow.

By far the biggest change to have hit South Africa has, of course, been the abolition of the apartheid system and the integration of the majority black population into the mainstream political system. Although the transition from apartheid to the current 'Rainbow Nation' status appears from the outside to have been achieved relatively smoothly, it would be niaive to believe that there are no longer enormous racial tensions within the country. These racial tensions permeate life and can have a significant impact on the development and maintenance of good business relations.