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Department of Trade and Industry The aim of the Department of Trade and Industry is to facilitate sustainable economic activity and employment for all South Africans through higher levels of investment and of exports, increased access for South African products in international markets, to grow enterprises and help define economic policies, and to create a fair, transparent, competitive and efficient market-place for domestic and foreign businesses, as well as for consumers. The key objectives of the Department are to:
The U.S. is one of South Africa's key trade partners. The relationship between the two countries has been deepening steadily since 1994. South Africa is a beneficiary of the U.S.' Generalized System of Preferences (GSP), which grants duty-free treatment for more than 4,650 products. South Africa is also a beneficiary of the Africa Growth and Opportunity Act (AGOA), which permits duty-free entry of clothing and selected textiles into the U.S. until 30 September 2008, subject to certain strictly defined criteria and policy reforms. Under AGOA, South Africa receives additional GSP (duty-free) treatment for 1,897 products until 2008. AGOA was proclaimed on 2 October 2000 and originally designated 34 countries in sub-Saharan Africa as eligible for the trade benefits of AGOA. The South African-U.S. Bilateral Co-operation Forum has replaced the BNC between the two countries. A sign of the healthy relationship between South Africa and the U.S. was South Africa's exemption from new U.S. steel tariffs imposed in 2002. For more information, please visit the Department of Trade and Industry's website. Overview of South Africa's Economy South Africa is the economic powerhouse of Africa, with a gross domestic product (GDP) four times that of its southern African neighbors and comprising around 25% of the entire continent's GDP. The country leads the continent in industrial output (40% of total output) and mineral production (45%) and generates most of Africa's electricity (over 50%). Its major strengths include its physical and economic infrastructure, natural mineral and metal resources, a growing manufacturing sector, and strong growth potential in the tourism, higher value-added manufacturing and service industries. South African banking regulations rank with the best in the world. The sector has long been rated among the top 10 globally. There are 55 locally controlled banks, 12 foreign-controlled banks and five mutual banks. Some of the world's leading institutions have announced their intention to enter the local banking sector through mergers and acquisitions. The JSE Limited is the 18th largest exchange in the world by market capitalization (some R3.3-trillion as of September 2005). The JSE's rules and their enforcement are based on global best practice, while the JSE's automated trading, settlement, transfer and registration systems are the equal of any in the world. Four main metropolitan areas dominate economic activity within the country: Johannesburg and its surrounds (Gauteng province), the coastal Durban/Pinetown areas (KwaZulu-Natal), the Cape Peninsula (which includes Cape Town), and the Eastern Cape's Port Elizabeth/Uitenhage area. The financial and industrial sectors are concentrated in Gauteng province, which on its own accounts for over 30% of the country's GDP. South Africa's Economic Growth South Africa's economy has been in an upward phase of the business cycle since September 1999 - the longest period of economic expansion in the country's recorded history. During this upswing - from September 1999 through to June 2005 - the annual economic growth rate averaged 3.5%. In the decade prior to 1994, economic growth averaged less than 1% a year. According to the South African Reserve Bank, there is no sign of this period of expansion coming to an end. Gross domestic product (GDP) growth was running at an annualized 4.8% in the second quarter of 2005 (compared to 3.7% in 2004 and 2.8% in 2003). Consumer inflation has been on a downward trend since 2002, when consumer prices increased to an average 9.3% following the September 11 tragedy in New York. Consumer inflation averaged 6.8% in 2003 and 4.3% in 2004 - compared to 9.8% in 1994. At the same time, prudent fiscal management has seen South Africa's budget deficit come down from 5.1% of GDP in 1994 to 2.3% of GDP in 2004. In the first quarter of 2005, this figure fell to 1.6%, with the SA Revenue Service collecting nearly U.S.$3.5-billion more than expected. The source of the revenue windfall was not higher individual or corporate taxes - both have fallen since 1994 - but the performance of the economy, consumer confidence, and a dramatic increase in the number of registered taxpayers, from 2-million in 1994 to more than 5-million in 2004.
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