PESTEL Analysis of South AfricaPresented by-Grishma Rane.-Nikita Kadam.

Introduction

• Developed country • Upper-middle-Income Country• 25th Largest country in the world by land area with

population close to 53 million people• Afrikaan & English• Economy – 2nd largest in Africa & 34th largest in the

world.

PESTEL Analysis

• The PESTLE Analysis is a framework used to scan the organization's external macro environment. The letters stand for Political, Economic Socio-cultural, Technological, Legal and Environmental.

Political• The President of South Africa, serves both as head of

state and as head of government.• Since 1990s the African National Congress (ANC) has

dominated South Africa's politics• General elections take place every 5 years.• The constitution's bill of rights provides extensive

guarantees including :-equality before the law -prohibitions against discrimination-the right to life, privacy, property, and freedom -prohibition against slavery and forced labor-freedom of speech, religion, assembly,

association.

Jacob Zuma

Economic• The economy of South Africa is the second-largest in Africa.• High levels of unemployment, income inequality, growing

public debt, political mismanagement, low levels of education, reliable access to electricity, and crime are all serious problems that have negatively impacted the South African economy

• South Africa was found to have the second most sophisticated financial market and the second-lowest effective business tax rate

• In 2011, after a year of observer status, South Africa officially joined the BRICS group of now-five emerging-market nations at the summit held in Sanya, Hainan, China

StatisticsGDP : $323.809 billionGDP growth : +0.7% Unemployment : 25.1%Main industries : mining (world's largest producer of platinum), gold, chromium,

automobile assembly, metalworking, machinery, textiles, iron and steel, chemicals, fertilizer, foodstuffs, commercial ship repair• The agricultural industry contributes around 10% of formal

employment• The manufacturing industry's contribution to the economy is

relatively small, providing just 13.3% of jobs and 15% of GDP.• travel and tourism directly contributed ZAR102 billion to South

African GDP in 2012 and supports 10.3% of jobs in the country.

Social• Population- 49.99 million• Type: White Coloured, Indian/ Asian• There are 11 national languages in South Africa.• The cuisine of South Africa is heavily meat-based and

has spawned the distinctively South African social gathering known as a braai, or barbecue.

• South Africa enacted same-sex marriage laws in 2006 allowing full marriage and adoption rights to same-sex couples.

• Poverty is the highest among the Black population

Black African Coloured Indian or Asian White

Technology • Being rich in coal, South Africa has some of the largest coal-

fired power stations in the world• Despite government efforts to encourage entrepreneurship

in biotechnology, information technology and other high technology fields, not many notable groundbreaking companies have been founded in South Africa

• SEACOM - African cable system is first private venture made towards under-sea cable infrastructure, that provides affordable bandwidth via volume discounts and large bandwidth growth.

• There are 150 internet providers, thus there is internet access is everywhere.

• In rural areas of South Africa telecommunications are limited and quite costly

Future PlanningSouth Africa sees itself as a technology leader in Africa. The country has even bigger ambitions for the future:

• To strengthen its bio-economy to become a world leader in biotechnology and pharmaceuticals;

• To become a key contributor to global space sciences and technology;• To achieve energy security with clean, affordable and reliable energy

supply;• To play a leading role in formulating scientific and technological solutions

to climate change;• To contribute to a greater global understanding of shifting social

dynamics and the role of science in stimulating growth and development in developing countries.

Environment

The current issues that are of a concern are:

• Lack of important rivers/ lakes requires extensive water conservation

• Growth in water usage is more than supply

• Pollution of rivers from agriculture and urbanization

• Air pollution from acid rains

• Soil erosion

• Desertification

• Natural resources

Legal • South Africa has a 'hybrid' or 'mixed' legal system• TRALAC-Trade Law Center in South Africa - is a not-

for-profit organization, building trade law capacity in the southern Africa region

• Main concerns - standards and technical regulations on trade-anti-dumping measures-elimination of import/export duties-non-tariff barriers-quantitative import/export restrictions

Conclusion• South Africa is a sophisticated and promising market, offering a

combination of well-developed First World economic infrastructure with a vibrant emerging market economy.

• Since the current government came to power in 1994, the country has made tremendous strides towards becoming a major contributor in international markets.

• South Africa has abundant natural resources, a well developed banking system, good infrastructure with major capital injections to upgrade this further, a reasonable tax structure, a fairly stable political climate, a stock exchange ranked among the top 20 in the world and it is

the gateway to other African markets.