As at January 2013

Geography

The first committed European settlers in South Africa was Jan van Riebeeck who arrived in the Cape on 6 April 1652 on behalf of the Dutch East India Company. The British arrived in 1820 taking control over the Cape. The First Boer War in 1880 wrestled control of Transvaal by the Boers from the British. The Union of South Africa was formed in 1909, with British again securing control. Under referendum, in 1960 South Africa became a Republic and in 1992 became a multi-cultural democracy.

The nine provinces of South Africa are – the Eastern Cape, the Free State, Gauteng,  Kwa Zulu-Natal, Limpopo, Mpumalanga, the Northern Cape, North West and the Western Cape (SAINFO 2013).

Population

The latest population by province available by SA government is summarized in table below (Statssa 2013) – note that population growth in SA has been negative since 2008, with -0.41% in 2012 (-0.38 in 2011):

Mid-year population estimates by province, 2011Population estimate % of total population
Eastern Cape 6 829 958 13,50
Free State 2 759 644 5,46
Gauteng 11 328 203 22,39
KwaZulu-Natal 10 819 130 21,39
Limpopo 5 554 657 10,98
Mpumalanga 3 657 181 7,23
Northern Cape 1 096 731 2,17
North West 3 253 390 6,43
Western Cape 5 287 863 10,45
Total 50 586 757 100,00

Economy

GDP for the year ending 30 September 2012 amounted to 2.3%, with significant drop in the last quarter at 1.2%. GDP growth declined steeply in 2009 but has been recovering since but at slower rate, due to mining disruptions and labour relation disputes . GDP per capita PPP is estimated at USD$11, 034.00 as at April 2011 (TRADE ECON 2013).

South african GDP growth rate

 

South Africa GDP Per Capita

Inflation CPI(all groups) for the month of December  2012 is running at 5.6% and is tending sideways at around 5.5% for the calendar year ending 21 December 2012. Unemployment rate through to 30 November 2012 remains relatively high  at 25.5% (TRADE ECON 2013).

South Africa Unemployment

Annual wages for year ending 30 September 2012 was ZAR 36,988 with annual labour cost increase of approx. 3.1%pa. There is a significant variance in rate of average employee wages to average senior executive wages. (TRADE ECON 2013).

South Africa Wages

Financial

Reserve Bank cash rate at 15 January 2013 is 5.00%. South Africa’s 10 year bond rates and above is 7.09% (RESBANK 2013). South Africa’s home loan rate (FNB 2013) is 9.0% and its prime overdraft rate is 9.00%.  See below for direction of 10 year bond rates (RESBANK 2013).

South African 10Y bond rates

The all-industrial index for the Johannesburg Stock Exchange at 15 January 2013 is 39,861, up 21.3% year on year performance (TRADE ECON 2013). But see below annual currency devaluation trend in order of 9-12%pa.

South African Stock Market

Fiscal

Company tax rate for years ending after 1 April 2012 – 31 March 2013 is 28%, for service companies 33% and for foreign companies with RSA sourced income 33%, Domestic companies are also required to withhold 15% dividend tax DT on dividends distributed. CGT (max rate) for companies is 14% (being 50% of CGT included), for individuals 10% (25% of CGT included) and trusts 20% (50% of CGT included). For individuals and trusts rates are as follows (SARS 2011):

Individual table rates – 28 February 2013

TAXABLE INCOME (R) RATES OF TAX (R)
0 – 160 000 18% of each R1
160 001 – 250 000 28 800 + 25% of the amount above 160 000
250 001 – 346 000 51 300 + 30% of the amount above 250 000
346 001 – 484 000 80 100 + 35% of the amount above 346 000
484 001 – 617 000 128 400 + 38% of the amount above 484 000
617 001 and above 178 940 + 40% of the amount above 617 000

By virtue of the primary rebate of ZAR 11,640, the first ZAR 63,555 of taxable income is exempt (and for those over 65 the secondary rebate is ZAR 6,390, providing the first ZAR 99,055 is exempt).

Double tax treaties

South Africa has entered into double tax treaties (DTAs) with the following countries in Africa – Algeria, Botswana, Egypt, Ethiopia, Ghana, Lesotho, Malawi, Mauritius, Mozambique, Namibia, Nigeria, Rwanda, Seychelles, Swaziland, Tanzania, Tunisia, Uganda, Zambia and Zimbabwe. DTAs with other countries included – Australia, Austria, Belarus, Belgium, Brazil, Bulgaria, Canada, China, Croatia, Cyprus, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, India, Indonesia, Iran, Ireland, Israel, Italy, Japan, Korea, Kuwait, Luxemburg, Malaysia, Malta, Mexico, Netherlands, New Zealand, Norway, Oman, Pakistan, Poland, Portugal, Romania, Russia, Saudi Arabia, Singapore, Slovak Republic, Spain, Sweden, Switzerland, Taiwan, Thailand, Turkey, Ukraine, UK and USA.

Currency

As at 14 January 2013 (LTM comparison), ZAR100 equals £7.10 (2012-£8.06), €8.58 (2012-€9.67), USD$11.48 (2012-USD$12.36) and AUD$10.87 (2012-AUD$11.98). Average currency depreciation between 9-12% over last twelve months (LTM).

 

References