Analysis

South Africa awaits the implementation of a comprehensive national health insurance system
OBG
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South Africa has a patchwork health insurance system with many key pieces missing. A state scheme exists that provides free healthcare. Its footprint is limited though; it excludes anyone earning more than R6000 a month ($518). Private insurance is available to those who earn more, but it is expensive and often comes in low on reimbursement. Cheaper, less generous policies are on the market, as are…

Analysis

South Africa prioritising beneficiation to retain greater share of mineral value in-country
OBG
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The development of key mining value chains, known as beneficiation, is a major objective for the government. While mining operators support the concept in theory, the practical application has proven more difficult and made the related policies in the pending Mineral and Petroleum Resources Development Act (MPRDA) amendment and the Department of Trade and Industry’s Mineral Beneficiation Action Plan…

Analysis

South African mining industry exploring alternative energy sources in response to insufficient generation capacity
OBG
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Insufficient generation capacity in South Africa led to 99 days of load shedding between January and August 2015, with the impact on the country’s energy-intensive mining industry of particular concern. Rising Costs Energy costs for South Africa’s mining industry have increased by over 250% since 2010, according to Peter Leon, head of Africa mining and energy at law firm Webber Wentzel. With…

Analysis

South African luxury retail market growing
OBG
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The retail sector in South Africa has seen mixed fortunes in recent months, with a slowdown in vehicle sales, but encouraging news in luxury goods. New passenger vehicle sales, which constitute just under two-thirds of overall automotive sales, fell 9% yearon-year (y-o-y) in September 2015, on top of a 8.2% y-o-y decline in August, according to the Department of Trade and Industry. However, y-o-y vehicle…

Analysis

Expanding opportunities for South African fast-moving consumer goods segment
OBG
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Around the world, fast-moving consumer goods (FMCGs) tend to be more resilient to economic volatility than other manufactured products. This category of low-cost goods, sold quickly, includes a range of consumables like processed and perishable foods, soft drinks, basic toiletries, beer and basic pharmaceuticals. FMCGs are less discretionary than electronics and automobiles, low-margin and high-volume. Market…

Analysis

South African automotive industry remains resilient
OBG
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The automotive industry is the biggest contributor to manufacturing GDP and one of the most dynamic parts of the segment. While other industries are struggling, automotive firms have proven resilient, due to the segment’s strong degree of integration, with domestic component suppliers flourishing, a solid policy framework and export diversification. Major Driver The broader automotive sector contributed…

Analysis

Growing number of carriers joining South Africa's aviation market
OBG
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Following the liberalisation of the aviation industry in 1991, the survival rate of new entrant domestic airlines has been low. Two new entrants launched services in South Africa – a trend that is set to continue as new start-ups seek to capture a share of the air passenger growth that is predicted to grow over 5% annually up until 2032. Competition has led to a drop in fares early in 2015, but carriers…

Analysis

Increased focus on tapping renewable sources in South Africa to combat load shedding
OBG
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In April 2015 the minister of energy, Tina Joemat-Pettersson, announced 13 winning bids for the fourth round of the Renewable Energy Independent Power Producer Procurement (REIPPP) programme. The programme was established in 2011 to combat load-shedding, diversify the energy mix, curb emissions and encourage greater private participation in the sector. Including the fourth round awards, 5423 MW in…

Analysis

Industry stakeholders in South Africa turn to liquefied natural gas to meet growing demand for energy
OBG
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As South Africa continues to face problems with load-shedding, government and industry stakeholders have turned towards liquefied natural gas (LNG) as a solution to meet demand. The country is also working to generate new capacity from coal-fired and renewable power plants. Options In June 2015 the Department of Energy announced that it was receiving preliminary proposals for the development of an…

Analysis

South Africa's residential real estate segment increasingly attractive for investment
OBG
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While real estate investment trusts (REITs) are relative newcomers to the South African market, with the regime governing the investment vehicle codified for the first time in 2013, they have outperformed other classes of assets in the first three quarters of 2015. Looking ahead, the residential component of the property market, which has yet to be tapped by REITs, offers new opportunities for growth…