South Africa 2017-12-01T16:11:24+00:00

SOUTH AFRICA

Country Facts
Population
54.3 Million *
Language
English, Afrikaans, IsiZulu, IsiXhosa, Sesotho
Capital
Pretoria
Region
Sub-Saharan Africa
Currency
South African Rand (ZAR)

*Source: The CIA World Factbook

Trade Indicators
Africa’s largest economy
U.S. is 2nd largest trading partner
39th largest goods trading partner
Most competitive economy in Sub-Saharan Africa
The U.S.’ 41st largest goods export market

Top Industry Export Opportunities

Agricultural Equipment

Compared to the rest of Africa, South Africa has by far the most modern, productive and diverse agricultural economy. Agriculture as a percentage of GDP has decreased over the past four decades, currently contributing approximately around 2%. South Africa is seen as a major contributor to agriculture with tractor sales constituting around 60% of the market followed by combine and baler sales. Of new agriculture equipment, 5% is produced locally, while 95% of agriculture equipment and parts are sourced from international markets, with at least 25% coming from the United States. Opportunities in the market are: tractors, combine harvesters, balers, planters, precision agriculture equipment and technologies, sprayers, irrigation, storage, soil testing equipment, and spare parts.

Green Building Materials

South African trained environmental professionals take lessening their carbon footprint seriously and use design and technological innovation to decrease energy consumption and limit waste. However, local suppliers and manufacturers hesitate to tie up funds with green stock amidst the construction industry’s decline. As a result, there are only a few green manufacturers in South Africa and most products are outsourced from abroad (mainly from Australia and the EU). Opportunities in the market include: natural heating and cooling technologies; natural and energy-saving lighting technologies; energy generation technologies, such as photovoltaics, wind turbines, solar hot water heaters, flat panel collectors, and evacuated tubes; and heating, ventilation and cooling technologies, such as greenwalls, glazing and windows, solar shading, greenroofs/cool roofs, permeable paving, water-efficient technologies, structural insulated panels, and formaldehyde-free board.

Medical Equipment

South Africa’s underdeveloped market offers potential for growth but is considerably restrained by funding issues, poor infrastructure and staff shortages (particularly in the public sector). Opportunities will exist for exporters of medical equipment (particularly new and innovative equipment), as extensive upgrades and development of hospital infrastructure is being considered. The private healthcare sector is very sophisticated and boasts world-class facilities with several centers of excellence. However, approximately 93% of equipment is imported. Refurbished equipment is not favored by the medical community, particularly in the private sector. Opportunities in the market include: diagnostic imaging equipment, dental equipment, patient aids, orthopedics, and prosthetics.

Trade Regulations & Customs Information

Import Tariffs: South Africa applies Most Favored Nation (MFN) rates to imports from the rest of the world, as well as preferential rates applied to products originating from trade partners with which it has negotiated trade agreements. South Africa has an Economic Partnership Agreement (EPA) with the European Union.  Tariff rates are part of the Southern African Customs Union Arrangement (SACU). They have been reduced from a simple average of more than 20% to an average of 5.8%. Notwithstanding these reforms, importers have complained that the tariff schedule remains unduly complex, with nearly forty different rates. Tariff rates mostly fall within eight levels ranging from 0 to 30%, but some are higher (e.g. most apparel items).

Import Duty: Nearly all of South Africa’s specific and composite duties were converted to ad valorem rates (a tax, duty, or fee which varies based on the value of the products, services, or property on which it is levied), with a few exceptions remaining in a limited number of sectors, including textile and apparel products. The dutiable value of goods imported into South Africa is calculated on the f.o.b. (free on board) price in the country of export, in accordance with the WTO (ex-GATT) Customs Valuation Code. The value for customs duty purposes is the transaction value, or the price actually paid or payable. The value-added tax (VAT) is 14%.  VAT is payable on nearly all imports. However, goods imported for use in manufacturing or resale by registered trades may be exempt from VAT. Ad valorem excise duties are levied on a range of “up market” consumer goods.  The statutory rate is currently 10% (except for most office machinery, as well as motorcycles, that attract duty of 5%).

Import Requirements and Documentation: South Africa has a complex import process. The South African Revenue Service (SARS) defines approximately 90,000 product tariff codes that are strictly enforced on all imports. New-to-Market U.S. exporters are actively encouraged to engage the services of a reputable freight forwarding/customs clearance agent well versed in South African convention. Customs South Africa (Customs SA), a division of SARS, requires that an importer register with its office and obtain an importer’s code from SARS. This impacts many importers and may cause delays to clearance of goods. SARS uses a Single Administrative Document (SAD) to facilitate the customs clearance of goods for importers, exporters and cross-border traders. The SAD is a multi-purpose goods declaration form covering imports, exports, cross border and transit movements. Shipments to South Africa must include: a bill of lading (one negotiable and two non-negotiable copies), a Declaration of Origin form (if a rate of duty lower than the general rate is claimed), a Commercial Invoice (four copies and one original), a copy of the insurance certificate (for sea freight), and three copies of the Packing List.

Customs Regulations: The South African Revenue Service (SARS), a division of the Department of Finance/ Treasury, administers import duties and controls. The latter are implemented in consultation with the Department of Trade and Industry.

U.S. Export Controls: South Africa is a party to the Wassenaar Arrangement. South African “listed” items are those that appear on the Department of Commerce Control List.  These require a license to be exported to South Africa based on the Export Control Classification Number and the Country Chart.

Source: The International Trade Administration (ITA), U.S. Department of Commerce www.export.gov

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