Country Guides Country Guide: South Africa

Date Published:

18/11/2009

South Africa is a beautiful, varied country and host to the 2010 FIFA World Cup. But is it the place to invest?

By Gordon Miller

The purple mountains in the wine-growing region of the Western Cape, shimmering in the late afternoon sun, are as seductive as any you’ll ever see. Cape Town’s location beneath Table Top Mountain is as attractive as that of Vancouver, or San Francisco. You’ve got safari, oceans, plenty of land in which to flourish and great restaurants and wineries. But it’s also a land bedevilled by iniquity, poverty, crime and violence, where a large proportion of the population lives below the poverty line.

So, what’s to look forward to? A new president, Dr Jacob Zuma, promises jobs, better health care and a more integrated society. The 2010 FIFA World Cup provides South Africa with an opportunity to show its best face to the world (although critics say the problems will simply be swept under the carpet for the tournament’s duration) and drive strong foreign direct investment.

It might just kick start the country’s ailing property market too. Following a decade of spectacular growth – according to The Economist, property prices grew by 351 per cent between 1997 and 2006, which was the highest worldwide – prices declined in early 2008 and have not truly recovered.

Colliers International, real estate analysts, believes the remainder of 2009 will see the economic downturn continuing to impact on the property market. More broadly, economists are predicting a turnaround in 2010 with economic growth bouncing back to around 5.3 per cent GDP growth.