World Travel Guide

City Guide  - Johannesburg  - Business
Business

Despite the continuing negative influences of past Apartheid economic policies, a high crime rate, a low gold price and soaring oil prices, South Africa still has the strongest economy on the African continent. Gauteng Province, of which Johannesburg is the capital city, contributes over 40% of South Africa's GDP (Gross Domestic Product), while covering only 7% of its surface area. A sophisticated 'first-world' economy is epitomised by the JSE (Johannesburg Stock Exchange, recently renamed Securities Exchange South Africa), which is the tenth richest in the world. A struggling 'third-world' economy, however, coexists alongside, as exemplified by large 'squatter-settlements'.
Johannesburg is South Africa's centre for all rail and road connections; it has the main container terminal at Kaserne and the busiest international airport. Greater Johannesburg and its surrounding areas attract approximately 76% of foreigners visiting South Africa from the rest of Africa and 60% of these visit Johannesburg primarily to shop and look for entrepreneurial opportunities, over and above leisure pursuits. Johannesburg is the economic epicentre of the country and the government has recognised that, in order to attract domestic and foreign investment, it must necessarily be a clean, functioning city.

Much of downtown Johannesburg has been victim of capital flight to the (perceived) safer, less-congested and cleaner suburbs and satellite towns, such as Sandton and Midrand. Symptomatic of this growing inner-city decay is the fact that the JSE has recently followed the path of many major corporations by migrating from the CBD to Sandton, ten kilometres (six miles) north. Efforts are being made to attract investment back to the city centre and Spoornet's (the national rail provider) relocation back already indicates a degree of success. A programme labelled iGoli 2002, which aims to make the CBD secure and attractive once more to tourist and businesspeople alike, has been instituted. Managers are being put on performance contracts, while workers are being transferred to new, private enterprises that will run the various municipal services along business lines. This is being vehemently opposed by Unions, such as SAMWU (SA Municipal Workers Union), which has rejected the restructuring due to the large number of jobs that will be lost.

Black Economic Empowerment
and Affirmative Action are still contentious issues both in the political and business arenas. Business is still largely dominated by white people but there are a number of black-controlled groups on the JSE and several JSE stockbroking firms are black-owned. Major black empowerment acquisitions include JCI and Johnnic (from Anglo American) and Zenex Oil (from the Zenex Trust). Many companies have well-thought-out programmes of Affirmative Action, designed to correct the inequities of the past and accelerate the development of historically disadvantaged employees. However, others make 'politically correct' affirmative action appointments, which are very well paid but often protected from real decision-making.

Through its GEAR (growth, employment and redistribution) policy the South African government has shown its commitment to privatisation, free trade and the fostering of a favourable investment climate. The mining (Anglo American has its African head office in Johannesburg) and heavy industry (Iscor Vanderbijlpark, AECI) sectors are fast being eclipsed by financial services (Johannesburg Stock Exchange, First National, ABSA, Barclays, Western Union and Standard banks), telecommunications (Telkom, Vodacom, MTN), retailing (Pick'n'Pay/Wooltru Holdings) and technology (IBM, PQ Holdings, Dimension Data). The tourism sector's contribution to the GDP of South Africa (presently around 11%) continues to be undermined by crime. During March 2000, figures show that a total of 464,745 foreign travellers visited South Africa (80% via Johannesburg International), down 5% from the 1999 figure.

Business Etiquette: The South African population is characterised by diverse heterogeneity. This is nowhere more evident than in cosmopolitan Johannesburg, where some areas have the feel of a large European city, while other parts are unmistakably third-world Africa. South Africa has eleven official languages, although English is the most widely used language in government (both national and provincial) and commerce. Normal business hours are 0800-1700, but not much happens after 1500 on Fridays.
Although South African business people have in the past been considered to be quite conservative and formal in both demeanour and dress, the influence of newly empowered black entrepreneurs has introduced a business culture that is more friendly, informal and relaxed. Businessmen and woman in Johannesburg tend to wear suits, although ethnic outfits are increasingly evident. It can, however, become very hot during summer and bitterly cold during winter in this part of South Africa, so this should be taken into account - lightweight materials in the warm months (October-April) and heavy overcoats for the cold period (May-September).

Punctuality is still highly prized and it is advisable to address your hosts as 'Mr' or 'Ms' until requested to use first names, which usually happens soon after formal greetings are dispensed with. The triple handshake is common among black businesspeople, although, even in these situations, the standard handshake may well take precedence with an international visitor. Gifts are not expected in either business or social situations. Business cards are often exchanged where businesspeople meet informally, such as in hotel lobbies, airport lounges and at product launches. Most initial business-related contact is along the lines of 'let's do lunch', while dinner and breakfast appointments are far less frequent.



Copyright © 2001 Columbus Publishing
    
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