At the southern tip of the world’s second largest continent, lies a country that once had a desolate economy, but today, is experiencing fast growth in its trade sector.

A foreign investor would once have had to think twice about trading with South Africa, which was under the segregationist policies of Apartheid until recently.

Only 15 years ago, company growth was something to be aspired to, but following the lifting of international sanctions, South African companies were able to catch up to their counterparts around the world.

If a new business decides to open its doors in an African town - selling anything from cell phones to financial services, and fast food - it’s most likely to open up in South Africa.

Since 1991, South African firms have invested an average of $1.3 billion per year in other African countries. Exports to African markets have escalated by 59 percent in the last three years. The country is now Africa's leading provider of foreign direct investment, according to the research group Liquid Africa.

Local focus

Following its invitation back into the global market, South Africa began to expand on its own continent, and then, into the more lucrative North American and European markets.

South Africa now has many successful companies which have expanded into overseas markets. These multinational firms represent a model for neighboring African nations that are looking to extend their influence abroad.

Telecoms group, MTN, expanded into Uganda, Rwanda and Swaziland in 1997 and now the company enjoys an operating margin of 50 percent outside South Africa. Figures released in March 2005 from the London Business School reported that Africa has seen faster growth in cell phone subscriptions than any other region in the world over the last five years. At the end of June 2005, MTN had 17 million subscribers across its cellular network operations.

South Africa has grown exponentially, now contributing more than a third of sub-Saharan Africa's GDP.

Beyond Africa

South Africa, however, continued to expand the reach of its multinational companies.

An advantage for South African companies is its vast availability of natural resources, which makes the mining industry, a popular investment choice. Anglo American Corporation and De Beers are among the top mining companies in the world.

De Beers has branched out to 25 countries worldwide and is the largest diamond mining company in the world today, producing over 40 percent of global gem diamonds. In 2005, it released its annual report showing that own earnings totaled $782 million.

Another key company that is playing a vital role in South Africa’s rapid global expansion is brewing giant, SABMiler. In addition, Sasol, an energy and chemicals company that operates in over 20 countries worldwide, is another key representative company for South Africa’s strong economy.

Economic policy

South African economic policy is fiscally conservative, but pragmatic. President Thabo Mbeki’s government emphasizes a market-orientated approach to increase job growth and household income.

Mbeki, who has been president since 1999, believes that a global financial system is able to inject capital to help develop the country, so long as free trade and privatization inducements are provided.

Under him, South Africa has become a leading force behind a pan-African movement meant to end on-going conflict on the continent and stimulate much-needed economic growth.

South Africa is a member of the New Partnership for Africa's Development (NEPAD), adopted in 2001, together with Algeria, Egypt, Nigeria and Senegal whereby they work together to develop a socio-economic framework for Africa.

Mbeki has worked together with NEPAD - multinational effort to develop an integrated socio-economic network for the continent - to put an end to the marginalization of Africa’s global trade, by enhancing South Africa’s integration into the global economy.

NEPDAD serve as a platform to review fellow African countries political and economic policies. This in turn, guarantees that peace and security are in place, which will result in increased development from Western countries. Ultimately, Mbeki would like to see Africa become one giant economic community, similar to the European Union.

With a Gross Domestic Product of $533 billion, one of the world's largest stock markets, and a sophisticated infrastructure and manufacturing base, South Africa has made use of all its resources to advance to its current level and is not trailing too far behind Mbeki’s hope for a strong Pan-African economic powerhouse.

However, there remains concern about South Africa’s high unemployment rates. In spite of its companies’ booming growth, it is a problem which is damaging the economy. Currently, 27 percent of the population is unemployed, a slight increase from 2005. However, the nation’s GDP is showing 5 percent growth from last year.

While the economy is generating jobs, it’s not enough to keep pace with the number of new entrants into the labor market.

We will also speed up the consultative process to determine the measures we must take to improve the regulatory climate to facilitate the expansion of this (business) sector, said Mbeki in his State of the Nation speech in February this year.

With a growing business community and an expanding international profile, the South Africa is a nation on the rise.