ANNEX 4 
SOUTH AFRICA 
 
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CONTENTS 
    Page 
I. ECONOMIC ENVIRONMENT 281 
(1) M AIN FEATURES  281 
(2) R ECENT ECONOMIC DEVELOPMENTS  283 
(3) D EVELOPMENTS IN TRADE AND INVESTMENT  285 
(i) Trade in goods and services 285 (ii) Investment 287 
(4) O
UTLOOK  288 
II. TRADE AND INVESTMENT REGIMES 289 
(1) G ENERAL  289 
(2) T RADE AGREEMENTS  290 
(i) Overview 290 (ii) Trade, Development, and Cooperation Agreement (TDCA) 292 
(iii) Other trade arrangements 292 
(3) I
NVESTMENT FRAMEWORK  293 
III. TRADE POLICIES AND PRACTICES BY MEASURE 295 
(1) I NTRODUCTION  295 
(2) M EASURES DIRECTLY AFFECTING IMPORTS  295 
(i) Registration, import duties, and related measures 295 
(ii) Import prohibitions, controls, and licensing 298 (iii) Local-content requirements 302 
(iv) Standards and other technical requirements 302 
(v) Government procurement 313 
(3) M
EASURES DIRECTLY AFFECTING EXPORTS  315 
(i) Export registration and procedures 315 
(ii) Export taxes and levies 316 (iii) Export prohibitions, controls, and licensing 316 
(iv) Export subsidies, finance, and assistance 317 
(4) M
EASURES AFFECTING PRODUCTION AND TRADE  318 
(i) Incentives 318 
(ii) State trading, state-owned en terprises, and privatization 320 
(iii) Competition policy and price controls 321 (iv) Protection of intellectual property rights 325 
IV. TRADE POLICIES BY SECTOR 330 
(1) I
NTRODUCTION  330 
(2) A GRICULTURE  330 
(3) M ANUFACTURING  338 
(i) Automotive sector 340 
(ii) Textiles and clothing 341 WT/TPR/S/222/ZAF Trade Policy Review 
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    Page 
(4) M INING , ENERGY , AND WATER  342 
(i) Mining 343 
(ii) Petroleum and gas 346 (iii) Electricity 347 
(iv) Water 349 
(5) S
ERVICES  350 
(i) Overview 350 
(ii) Financial services 352 
(iii) Communications 356 (iv) Transport 360 
(v) Tourism 365 
REFERENCES   369 APPENDIX TABLES  373 
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CHARTS 
    P a g e  
I. ECONOMIC ENVIRONMENT  
I.1   Direct investment in South Africa by origin, 2001-07 287 
I.2 Direct investment in South Africa by sector, 2001-07   288 
TABLES 
I. ECONOMIC ENVIRONMENT  
I.1 Main economic indicators, 2002-08 281 
I.2 Balance of payments, 2002-08 286 
II. TRADE AND INVESTMENT REGIMES  II.1 Notifications to the WTO, 2003-09 290 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
III.1 Fuel levy, 2009  296 
III.2 Imports benefiting from tax and duty rebates, 2003-07 298 
III.3 Tariff quotas, 2007 301 
III.4 Technical regulations, 2009 304
 
III.5 Phytosanitary regime, 2009 306 
III.6 Standards on agricultural products, 2009 308 
III.7 GMO activities subject to permits, 2009 311 
III.8 State-owned enterprises, 2009 320 
III.9 Anti-competitive complaints referred to adjudication, April 2007 to March 2008 323 
III.10 Intellectual property legislation, 2009 325 
IV. TRADE POLICIES BY SECTOR  
IV.1 Selected indicators in agriculture, 2002-08 332 
IV.2 Selected legislation on agriculture, 2009 334 
IV.3 Agricultural levies, 2009 336 
IV.4 SOEs in the mining and energy subsectors, 2009 342 IV.5 Taxes on services, 2009 351 
IV.6 Development financing institutions, 2009 353 
IV.7 Selected telecommunication indicators, 2003-08 356 IV.8 Port activities, 2009 362 
IV.9 Shipping services, 2003-08 362 
IV.10 Selected travel and t ourism indicators, 2003-07 366 WT/TPR/S/222/ZAF Trade Policy Review 
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APPENDIX TABLES 
    P a g e  
I. ECONOMIC ENVIRONMENT  
AI.1 Structure of exports, 2002-08 375 
AI.2 Structure of imports, 2002-08 376 
AI.3 Origin of imports, 2002-08 377 
AI.4 Destination of exports, 2002-08 378 
II. TRADE AND INVESTMENT REGIMES  
AII.1 Trade-related legislation, 2009 379 
III. TRADE POLICIES AND PRACTICES BY MEASURE  AIII.1 Import permits, 2009 381 
AIII.2 Technical regulations on foodstuffs, 2009 384  
AIII.3 Export permits, 2009 386 AIII.4 Incentive schemes, 2009 389 
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I. ECONOMIC ENVIRONMENT  
(1) MAIN FEATURES  
1. The Republic of South Africa is one of the most important economies on the African 
continent.  Per capita income was US$5,811 in 20 08 (Table I.1).  Economic activity is relatively 
diversified, with services and manufacturing accounti ng for 65.6% and 15.9% of GDP, respectively.  
Despite its modest contribution to GDP (2.6% in 2008), agriculture remains important because it 
absorbs a large share of the unskilled workforce. 
Table I.1 
Main economic indicators, 2002-08  
 2002 2003 2004 2005 2006 2007 2008 
Miscellaneous        
Population (million) 45.34 46.05 46.71 47.36 47.97 48.55 48.70 
GDP at market price (US$ million, current prices) 11 1,130 166,655 216, 340 242,676 257,89 4 283,381 282,995 
GDP per capita (US$, current prices) 2,451 3,619 4,631 5,125 5,376 5,836 5,811 
Real GDP (annual percentage change) 3.7 3.1 4.9 5.0 5.3 5.1 3.1 
Unemployment rate (official definition;  per cent) 30.4 28.0 26.3 26.7 25.5 24.2 23.1 
Sectoral distribution of GDP (percentage) 
Agriculture, forestry, and fishing 2.9 2.7 2.6 2.7 2.3 2.3 2.6 
Mining and energy 8.8 8.9 8.6 8.3 8.0 7.6 7.0 
of which:  mining and quarrying 6.5 6.6 6.3 6.2 5.8 5.6 5.0 
Manufacturing sector 17.2 16.4 16.4 16.3 16.3 16.2 15.9 
Services 62.2 63.1 63.5 63.8 64.5 65.0 65.6 
Construction (contractors) 2.4 2.5 2.6 2.8 3.0 3.4 3.7 
Wholesale and retail trade, catering, and 
accommodation 13.0 13.4 13.6 13.9 14.1 14.1 13.8 
Transport, storage, and communications 9.5 9.8 9.7 9.8 9.9 9.9 10.0 
Finance, insurance, real estate, and business services 18.3 18.5 19.0 19.0 19.4 19.7 20.1 
Community, social, and personal services 19.0 19.0 18.5 18.3 18.0 17.8 18.0 
Government financea (percentage of GDP) 
Revenue, including grants 23.6 22.9 23.6 25.6 26.6 26.9 26.3 
Expenditure and net lending 24.3 25.4 25.6 26.1 26.3 26.1 26.9 
Overall balance -0.7 -2.5 -2.0 -0.5 0.3 0.8 -0.6 
National government debt 38.9 39.6 37.2 35.3 32.9 27.1 23.8 
National government gross external debt 10.8 7.9 6.7 6.5 6.8 6.0 6.2 
National accounts (percentage of GDP) 
Private final consumption 61.8 62.3 62.4 62.6 62.3 61.4 60.6 
Government final consumption 18.4 19.3 19.4 19.6 19.8 19.7 20.4 
Gross fixed capital formation 15 15.9 16.2 17.1 18.8 21.1 23.2 
Change in inventories (after inventory valuation 
adjustment) -2.3 0.0 -0.2 -0.1 0.0 0.0 -1.0 
Residual items -0.1 -0.8 1.0 0.4 0.6 0.0 -0.7 
Exports of goods and services (XGS) 33.0 28.1 26.7 27.4 29.7 31.5 35.4 
Imports of goods and services 29.1 25.8 27.1 28.2 32.9 34.6 38.5 
Monetary aggregates (percentage change) 
Money supply (M2 - end of period)  16.28 15.94 11.63 17.68 20.06 20.70 10.47 
Prices and interest rate (percentage change) 
Inflation (percent change)b 9.3 6.2 1.6 3.3 4.6 7.2 9.8 
Saving rate (%) 10.25 7.25 6.75 6.25 7.00 9.75 10.25 
Lending rate (%) 17.00 11.50 11.00 10.50 12.50 14.50 15.00 
Exchange rate        
U.S. dollar exchange rate (end of period) 10.52 7.56 6.45 6.36 6.77 7.05 8.25 
Real effective exchange ratec 82.55 103.23 110.13 112.50 108.87 105.05 94.07 
Change in real effective rated -9.67 25.05 6.68 2.15 -3.23 -3.51 -10.45 
Nominal effective exchange ratec 66.54 83.23 90.84 91.03 85.68 77.44 64.17 
Change in nominal effective rated -21.70 25.08 9.14 0.21 -5.88 -9.62 -17.14 
Table I.1 (cont'd) WT/TPR/S/222/ZAF Trade Policy Review 
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  2002 2003 2004 2005 2006 2007 2008 
Memorandum        
Current account balance (percentage of GDP) 0.8 -1.1 -3.2 -4 -6.3 -7.3 -7.4 
Total external debt/XGS (%) 83.0 71.5 64.6 61.8 66.9 70.6 61.7 
Gross official reserves (US$ billion) 6.3 7.0 12.8 20.5 26.4 31.8 38.4 
Gross official reserves (months of imports) 2.6 2.0 2.2 3.0 3.3 3.3 3.7 
Trade in goods and services (percentage of GDP) 62.1 53.8 53.8 55.6 62.5 66.0 73.8 
Terms of trade (percentage change)        
Including gold 2.1 3.7 1.1 0.4 4.4 3.2 1.5 
Excluding gold 0.1 4.8 1.8 0.2 2.9 3 0.9 
a Public deficit (-) or surplus (+).  
b A change in the underlying methodology caused an  upward bias to the inflation rate in 2008.  
c Exchange rate Index 2000 = 100. 
d Depreciation (-) and appreciation (+).  
Source:   South African Reserve Bank online information, Quarterly Bulletin  time series.  Viewed at:  
 http://www.reservebank.co.za/;  World Development Indicators CD-R om 2008, Development Indicators 
 (Chapter I);  and data provided by the South African authorities. 
2. South Africa's growth was robust during the period under review, although recent shocks 
have prompted a slowdown.  The economy expanded at an average a nnual rate of 4.5% between 2002 
and 2007, led by strong domestic demand and favourable external cond itions (e.g. terms of trade).  
Prudent macroeconomic management also helped st rengthen public finances, contain inflation, and 
increase foreign exchange reserves in that period.  Ho wever, severe electricity shortages, coupled with 
weaker global demand, triggered a moderation in real  GDP growth to 3.1% in 2008.  Inflationary 
pressures have also been on the rise, driven by increasing commodity and food prices worldwide, as 
well as by considerable exchange rate volatility. 
3. South Africa faces significant unemployment, poverty, and inequality challenges.  Growth 
has led to a decline in unemployment and improveme nt in social indicators.  While unemployment 
has decreased since 2002 (30.4%), it remained high (at 23.1% in 2008), and some 43% of the population lived below the poverty line, US$2 per day in 2006.
1  This is despite efforts to improve 
social welfare.  According to the latest population census, the share of individuals with medical aid 
coverage declined from 14.8% in  2003 to 14.3% in 2007, with an alarming under-representation of 
the poorest individuals (7.4% of covered individua ls);  outcomes regarding education were also 
unsatisfactory.2  Moreover, South Africa's most prominen t social problems, the HIV/AIDS pandemic 
and high crime rate, remain unresolved, with a st rong negative economic impact.  One challenge will 
be to maintain macroeconomic prudence while dealing with these problems. 
4. During the period under review (2003-08), the ra tio of total trade in goods and services to 
GDP increased from 53.8% to 73.8% (52.16% to 61.83% in real terms).  Export growth remained 
strong throughout the period, maintaining a nominal average annual rate of 21%, while imports grew 
at 22.7% (Tables AI.1 and AI.2).  In line with the deteriorating trade balance, the current account 
deficit has been steadily widening since 2003 and reached 7.41% of GDP in 2008.  
5. South Africa's export structure has changed so mewhat since the last Trade Policy Review, 
with the share of manufactured and agricultural pr oducts in total merchandise exports declining;  
while that of mining products increasing.  This is despite electricity-related production interruptions in 
the mining sector and is partly a reflection of favourable commodity prices.  In contrast, manufactures remain the main import category, despite a decline in the total import share from 69.5% in 2002 to 61.5% in 2008.  In terms of markets there has not b een a substantial change since the last Review:   
                                                           
1 OECD (2008a). 
2 Statistics South Africa (2007). SACU-South Africa   WT/TPR/S/222/ZAF 
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the EC continues to be the main destination for Sout h Africa's exports, followed by the United States;  
Japan and China have increased their purchases from South Africa.  The shares of imports from China 
and the rest of Africa have also increased, wh ile those from the United States and the EC have 
declined. 
6. South Africa's economic weight and positive grow th spill-overs to the rest of the continent 
have traditionally underpinned its ke y role in trade and economic integr ation initiatives in the region.  
Besides its important role in Southern African Cu stoms Union (SACU), South Africa is also engaged 
in ongoing liberalization efforts within the Southe rn African Development Community (SADC).  The 
official launch of the SADC Free Trade Area in August 2008 paved the way for a broader customs 
union, monetary union, and a common market in the future.3  Moreover, the current economic crisis 
has prompted ambitious discussions for the inte gration of the Common Market for Eastern and 
Southern Africa (COMESA), the East African Comm unity (EAC), and SADC into a unique trading 
block that would serve as a stepping stone towards the creation of an African Economic Community.4 
(2) RECENT ECONOMIC DEVELOPMENTS  
7. South Africa's relatively strong economic pe rformance between 2003 and 2007 was followed 
by more modest growth in 2008, after a series of adverse global economic  conditions and domestic 
shocks.  Country-wide electricity shortages disrupted  output and hence exports, particularly in mining, 
from the beginning of 2008.  Continuing power rati oning is likely to constrain output growth while 
additional generation capacity is being built (Chapter IV).  Notw ithstanding the tightening economic 
conditions, investment activity in South Africa has re mained strong, driven, in part, by higher public 
spending on infrastructure, and by preparations to host the FIFA World Cup in 2010.  Gross fixed 
capital formation continued to expand robustly thro ughout the review period, reaching 23.2% of GDP 
in 2008 (Table I.1).  Investment could displace cons umption as the main driver of growth, in light of 
the unprecedented levels of household debt and the ri sing costs of servicing it due to the increase in 
interest rates.5 
8. The unemployment rate declined from 30.4% in 2002 to 23.1% in 2008.  Job creation, both in 
terms of absolute figures and shares in overall empl oyment, has been concentrated in construction, 
wholesale and retail trade, and services, whereas agriculture and mining have recorded declines.6  
Despite the trend in recent years, employment pros pects deteriorated substantially in the course of 
2008, in line with the moderation in economic growth.7  In addition, increases in nominal wages fell 
short of the general rise in consumer prices, causi ng a decline in workers' real remuneration.   
9. Fiscal prudence has resulted in gradually impr oving public finances, with budget surpluses 
recorded in 2006 and 2007.  However,  the reversal of favour able economic conditions  in 2008 led to a 
modest deficit of 0.6% of GDP.8  In an effort to cushion the domestic economy, South Africa has 
recently adopted an expansionary fiscal policy stan ce, with a projected budget shortfall of 3.9% of 
GDP for 2009.  In line with national development priorities, the additional public-sector spending 
would be in infrastructure, promoting improved deli very of public services and reinforcing the social 
                                                           
3 SADC online information, "SADC Free-Trade Area" .  Viewed at:  http://w ww.sadc.int/index/browse/ 
page/39. 
4 COMESA/EAC/SADC (2008). 
5 African Development Bank/OECD (2008). 
6 Statistics South Africa (2007). 
7 South African Reserve Bank (2008a), p. 38. 
8 South African Reserve Bank online information, "O nline Statistical Query Facility".  Viewed at:  
http://www.reservebank.co.za. WT/TPR/S/222/ZAF Trade Policy Review 
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 safety net.9  The generally stable fiscal position, up to 2007, had been mirrored by a steady decline in 
the public debt:  the ratio of national government debt to GDP was 23.8% in 2008 down from 38.9% in 2002.  This has helped to improved investor  sentiment towards South Africa.  Government 
borrowing from abroad also declined during the review period, to 6.2% of GDP in 2008 (10.8% in 
2002) (Table I.1). 
10. The South African Reserve Bank (SARB), w hose independence is guaranteed by the 
Constitution, has maintained an in flation targeting system since 2002.
10  The policy has been broadly 
successful.  Inflation declined from about 9.3% in  2002 to just over 3% in 2005 just within the 
SARB's target zone of 3-6%.  However, inflation started to increase thereafter, and in 2007, breached 
the upper end of the inflation target range for th e first time since August 2003.  The SARB increased 
interest rates but inflation has continued to rise beyo nd the authorities' upper target rate of 6%.  South 
Africa is exposed to considerable external and domestic inflationary pressures from rising food and 
energy prices; the depreciation of the rand has added to inflationary pressures, through import prices pass-through, as have the increasing domestic electri city tariffs (Chapter IV).  In response, 
South Africa's Monetary Policy Committee (MPC) has increased interest rates several times with a 
view to containing inflation and moderating exp ectations for further price increases.  However, 
despite the recent diffusion of external oil pr ice shocks and indications of subdued household 
consumption, domestic price developm ents have continued to defy the tightening of monetary policy.  
According to the MPC's latest ass essment, deteriorating public sentiment about inflation's momentum 
should maintain inflation at about 8.1% in the first quarter of 2009, with a gradual return within the 
target band by the end of the year.
11 
11. Under the freely floating exchange rate system  maintained by the SARB, the rand has been 
volatile over the review period, partly attributed, by  the authorities, to the relatively high proportion of 
off-shore trading.12  However, volatility can also be explained by South Africa's dependence on 
commodities whose prices have been highly variable .  In line with its policy commitment, the SARB 
has continued to gradually build up foreign excha nge reserves without seeking to influence the value 
of the exchange rate.  SARB's gross reser ves increased from US$6.3 billion in 2002 to 
US$38.4 billion at the end of 200813;  nevertheless, reserves remained at around four months of 
imports (Table I.1). 
12. South Africa posted a deficit in the current account of the balance of payments throughout 
2003-08, contrasting with the surpluses recorded in 2001 and 2002.  The steadily widening gap 
reached 7.41% of GDP in 2008, a level not seen sinc e the early 1980s.  The current account deficit is 
the major source of vulnerability, since it exposes South Africa to the risk of a financial crisis due to 
the sudden halt of capital inflows.  Despite slowi ng private consumption growth, imports of goods and 
services continued to outpace exports as demand for capital goods is increasing.  Export earnings also suffered from output constraints in the mining sect or, experienced in the beginning of 2008.  
However, the recent decline of the international price of oil, which had exacerbated current account 
imbalances for a prolonged period, resulted in a significant narrowing of the deficit in the fourth 
quarter of 2008.
14  
                                                           
9 South African Reserve Bank (2009). 
10 In the 2000 Budget Speech, it was announced that inflation targeting would be adopted with an 
average range of 3-6% for the consumer price index excluding mortgage payments. 
11 South African Reserve Bank online information.   Viewed at:  http://www.reservebank.co.za/. 
12 South African Reserve Bank (2008a), p. 55. 
13 South African Reserve Bank (2009). 
14 South African Reserve Bank (2009). SACU-South Africa   WT/TPR/S/222/ZAF 
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13. Portfolio investment was crucia l in financing the current account  deficit until 2006.  However, 
the power crisis compounded investors' concerns about the rising deficit and, accordingly, risk premia 
on South African debt increased markedly and po rtfolio inflows subsided, weakening the stock 
market index and the rand.  Nevertheless, non-reside nts' confidence in the economy's growth potential 
resulted in rising levels of foreign direct invest ment.  Hence, during 2007 and 2008 FDI and "other 
investment" emerged as the predominant source of fo reign funds, more than offsetting the deficit in 
the current account.15     
(3) DEVELOPMENTS IN TRADE AND INVESTMENT  
(i) Trade in goods and services 
14. South Africa's total merchandise trade grew at a nominal average annual rate of 22% between 
2003 and 2008, buoyed by solid economic growth and rising commodity prices.  Total services trade 
expanded at a nominal average annual rate of 24. 5% during the same period.  Merchandise exports 
grew at an average annual of 21.7% and imports at 22.7%;  the corresponding figures for services were 23.8% and 25.2%.
16  The economy's robust expansion was mirrored, however, by a substantial 
deterioration in the trade balance, as the growth of imports of both goods and services continued to 
outpace export growth.  
15. In value terms, merchandise exports more than doubled between 2002 and 2008, to reach 
some US$74 billion (Table AI.1).  Exports of pr imary products were US $35.6 billion in 2008 – an 
increase of about 166% from their 2002 level.  While agricultural exports grew by about 66% over the 
period, exports of mining products more than trip led, to reach US$28.6 billion in 2008, reflecting 
strong global demand.  Exports of manufactured  goods rose to US$38 billion, a 111% increase over 
2002.  Overall, South Africa's export structure has changed somewhat during the period under review. 
Despite doubling in value terms (from US$18 billion to US$38 billion), the share of manufactured products in total exports decreased from 61.7% in 2002 to 51.5% in 2008.  Machinery and transport 
equipment were the main exports among manufactured  goods, followed by iron and steel.  Primary 
products accounted for 48.2% of total exports in 2008, up from 38.2% in 2002.  The increase was 
mainly due to the strong export performance of the mining sector, while agricultural exports recorded 
a gradual decline from 19.5% to 9.5% of total exports. 
16. The value of merchandise imports reached US$87.6 billion in 2008, i.e. over three-times the 
2002 level (Table AI.2).  Imports of primary products increased faster than imports of manufactures 
during the period, with average annual growth rates of 31.4% and 20.2%, respectively.  Nevertheless, 
manufactured goods remained the largest import sector , accounting for 61.5% of total imports in 2008 
(69.5% in 2003). Underpinned by steady infrastruct ure spending, machinery and transport equipment 
remained the most important single import category,  representing 35% of total imports. The share of 
primary products increased by 10.3 percentage poi nts over the period, to 31.8%;  fuels were the 
second largest import category (22.3% of total imports in 2008).  The share of agricultural imports 
remained relatively stable, accounting for 6.1% in 2008. 
17. Despite showing a surplus of US$253 million in  2003, South Africa's services have shown a 
steadily widening deficit since 2004.  In 2008, e xports of services (receipts) totalled US$12.5 billion, 
while imports (payments) totalled US$16.8 billion (T able I.2).  The negative balance was primarily 
attributable to transportation, business travel, ro yalties and licence fees, and other business services.  
The deficit in transportation widened significantly,  as payments for freight shipments more than 
                                                           
15 South African Reserve Bank (2008a), p. 30. 
16 Detailed data for trade in services are not available for 2008. WT/TPR/S/222/ZAF Trade Policy Review 
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 doubled between 2003 and 2008.  South Africa registered comparatively modest, but rapidly 
increasing, surpluses in financial and computer services.17 
Table I.2  
Balance of payments, 2002-08 
(US$ million)  
 2002 2003 2004 2005 2006 2007 2008a 
Overall balance -322.4 -354.4 6,324.1 5,765.8 3,710.8 5,737.3 3,158.9 
Current account balance 884.5 -1,902.3 -7, 003.3 -9,722.8 -16,487.5 -20, 631.3 -20,498.8 
Balance on goods, services, and 
income 1,440.8 -906.4 -5,245.5 -6,921.6 -13,670.5 -17,678.8 -23,408.0 
Balance on goods and services 4,237.2 3,684.1 -927.7 -1,992.6 -8,377.3 -8,755.9 -14,459.1 
Trade balance 4,756.1 3,430.6 -281.5 -995.0 -6,100.9 -5,705.1 -10,191.0 
Exports 31,772.1 38,700.1 48,236.9 55,284.0 63,840.6 76,184.5 79,469.6 
Imports -27,016.0 -35,269.5 -48,518.4 -56,279.0 -69,941.5 -81,889.5 -89,660.6 
Balance on services -518.9 253.6 -646.2 -997.6 -2,276.4 -3,050.9 -4,268.1 
Credit 4,985.2 8,298.5 9,681.8 11,157.3 12,014.1 13,561.6 12,532.1 
Debit -5,504.1 -8,044.9 -10,327.9 -12,154.9 -14,290.5 -16,612.5 -16,800.2 
Transportation (net) -1,271.3 -1,913.1 -2,983.3 -3,794.5 -5,140.3 -5,816.8 -5,965.1 
Travel (net) 1,111.8 2,682.1 3,165.0 3,961.9 4,491.4 4,515.6 3,376.4 
Other services (net) -359.4 -515.4 -828.0 -1,165.0 -1,627.5 -1,749.8 -1,679.4 
Balance on income -2,796.4 -4,590.5 -4,317.8 -4,929.0 -5,293.2 -8,922.8 -8,948.9 
Credit 2,178.8 2,856.7 3,258.5 4,640.5 5,944.4 6,549.7 5,847.8 
Debit -4,975.2 -7,447.2 -7,576.4 -9,569.5 -11,237.6 -15,472.5 -14,796.7 
Current transfers -556.4 -995.9 -1,757.8 -2,801.2 -2,816.9 -2,952.5 -2,972.5 
Credit 139.1 251.7 257.2 239.5 260.9 265.1 .. 
Debit -695.5 -1,247.6 -2,015.0 -3,040.7 -3,077.8 -3,217.6 .. 
Balance on capital account -15.0 43.6 52.4 30.4 30.2 28.0 25.2 
Credit 20.2 43.6 54.7 44.4 42.6 41.3 .. 
Debit -35.2 0.0 -2.3 -14.0 -12.4 -13.4 .. 
Balance on financial account -707.2 -1,961.4 7,651.5 12,582.8 14,684.4 21,161.3 12,566.7 
Direct investment abroadb 402.3 -552.5 -1,305.4 -909.4 -6,535.7 -3,156.0 3,533.3 
Direct investment in South Africac 1,479.8 783.1 701.4 6,522.1 -183.6 5,745.9 9,009.2 
Portfolio investment -417.2 723.4 6,406.7 4,787.0 19,582.8 11,616.3 -15,937.6 
Financial derivatives assets and 
liabilities 0.0 0.0 0.0 0.0 0.0 0.0 .. 
Other investment -2,172.1 -2,915.4 1,848.8 2,183.1 1,820.9 6,955.1 15,961.8 
Net errors and omissions -484.6 3,465.7 5,623.5 2,875.4 5,483.7 5,179.3 11,065.7 
.. Not available. 
a Figures for 2008 from South African Reserve Bank (2009), Quarterly Bulletin , No. 251, March.  Viewed at:  
 http://www.reservebank.co.za/. b Investment by South African residents in undertakings abroad in which they ha ve at least 10% of the voting rights.  
c Investment by foreigners in undertakings in South Africa in wh ich they have individually or collectively in the case of affil iated 
 organizations or persons at least 10% of the voting rights.  
Source:   IMF International Financial Statistic s (IFS) Version 1.1.82, Balance of Pa yments Statistics version 1.1.105.  
18. Bilateral trade flows between South Africa and mo st of its major trading partners increased 
substantially in nominal terms during 2002-08.  At nine times the 2002 level, the value of exports to 
China showed the largest expansion, followed by an eightfold increase in exports to the 
Commonwealth of Independent States.  Exports to th e rest of Africa also gr ew steadily.  There was 
also a surge in the value of imports between 2002 an d 2008 from the rest of Africa, India, and China.  
The value of imports from the United States and the EC also rose. 
                                                           
17 IMF, Balance of Payment (BOP) CD-Rom 2008. SACU-South Africa   WT/TPR/S/222/ZAF 
 Page 287 
 
 
19. The EC remained South Africa's  leading destination and a supp lier of merchandise throughout 
2002-08.  Although maintaining a fairly stable shar e of total exports originating from South Africa 
(around 35%), the EC's relative weight in aggreg ate South African imports decreased from 42.4% to 
31.1% (Table AI.3).  The U.S. share of exports re mained stable while imports declined (Tables AI.4 
and AI.3).  Shipments to China accounted for a gr owing share of South Africa's total exports, rising 
from 2.0% to 5.8% between 2003 and 2008.  The same trend was observed in the opposite direction, 
with the Chinese share of total imports to South Afri ca increasing.  Imports from the rest of Africa to 
South Africa also increased, whereas  South Africa's exports to the con tinent remained relatively stable 
at about 15%. 
(ii) Investment 
20. During 2003-07, annual inflows of foreign direct investment (FDI) into South Africa 
increased sevenfold, and year-on-year growth was 85% in 2008, confirming investors' confidence in 
the South African economy.  FDI increased from US$1.4 billion to US$9 billion over 2002-08.   
21. The majority of overseas funds originate in the EC, particularly from the United Kingdom and 
Germany.  The United States, Switzerland, and Japan  have also been important investors during the 
review period (Chart I.1).  Non-resident investor s have taken ownership in local companies across a 
wide range of sectors, including glass manufacturing,  retail trade, accommodation, financial services 
and platinum mining (Chart I.2).18 
0102030405060708090
2001 2002 2003 2004 2005 2006 2007051015
United States Mauritius China
SACU partner's Japan AustraliaSwitzerland Zimbabwe Malaysia Canada EU(15) Right hand scale: Left hand scale:
Source:Chart I.1
Direct investment in South Africa by origin, 2001-07
US$ billion US$ billion
South African Reserve Bank online information.  Viewed at:  http://www.reservebank.co.za/. 
                                                           
18 South African Reserve Bank (2009);  and South African Reserve Bank (2008a). WT/TPR/S/222/ZAF Trade Policy Review 
Page 288 
 
 
 020406080100120
2001 2002 2003 2004 2005 2006 2007Chart I.2
Direct investment in South Africa b y sector, 2001-07 
US$ billion
Source: South African Reserve Bank online information. Viewed at: http://www.reservebank.co.za/.Agriculture, forestry, fishing, electricity, and construction Wholesale and retail trade
Transport, storage, and communicationsMining and quarrying Finance, insurance, real estate and business services
Manufacturing Community, social, and personal services
 
(4) OUTLOOK  
22. The National Treasury's recent forecasts indicate that South Africa's economy will weaken in 
response to the global slowdown, growing at a rate 1. 2% in 2009.  A gradual recovery to levels above 
4% is expected by 2011.19  Sluggish consumption, weak e xports and slowing private-sector 
investment are expected in 2009.  Sound fiscal a nd monetary policies, a well-regulated financial 
system and prudential limits on foreign investment ha ve helped to limit South Africa’s exposure to the 
crisis.  However, unemployment and poverty rema in the most pressing economic problems along with 
the electricity supply shortages, which threaten near-term growth prospects.  For growth to be 
sustainable, South Africa needs to deal with structural issues such as poor education, which 
contributes to entrenched poverty, inequality, and a gap in skills, which in turn contributes to the high 
levels of unemployment affecting mainly the uns killed poor segments of society.  The economic 
significance of HIV/AIDS and crime are also major constraints to growth.  Further investment in electricity infrastructure, and opening up the South African economy to greater international 
competition in services would help to enhance efficiency and accelerate growth. 
23. The global economic context looks less favourable for South Africa than in recent years.  The 
economy's resilience may be put to test, if th e current account deficit continues to widen, 
progressively deteriorating foreign investors' c onfidence in South Africa's steady macroeconomic 
performance.  While the gradual strengthening of p ublic finances has been a positive factor in that 
regard, the national currency has remained relatively volatile and domestic inflationary pressures will 
continue.  The SARB is likely to miss its inflati on targets, and it does not seem to have a policy in 
place to deal with currency volatility, which could affect growth, as risk averse firms are not willing 
to invest in an economy that has a volatile exchange  rate.  Moreover, exchange  rate volatility could be 
a sign of weak fundamentals. 
                                                           
19 South African Reserve Bank (2008b). SACU-South Africa   WT/TPR/S/222/ZAF 
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II. TRADE AND INVESTMENT REGIMES  
(1) GENERAL  
24. South Africa's institutional structure has rema ined broadly unchanged the 2003 Review of 
SACU.20  The Department of Trade and Industry (DTI) is responsible for formulating and 
coordinating the country's trade and industrial polic ies.  However, other departments and agencies 
also take important initiatives on trade and investme nt policy, such as the Departments of Finance, 
Agriculture, Health, and Mineral and Energy Affair s, as well as the South African Reserve Bank.  The 
private sector is quite instrumental in forwarding proposals and recommendations to the DTI, through 
for example, the National Economic Development and Labour Council (NEDLA C), the International 
Trade Administration Commission (ITAC), which replaced the Board on Tariffs and Trade (BTT)21, 
and the Industrial Development Corporation (IDC).  The IDC and Parliamentary Committees continue 
to play a key role in assisting the DTI in carry ing out periodic reviews and assessments of trade 
policies. 
25. The DTI has evolved to become a key player in modernizing and streamlining South Africa's 
trade and industrial development institutions , and achieving the following strategic objectives22:  
sustaining the relatively good growth levels of th e economy;  contributing to the international 
competitiveness of manufacturing industries;  promoting small, micro, and medium-sized enterprises (SMME);  promoting economic empowerment of prev iously disadvantaged persons ("black economic 
empowerment" (BEE));  reducing inequality and pover ty;  promoting organizational efficiency;  and 
contributing to the development of the SADC region and Africa as a whole. 
26. Based on the Broad Based Black Economic Empow erment Act of 2003, South Africa's policy 
of black economic empowerment (BEE) aims to  realize the country's full economic potential.
23  The 
BEE Act is a sector-wide generic scorecard, which measures corporations' empowerment progress in four areas: direct empowerment through ownership and control of enterprises and assets; management 
at senior level; human resource development and employment equity; and indirect empowerment 
through preferential procurement, enterprise developm ent, and corporate social investment (a residual 
and open-ended category).  This scorecard, as well  as a scorecard for multinational companies, is 
defined and elaborated in the BEE codes of goo d practice, which govern how companies do business 
in South Africa;  they allow global and multinationa l companies some flexibility in how they structure 
their empowerment deals.  The codes are binding on all state bodies and public companies, and the 
Government is required to apply them when ma king economic decisions on: procurement; licensing 
and concessions; public-private partnerships; a nd the sale of state-owned assets or businesses. 
27. Over 2006-09, the DTI has refocused on new po licy developments, represented by five key 
medium-term strategic objective, to:  promote coordinated implementation of the accelerated and shared growth initiative;  promote direct investment and growth in the industrial and services sectors, with particular focus on employment creation;  pr omote broader participation, equity, and redress in 
the economy;  raise the level of exports and promot e equitable global trade;  and contribute towards 
the development and regional integration of th e African continent with in the NEPAD framework. 
                                                           
20 South Africa's overall institutional framework  was described in detail in WTO (1998).  
21 International Trade Administration Act (Act No. 71 of 2002), in force since 22 January 2003. 
22 Department of Trade and Industry (2001a). 
23 The policy reflects the Government's approach, wh ich is to "situate black economic empowerment 
within the context of a broader national empowerment strategy focused on historically disadvantaged people, and particularly black people, women, youth, the disabled, and rural communities". WT/TPR/S/222/ZAF Trade Policy Review 
Page 290 
 
 
 28. The ITAC is responsible for tariff investig ations, amendments, and trade remedies in 
South Africa and on behalf of SA CU (Main Report, Chapter II).  In addition, Trade and Investment 
South Africa (TISA) is mandated to promote investme nt, particularly FDI, and export development in 
South Africa;  and the Companies and Intellectual Property Registration Office (CIPRO) is mandated 
to regulate and service business entities effectively, in order to gain investor confidence, to stimulate 
economic growth, to create awareness of IPR in So uth Africa, and to harmonize the country's IPR 
legislation with international laws (Table AII.1).24 
(2) TRADE AGREEMENTS  
(i) Overview  
29. South Africa is a strong proponent of multilatera lism, and has historically played an active 
part in the GATT/WTO, including in the ongoing DDA  negotiations where it is a key member of 
various configurations under the agricult ure and NAMA areas of the negotiations.   In South Africa's 
view, the DDA negotiations offer WTO Members an opportunity to strengthen the rules-based trading 
system in a manner that reduces imbalances and ine quities, and supports development-related issues, 
which had not been an integral part of any previous multilateral trade negotiation under the 
GATT/WTO (Main Report, Chapter II(3)).   
30. South Africa has made several notifications to the WTO during the review period (Table II.1). 
Table II.1 
Notifications to the WTO, 2003-09 
WTO Agreement Description of 
requirement Periodicity Most recent 
notification Comment 
Agreement on Agriculture 
Article 18.2 Domestic support 
 
Domestic support Annual since  
1996 Annual since 
1996 G/AG/N/ZAF/65 
8 September 2008 G/AG/N/ZAF/58/Rev1 
25 May 2009 Domestic support commitments for 
2005 Domestic support commitments for 
2004 
Article 18.3 Domestic support 
exemptions Annual since 
1996 G/AG/ZAF/68 
25 May 2009 Domestic support measures exempt 
from reduction 
Articles 10 and 18.2 Export subsidies Annual since  
1996 G/AG/N/ZAF/66 
8 September 2008 Export subsidies during 2005 
Article 18.2 Tariff quotas Annual since  
1996 G/AG/N/ZAF/64 
8 September 2008 Tariff and other quota commitments 
during 2006 
Article 5.7 Special safeguard 
provisions Annual since 
1996 G/AG/N/ZAF/63 
8 September 2008 No special agricultural safeguards 
were invoked in 2005 and 2006 
Article 16.2 Decision on possible 
negative effects of the 
reform programme on 
LDC-NFIDC Annual since 
1996 G/AG/N/ZAF/42 
15 October 2008 Technical and financial assistance 
was provided to Zimbabwe, 
Zambia, Swaziland, Mozambique, 
Malawi, Lesotho, and Namibia 
Agreement on the Implementation of Articl e VI of the GATT 1994 (Anti-Dumping Agreement) 
Article 18.5 Laws and regulations Once G/ADP/N/1/ZAF/2 
20 January 2004 Copies of the relevant Acts 
Article 16.4 Anti-dumping actions 
taken Semi-annual G/ADP/N/173/ZAF 
7 August 2008 Anti-dumping actions taken during 
1 January-30 June 2008 
Article 16.5  Competent authority Once G/ADP/N/14/Add.22 
10 October 2006 Committee on Anti-Dumping 
notified 
Article 5.8  Time period for 
determining negligible 
import value Once G/ADP/N/100/ZAF 
23 January 2003 Notification 
Table II.1 (cont'd) 
                                                           
24 See WTO (2003), Annex 4, pp. 227-228 , for details of these institutions. SACU-South Africa   WT/TPR/S/222/ZAF 
 Page 291 
 
 
WTO Agreement Description of 
requirement Periodicity Most recent 
notification Comment 
General Agreement on Tariffs and Trade 
Article XXIV 7(a) Territorial application - 
customs unions  
 
Territorial application- 
free-trade areas Once 
 
 Once WT/REG231/N/1 
28 June 2007 
 
WT/REG256/N/1 
3 November 2008 Notification of SACU to WTO 
 
 
Notification of SACU-EFTA to 
WTO 
Article XXVIII: 5 Modifications of 
schedules Once T/MA/229 
24 December 2008  Modification of Schedule XVIII for 
three years beginning 1 January 
2009 
Agreement on Sanitary and Phytosanitary Measures 
Article 7, Annex B SPS to be notified 
promptly Once  G/SPS/N/ZAF/26 
2 March 2009 Maximum levels of melamine in 
foodstuff 
Agreement on Safeguards 
Article 9.1 footnote Application of 
safeguards – developing 
country Members Once G/SG/N/11/ZAF 
18 June 1996 Consideration given to Indonesia to 
be removed from the list 
Art. 12.6 Laws, regulations, and 
administrative 
procedures Once G/SG/N/1/ZAF/2 
27 September 2004 Committee on Safeguards notified 
Agreement on Subsidies a nd Countervailing Measures 
Article 25.11 Countervailing actions 
taken Semi-annual G/SCM/N/178/ZAF 
1 January-30 June 2008 Countervailing duty actions during 
1 January-30 June 2008 
Agreement on Technical Barriers to Trade  
Article 10.6 Information about 
technical regulations, 
standards, and 
conformity assessment Once G/TBT/N/ZAF/93-97 
27 January 2009 Various regulations 
General Agreement on Trade and Services (GATS)  
Article III:4 or IV:2 Tran sparency Once S/ENG/78/Rev 9 
1 December 2006 Contact and enquiry points notified 
to the Council of Trade in Services 
Agreement on Trade-Related Aspects of  Intellectual Property Rights (TRIPS)  
Article 63.2 Laws and regulations Once IP/N/1/ZAF/C/1/Add.1 
27 and 30 January 2004 Copies of the relevant Acts 
Source:  WTO documents.  
31. South Africa is an important member of th e Southern African Development Community 
(SADC), of which all SACU countries are members (Main Report, Chapter II(3)).  Being an important player in the sub-region, South Afri ca seeks to restructure regional arrangements by 
pursuing policies to promote industrialization in SADC .  This implies encouraging regional exports to 
South Africa, and promoting outward investment to the region.
25 
32. In addition to its regional agreements, S outh Africa has a series of bilateral trade 
arrangements;  the most important is the Trade,  Development, and Cooperation Agreement (TDCA) 
concluded in 1999 with the Eu ropean Communities (EC).   
                                                           
25 The actions foreseen, which were described in full in WTO (2003), include: implementing the SADC 
Trade Protocol to aid market access, fo r regional exports;  linking regional  trade, development, and industrial 
restructuring to reflect comparativ e advantages across the region; promoting coordinated infrastructure and 
resource-based industrial development through sp atial development initiatives (SDIs); encouraging 
South African firms to invest regionally by relaxing foreign exchange controls on capital destined for the region; 
and promoting regional trade facilitation, strengthenin g customs control and administration, and eliminating 
non-tariff measures (Department of Trade and Industry, 2001b).   WT/TPR/S/222/ZAF Trade Policy Review 
Page 292 
 
 
 (ii) Trade, Development, and Cooperation Agreement (TDCA) 
33. The EC remains South Africa's main trading pa rtner and source of FDI (Chapter I(3)(ii)).  
This was one of the main motivations behind the TDCA between South Africa and the EC, which was 
concluded in October 1999.  The TDCA entere d into force provisionally in January 2000 and 
definitively on 1 May 2004, after it was ratified by al l EC member states.  It was notified to the WTO 
on 2 November 2000.26  After the EC enlargement, additiona l protocols to the TDCA had to be 
ratified by the South African Parliament. 
34. South Africa and the EC also concluded a Science and Technology Agreement, which 
provides for South Africa's qualified membership of the the Cotonou Convention.  The Wines and 
Spirits Agreement, signed on 28 January 2002,  has not yet been ratified by South Africa due to 
subsequent disagreements on a number of issues.27   
35. The TDCA provides for asymmetrical trade liber alization between the two parties, with the 
aim of forming a free-trade area by 2012.  South Africa will liberalize around 86% of its imports from 
the EC during a 12-year transitional period, while the EC will liberalize 95% in 10 years, starting from 1 January 2000.  The EC agreed to complete mo st of its obligations on non-agricultural products 
in the initial 3-6 years.  In the case of South Afri ca, sensitive products, comprising 16% of its imports 
from the EC, will be fully liberalized over th e transitional period.  Certain NAMA products, 
representing 3% of South Africa's imports from the EC, are only subject to partial liberalization. 
36. South Africa will remove duties on approximately  81% of its agricultural imports from the 
EC;  while the EC will remove duties on approximately 61% from South Africa.  If partial 
liberalization quotas are included in the latter figure,  approximately 72% of South Africa's exports to 
the EC will be subject to some form of preference under the TDCA. 
37. The TDCA provides for detailed rules of origin.  In  principle, products are considered to be of 
South African or EC origin if they are "wholly obtained" or have been sufficiently worked or 
processed in these countries. An annex to the protocol  on the rules of origin lists the criteria for a 
product to be considered as suffi ciently worked or processed.    
(iii) Other trade arrangements 
38. South Africa has bilateral trade agreements with Malawi and Zimbabwe, and grants           
non-reciprocal preferential treatment on  a number of products from Mozambique.
28   
39. South Africa's trade agreement with Zimbabwe, a member of both COMESA and SADC, 
dates back to 1964, and is subject to various conditions.  The duty-free regime or preferential tariff 
quotas apply to items including dairy products, potatoes,  birds, eggs, some cereals, oil seeds, and 
oleaginous fruits.  Live horses, asses, mules, cott on waste, and metal bedsteads are also duty-free;  
and specified types of woven fabrics of cotton, for example, are subject to concessionary tariff rates, 
when they meet specified levels of Zimbabwean content (75% in most cases).  Concessionary customs 
duties are granted by Zimbabwe on certain products exported by South Africa.  
40. The agreement with Malawi, which is also a member of COMESA and SADC, was 
concluded in 1990.  Under the agre ement, South Africa allows duty-free imports to its market of all 
goods grown, produced or manufactured in Malawi , subject to a minimum domestic value-added 
                                                           
26 WTO document WT/REG113/N/1, 21 November 2000. 
27 The agreement applies to wines and spirits under HS headings Nos. 22.04 and 22.08. 
28 For a description of the preferential tariff  treatment for Mozambique, see WTO (1998). SACU-South Africa   WT/TPR/S/222/ZAF 
 Page 293 
 
 
of 25%.  However, preferential quotas apply to some  products, such as tea (10,000 tonnes annually).  
The agreement also contains anti- dumping and countervailing provisions. 
41. In addition to the specific agreements listed above, South African products are eligible for 
non-reciprocal preferences, including lower tariffs or preferential tariff quotas under, inter alia , the 
U.S. African Growth and Opportunity Act (AGOA), and the GSP schemes of the EC, as well as of 
Canada, Japan, Norway, Switzerland, and the United States.  
(3) INVESTMENT FRAMEWORK  
42. Much of the institutional framework governing investment in South Africa has remained 
broadly unchanged since the last TPR of SACU in 2003.  South Africa does not have a stand-alone 
investment law;  investment is governed by sector-specific legislation, which establishes the 
conditions for investment (Table AII.1). A variety of schemes provide incentives to investors.  Over 
the years, South Africa has encouraged investme nt by non-resident persons and companies.  
According to the authorities, national treatment applie s to all foreign investors, who can repatriate the 
proceeds and earnings of their investments after paym ent of taxes.  South Africa has made significant 
progress in liberalizing exch ange controls, including: 
− Offshore direct investments by companies:  the requirement that South African companies 
had to obtain a majority (i.e. over 50%) sh areholding in foreign entities and/or projects 
outside of Africa was replaced by a minimum requirement of 25%. 
− Customer foreign currency accounts:  South A frican companies involved in international 
trade are now allowed to operate a single cu stomer foreign currency (CFC) account for both 
trade in goods and services, and can use it for a wider variety of "permissible" transactions. 
− Rand currency futures:  the Johannesburg Secur ities Exchange has been granted permission to 
establish a rand currency futures market.  This will enable South African investors to 
participate directly in the currency market through a transparent and regulated domestic 
channel. 
43. Despite the ongoing liberalization, two restricti ons to foreign investment remain in place in 
South Africa:  (i) local minimum equity require ments for banks and insurance companies;  and 
(ii) businesses with non-resident ownership or control e qual to or greater than 75% are restricted as to 
the amount they may borrow from local financial markets.  In addition, a foreign bank establishing a 
branch may be required to employ a minimum number of local residents to obtain a banking licence, and to have a minimum capital base (Chapter IV(5)(ii)).  Foreign companies are also required to register as "external companies" before immova ble property can be registered in their name.
29   
44. With the exception of financial institutions, any foreign company may establish a place of 
business in South Africa, and conduct its activities without having to incorporate as a local entity.  
The establishment of a branch requires registration as an "external company" within 21 days of 
establishment of a place of business.  Additional appr oval is required for a business entity that will be 
involved in import and export activities.     
                                                           
29 A company incorporated outside South Africa is classified as  an external company and its local 
business is colloquially known as a branch.  A branch is  in most respects subject to the same regulations as a 
South African company (U.S. De partment of State, 2002). WT/TPR/S/222/ZAF Trade Policy Review 
Page 294 
 
 
 45. All foreign investors require a business perm it to establish a company in South Africa.30  The 
permit is issued to prospective investors after the Department of Home Affairs has received documentary evidence of the applicant's intention to invest in South Africa. Processing times range 
from six to eight weeks. 
46. Under the authority of DTI, Trade and Investment South Africa is in charge of promoting 
trade and investments in South Africa. TISA focuses  on activities with the greatest growth potential:  
fine and speciality chemicals, polymers, and pharma ceuticals;  minerals, and ferrous and non-ferrous 
metals;  agri-processing, meat, fruit, and vegetables;  te xtiles and clothing, and leather;  auto industry;  
technology and research;  and informat ion and communication technology.   
47. At the same time, South Africa has continued to promote outward investment, particularly in 
the SACU and SADC areas, in an effort to promot e industrialization in the region.  The Government 
is encouraging South African firms to invest regi onally through the relaxation of foreign exchange 
controls on capital destined for the region. The SADC FTA was launched in 2008, and according to 
the projections, more than 85% of intra-SADC trade would be duty free. 
                                                           
30 Nationals of the United States, European Union, and Canada do not require visas for business 
purposes. All other foreign nationals who apply for a business visa must apply through South Africa's missions abroad (Department of Tr ade and Industry, 2000).  SACU-South Africa   WT/TPR/S/222/ZAF 
 Page 295 
 
 
III. TRADE POLICIES AND PRACTICES BY MEASURE 
(1) INTRODUCTION  
48. South Africa's trade policy measures have not ch anged substantially sin ce its previous review 
in 2003.  As a member of SACU, South Africa  applies the common external tariff (CET).  
South Africa (on behalf of SACU c ountries) is in charge of initiati ng and conducting in vestigations on 
contingency trade remedies.  Certain key non-ta riff trade policy measures, such as quantitative 
restrictions, customs procedures, standards and technical regulations, sanitary and phytosanitary 
measures, public procurement, competition policy, incentives, and internal taxes, have not been 
harmonized within SACU.   
49. Import permits are maintained to administer  tariff quotas, on health, sanitary, phytosanitary, 
and environmental grounds, or under international conventions to which South Africa is a signatory.  
The government procurement system has not change d substantially, and preferences and offsetting 
requirements are still in place.  Local-content/substa ntial transformation requirements are taken into 
account when comparing tenders for government procurement purposes. 
50. South Africa still levies an export tax on unp olished diamonds.  Export levies are also 
imposed on some agricultural goods to finance activities such as advertising and research and 
development.  A number of products remain subject  to export controls, including prohibitions.  Like 
import controls, these controls are maintained on gr ounds of safety, security, and the environment. 
51. Incentives are one of South Africa's key policy instruments.  A number of investment 
incentives, including duty and tax exemptions, remain  in place to promote industrialization, develop 
export-oriented industries, and to assist SMEs and the formerly disadvantaged population.  Some are 
subject to local-content requirements and are conti ngent on export performance.  Elimination of these 
programmes could add transparency to the tariff.  
52. Government intervention through ownership continues to be important, and progress in 
restructuring state-owned enterprises has been slow despite plans to complete the restructuring by 
2004.  Three major state-owned enterprises are still operating under monopoly or hold exclusive 
rights in, inter alia , transportation and electricity.  The competition regime has not undergone 
substantial change since the previous Review .  The 2008 Competition Amendment Bill aims to 
strengthen certain provisions of the regime;  however , high levels of concentration remain present in 
the economy.  The intellectual property right s (IPR) laws remain mostly unchanged. 
(2) MEASURES DIRECTLY AFFECTING IMPORTS  
(i) Registration, import duties, and related measures 
53. Trading activities in South Africa are open to nationals and foreigne rs.  Importers (and 
exporters) in South Africa are required to register  with the South African Revenue Service (SARS) 
when the value of traded goods exceeds R 20,000.31  The registration process takes on average one 
day.  Upon registration, applicants are issued with  a customs code number, which must be entered on 
all customs declarations.  However, if required, traders may use a general code number issued by 
Customs in order to import or export immediately. 
                                                           
31 DTI online information, "Registering as an Exporter". Viewed at:  http://www.thedti.gov.za/ 
exporting/registeringasanexporter.htm [5 February 2009]. WT/TPR/S/222/ZAF Trade Policy Review 
Page 296 
 
 
 54. All required documentation (e.g. bill of lading,  commercial invoice) must be submitted with 
the customs declaration to the cu stoms offices at the port of entry before goods can be cleared.  The 
commercial invoice has to include all the necessary information for the South African Customs to 
determine the value of the imported item for duty pur poses.  A certificate and declaration of origin are 
required when preferential duties are applicable  and for goods subject to anti-dumping or 
countervailing duties.  Import permits (i.e. licences) are required in certain instances (section (ii)).  
Shipments may obtain customs clearance prior to a rrival at a South African port (as soon as they are 
loaded onto the vessel to be transported).  In th e case of sea freight, once Customs is cleared, the 
importer pays dues to Harbour Revenue and receives a wharfage order.32  The larger district customs 
offices accept electronic documentation to expedite the clearance process;  however, it must be 
accompanied by a paper version, since a paper doc ument is still regarded as the legal declaration.33  
Import clearance generally takes a maximum of 24 hour s for air freight, and two to three days for sea 
freight, depending on the port of entry.34 
55. All imports to South Africa are subject to customs duties and internal taxes including VAT;  
excise duties on, inter alia , wine, spirits, beer and other fermente d beverages, tobacco, and fuel (Main 
Report, Chapter III(3));  and levies (e.g. on certain  agricultural products, environmental levy on 
certain goods, fuel levy, and RAF levy).  The speci fic levies on certain agricultural products are 
collected at the first point of sale by the different  agricultural associations (Chapter IV(2)).  In 2004 
South Africa introduced an environmental levy of 3 cents per bag on locally manufactured and 
imported plastic carriers and flat bags (HS 3923.21.0 5, 3923.21.15, 3923.29.05 and 3923.29.15).  The 
purpose is to reduce pollution, and it is collected by SARS.35  A specific fuel levy is applied on certain 
petroleum oils and oils obtained from bituminous mine rals.  The levy is applied at the same rate on 
imported and domestic goods (Table III.1). 
Table III.1 
Fuel levy, 2009 
Products Rate  
Petrol, leaded and unleaded R 1.50/l 
Aviation kerosene (marked) Free 
Illuminating kerosene (unmarked) R 1.35/l  
Illuminating kerosene (marked) Free  
Distillate fuel (diesel) R 1.35/l  
Source:  Information provided by the South African authorities. 
56. South Africa's VAT, on domestically produced a nd imported goods and services, is imposed 
at a standard rate of 14%.  Exports36;  certain basic foodstuffs (e.g. brown bread, maize meal, eggs, 
                                                           
32 Transnet National Ports Authority determines tari ffs for services and facilities offered and publishes 
them annually in the Transnet National Ports Authority Tariff Book (Transnet online information, "Transnet 
National Ports Authority:  Tariff Adjustment with Effect  from 1 April 2009", Tariff Increase Letter and Tariff 
Schedule 01 April 2009, 26 February 2009.  Viewed at:  http://www.transnetnationalportsauthority.net).  
33 The South African Revenue Service is upgrading its technology and information systems.  Plans in 
the near future include a move to electronic data in terchange (EDI) technology to facilitate the clearance 
process.  This is expected to incr ease revenue collection, by reducing hu man error and identifying fraudulent 
invoices, through improved data dissemination. 
34 Certain goods, such as liquor products, may take longer because laboratory analysis is required. 
35 SARS online information, "Customs and Exci se:  Excise:  Industries".  Viewed at:  
http://www.sars.gov.za/home.asp?pid=4139 #Environmental [23 January 2009]. 
36 Value-Added Tax Act, 1991 Part II:  Value-Added Tax:  Zero rating.  Viewed at:  
http://www.acts.co.za/vat/inde x.htm [24 June 2009]. SACU-South Africa   WT/TPR/S/222/ZAF 
 Page 297 
 
 
milk, fruit, and vegetables)37;  certain goods used or consumed for agricultural, pastoral or other 
farming purposes (e.g. animal feed, seed, fertilizers, pesticides, and animal remedies)38;  certain fuels 
(on lighting paraffin, diesel, and gasoline), and inte rnational transport of goods and passengers are 
zero-rated.39  Goods and services exempt from VAT incl ude financial services;  donated goods or 
services or any other goods made or manufactured with donated inputs;  the supply of residential 
accommodation;  the supply of certain educationa l services;  and the supply of certain transport 
services.  The VAT is not payable on temporary imports and imports for export-processing. 
57. The VAT is levied on the "domestic open-market value" for goods and services produced in 
South Africa.40  On imports, it is levied on the duty-inclusive f.o.b. customs value (i.e. the f.o.b. 
customs value plus the amount of any non-rebated customs duty), uplifted by 10%.41  The additional 
10% is included to adjust for the customs valuation on the f.o.b. value rather  than the c.i.f. value. 
58. Imports from other SACU members enter South Africa free of customs tariffs and excise 
duties (Main Report, Chapter III(3)(v)).  Preferen tial tariffs apply to imports from SADC (Main 
Report, Chapter II(3));  and under South Africa's bilateral trade arrangements with the EC, EFTA, 
Malawi, Mozambique, and Zimbabwe (Chapter II). 
59. South Africa's duty exemption regime covers a substantial number of goods and appears to be 
cumbersome as exemptions are granted on different grounds and under several schemes.  Rebates and 
drawbacks, as well as the Motor Industry Development Programme  and the Textile and Clothing 
Industry Development Programme (TCIDP) are al so applied by the other SACU countries 
(Main Report, Chapter III;  and Chapter IV(3)).  Th e proportion of imports that entered South Africa 
under industrial customs duty rebates (i.e. Schedule 3 of the Customs and Excise Tariff Act) and 
general rebates of customs duties and fuel levies (i.e. Schedule 4 of the Customs and Excise Tariff 
Act) has decreased during the period under review (T able III.2).  However, no data are available on 
duties forgone as a result of the duty exemptions granted. 
60. Goods temporarily admitted into South Africa for processing, repair, cleaning, reconditioning 
or for the manufacture of goods exclusively for export are exempt of duties and taxes.  Goods 
temporarily admitted and then exported in the same state are also exempt of duties.  Imports may 
enter under temporary admission, including inward processing or into a bonded warehouse, for manufacturing and subsequent exportation exempt of  duties and taxes.  Goods cleared from a bonded 
warehouse for domestic consumption are subject to im port duties and other tax es.  Goods imported to 
be processed in the industrial development zones (IDZs) are also exempt from customs duties and 
taxes.  Imported goods may also be  admitted under rebate of duty for use in the Customs Controlled 
Area (CCA), bonded areas within the IDZs. 
                                                           
37 Value-Added Tax Act, 1991:  Schedule 2:  Zero Rate: Supply of goods consisting of certain 
foodstuffs:  Part B.  Viewed at:  http ://www.acts.co.za/vat/index.htm [24 June 2009]. 
38 Value-Added Tax Act, 1991Schedule 2 - Part A Zero Rate: Supply of Goods Used or Consumed for 
Agricultural, Pastoral or other Farming Purposes http://www.act s.co.za/vat/index.htm 
39 Value-Added Tax Act (Act No. 89 of 1991).  Viewed at:  http://www.sars.gov.za/LNB/MyLNB.asp 
[24 June 2009]. 
40 The open-market value is the amount the goods and/or services would generally fetch if their supply 
were freely offered, in similar circumstances, between pe rsons who are not connected persons, in South Africa 
(Section 3, Value-Added Tax Act (Act No. 89 of 1991)). 
41 VAT is calculated on:  (f.o.b customs value + the amount of customs duties)*1.10 (the uplifting 
factor).  For example, if the f.o.b. value equals 100 and the customs duty is levied at 20%, the amount of the VAT at 14% is calculated as:  on the 100(1 + 20%)(1 + 10%)*14% = 132*0.14= 18.48. WT/TPR/S/222/ZAF Trade Policy Review 
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 Table III.2 
Imports benefiting from tax and duty rebates, 2003-07  
 2003 2004 2005 2006 2007 
 (US$ million) 
Total imports 34,543.1 47,603.3 55,032.6 68,469.1 79,872.6 
Schedule 3 of the Customs and Excise Tariff Act 4,123.4 4,418.7 5,647.3 6,428.4 7,160.1 
Schedule 4 of the Customs and Excise Tariff Act 5,168.0 6,000.1 6,335.4 6,851.7 6,306.1 
 (per cent of total imports) 
Schedule 3 of the Customs and Excise Tariff Act 11.9 9.3 10.3 9.4 9.0 
Schedule 4 of the Customs and Excise Tariff Act 15.0 12.6 11.5 10.0 7.9 
Note: Schedule 3 of the Customs and Excise Tariff Act:  Industrial  Rebates of Custom Duties;  and Schedule 4 of the Customs an d 
 Excise Tariff Act:  General rebates of Customs Duties and Fuel Levies. 
Source:   WTO Secretariat estimates, based on data provided by the South African authorities. 
61. Under the Customs and Excise Act (Act No. 91 of 1964), duty rebates, in most cases of a 
100%, continue to be available for imported co mmodities used as inputs in specific industries.42  The 
Act also provides for rebates on any customs duties,  fuel levy and Road Accident Fund levy on 
specific goods imported for domestic consumption for, inter alia , diplomats (based on reciprocal 
treatment), special events such as international exhibitions, relief in cases of natural disasters and 
famines;  for manufacturing and commercial use43;  goods re-imported into South Africa;  or goods 
imported from specific countries (e.g. textiles fro m Mozambique).  South Africa also provides 
"temporary" duty rebates;  goods eligible in 2009 in clude fish and fish produc ts, sugar imported from 
non-SACU SADC "net surplus sugar producing" member states;  wheat products; tyres and 
pneumatics;  certain textiles produced and imported from the MMTZ (Malawi, Mozambique, 
Tanzania, and Zambia) of the SADC;  textiles a nd textiles articles imported for using in activities 
related to the Textile and Clothing Industry Deve lopment Programme (TCIDP); certain vehicles;  
medical or surgical instruments;  and goods used in  certain projects (e.g. the Gautrain Rapid Rail Link 
project.44 
62. A full rebate of anti-dumping duty is also possible in South Africa.45  According to the 
authorities, this is because in certain instances, due  to the tariff code description in the Customs and 
Excise Act, it is not possible to exclude specific produc ts, that are not the subject of the investigation, 
from the payment of the anti-dumping duty.  In such  instances, a rebate provision may be created for 
the specific products falling outside the scope of the anti-dumping investigation, to be rebated. 
(ii) Import prohibitions, controls, and licensing 
63. The International Trade Administration Act (A ct No. 71 of 2002) allows for the control, 
through a permit (i.e. licence ) system, of certain imports and exports as specified by regulation.  The 
                                                           
42 For a full list of goods eligible for tax rebates and the specific industries in which they must be used, 
see Schedule 3 of the Customs and Excise Act (Act No. 91 of 1964), as amended (SARS online information, 
"Legal and Policy:  Schedules to the Customs a nd Excise Acts (Tariff Books)".  Viewed at: 
http://www.sars.gov.za/home.asp?p id=2630 [2 February 2009]). 
43 These include materials for packing mineral oil products, inputs used to manufacture three-wheeled 
carriages for the use of the handicapped, base oils  to manufacture prepared lubricating oils and wetting 
agents/stickers to be used in agricultural insecticides and herbicides. 
44 See Schedule 4 of the Customs and Excise Act (Act No. 91 of 1964), as amended (SARS online 
information, "Legal and Policy:  Schedules to the Cu stoms and Excise Acts (Tariff Books)".  Viewed at: 
http://www.sars.gov.za/home.asp?p id=2630 [2 February 2009]). 
45 Schedule 4, Customs and Excise Act (Act No. 91 of 1964), as amended. SACU-South Africa   WT/TPR/S/222/ZAF 
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designation of products to be subject to li censing is left to administrative discretion.46  It is possible 
for the Government to abolish the system without  legislative approval.  The import controls are 
maintained to ensure compliance with health, envi ronmental, and safety requirements, and with the 
provisions of international agreements;  to curb competition in the domestic market by the importation 
of second-hand goods;  and to ensure that used  and second hand goods do  not erode the SACU 
manufacturing industry.47 
64. The Minister in charge of trade and industry has the power to regulate imports and exports.48  
By notice in the Gazette , import and export prohibitions and othe r controls may be prescribed on an 
ad hoc  basis.  Controls must be in accordance with  policies approved by the Minster of Trade and 
Industry.49  Prohibitions and controls may be applie d according to the goods' origin, final use, 
channels of transportation, the manner in which th ey are imported or exported, the purposes for which 
they are to be used;  or the methods or processes of  production.50 
65. The importation of most used and second-hand go ods is subject to control (i.e. requires an 
import permit or licence).  Unused items including fi sh and fish products, oils and other fossil fuels, 
inorganic acids, radio-active chemical elements, hydrocarbons, tyres, base metals, fire arms and 
ammunition, gambling machines and other miscellane ous chemicals ethers and carboxylic acids are 
also subject to import control measures (Table AIII.1).  
66. An import permit requires a written applicati on accompanied by the required additional 
information.51  Applications are considered by the International Trade and Administration 
Commission (ITAC).  Applications for some goods ar e also evaluated by other departments but the 
recommendation is issued by the ITAC (Table AIII.1). 
67. In accordance with an MOU signed with China in 2006, imports of several categories of 
textiles and clothing were restricted during 2006-08.52  The restriction was removed as scheduled. 
68. Import controls continue to be maintained in South Africa on, inter alia , security, moral, 
technical, sanitary, phytosanitary, and environmental grounds.53  Controlled imports include live 
plants and animals and products thereof;  drugs  and narcotics;  pornographic or objectionable 
materials;  uncut diamonds;  and waste and hazardous  materials.  These measures apply to all imports, 
including from other SACU countries.  
                                                           
46 WTO document G/LIC/N/3/ZAF/3/Rev.1, 20 August 2001 
47 International Trade Administration Commission of South Africa online information, "Import Control 
Regulations".  Viewed at:  http://www.itac.org.za /import_regulations_page.asp [16 January 2009] and 
International Trade Administration Commission of South Africa online information, "Export Control".  Viewed at:  http://www.itac.org.za/export_control.htm [24 June 2008]. 
48 International Trade Administration Act (Act No. 71 of 2002, Chapter 2(6)) ( Government Gazette  
No. 24287, 22 January 2003). 
49 International Trade Administration Act (Act No. 71 of 2002) ( Government Gazette  No. 24287, 
22 January 2003). 
50 International Trade Administration Act (Act No. 71 of 2002) ( Government Gazette  No. 24287, 
22 January 2003). 
51 The importer's reference number;  the name and bu siness address of the applicant;  the quantity and 
description of goods to be imported as well as their customs tariff heading and value;  the customs code number 
of the importer;  indication of whether the goods are new or used;  the port of entry;  the country of origin;  and 
units to be imported. 
52 For a full list of goods subject to import restrictions, see Schedule 10, Part 5, of the Customs and 
Excise Act (Act No. 91 of 1964), as amended. 
53 Meat Safety Act (Act No. 40 of 2000);  Fertili zers, Farm Feeds, Agricultural Remedies, and Stock 
Remedies Act (Act No. 36 of 1947);  and  Agricultural Pests Act (No. 36 of 1983). WT/TPR/S/222/ZAF Trade Policy Review 
Page 300 
 
 
 69. Fertilizers, farm feeds, agricultural remedies or stock remedies may be imported only if 
registered in South Africa and in compliance with the Fertilizers, Farm Feeds, Agricultural Remedies 
and Stock Remedies Act of 1947 (Act No. 36 of 1947).54  Imports must be of the composition and 
efficacy specified in the registration, must po ssess all chemical, physical, and other properties 
specified in the registration and must be packed in a sealed container marked or labelled in the 
prescribed manner in accordance with the regulations of the Act.55  These products must be imported 
through a prescribed port or place.  A sample might be taken for examination prior to the shipment.56  
A special permit is required for fertilizers or farm  feeds containing bone or any other substance 
derived from the carcass of an animal.57 
70. Under extraordinary circumstances (e.g. food insecurity) and taking into account 
South Africa's international obligations, the Minist er of Agriculture, Forestry and Fisheries may 
prohibit the importation of any agricultural produc t, or impose conditions with regard to the 
exportation of agricultural goods.58  Before the Minister imposes a prohibition the Council must 
publish a notice, setting out details of the proposed prohibition and an explanation in the Gazette  and 
any magazines and newspapers necess ary to bring the proposed prohibition to the attention of directly 
affected groups, and invite them to lodge any obj ections within a specified period.  However, this 
provision has not been used since the promulgation of the Act in 1996. 
71. In general, South Africa does not apply import quotas.  Quantitative restrictions apply only to 
used goods;  goods controlled under the Montreal Protocol;  and under the 1998 Convention against chemicals used in illegal drug manufacturing, the B asel Convention.  All these goods are also subject 
to import permit/licence.
59   
72. Tariff quotas (TQs) apply to agricultural products , and to textiles and clothing.  TQs on 
agricultural products are administered through import permits issued by the Department of 
Agriculture on a quarterly or bi-annual basis and a pplicants need to registered with SARS and the 
DTI.  Most quotas (70%) are allocated on a historic al basis,  20% are allocated to SMEs and new 
importers;  and 10% to BEE importers (i.e. comp anies that qualify under the Broad-Based Black 
Economic Empowerment Act (Act No. 53 of 2003)).  However, many TQs have not been used since 
the out-of-quota tariff rates on certain products ha ve been less than the in-quota tariff rate 
(Table III.3). 
73. South Africa only applies trade sanctions endor sed by the United Nations (UN) Security 
Council, the African Union (AU), or the Southern African Development Community (SADC).  The 
restrictions include those dictated by internationa l conventions to which South Africa is a signatory, 
for example on ivory, under the Convention on Inte rnational Trade in Endangered Species of Wild 
Fauna and Flora (CITES). 
                                                           
54  NDA online information.  Viewed at:  http://www.nda.agric.za/Act36/main.htm [24 June 2009]. 
55 Fertilizers, Farm Feeds, Agricultural Remedies and Stock Remedies Act of 1947 (Act No. 36 of 
1947).  Viewed at:  http://www.nda.agric.za/Act36/ma in.htm [24.06.2009]. Labelling requirements for the 
Registration of Stock Remedies under Fertilizers, Farm feeds, Agricultural Remedies and Stock Remedies Act, 
1947 (Act No. 36 of 1947).  Viewed at:  http://www.nda.agric.za/Act36/Stocks/labelreq.pdf [25 June 2009]. 
56 Fertilizers, Farm Feeds, Agricultural Remedies, an d Stock Remedies Act (Act No. 36 of 1947), as 
amended. 
57 Fertilizers, Farm Feeds, Agricultural Remedies, an d Stock Remedies Act (Act No. 36 of 1947), as 
amended. 
58 Paragraph 22 of the Marketing of Agricultural Products Act (Act No. 47 of 1996).  Viewed at:  
http://www.info.gov.za/gaze tte/acts/1996/a47-96.htm. 
59 WTO document G/LIC/N/3/ZAF/3/Rev.1, 20 August 2001. SACU-South Africa   WT/TPR/S/222/ZAF 
 Page 301 
 
 
Table III.3 
Tariff quotas, 2007 
Tariff rates 2008 Fill ratio (%) HS code  Product description 
In-quota (%)  Out-of-quota (% or cents)  Quota 
commitment  2006  2007 
0201 and 
0202 Meat of bovine 
animals 13.8;  32 40% or 240c/kg 26,254 92.3 84.4  
0203 Meat of swine 7.4 0%;  15% or 130c/kg 4,691 100.0 100.0 
0204 Meat of sheep 13.2;  16.4;  19 40% or 200c/kg 6,002 99.2 98.0 
0206 Edible offal 7.6 0%;  22% or 240c/kg;  30% 
or 130c/kg 2,544 100.0 100.0 
0207 Meat and edible offal 
of poultry 7.4;  16.4 0%;  5%;  27%;  220c/kg 29,033 100.0 100.0 
0401 Milk and cream fresh 19.2 0% 53,657 9.2 25.8 
0402 Milk powder 19.2 450c/kg (max. 96%) 4,470 86.8 35.3 
0403 Buttermilk and 
yoghurt 19.2 0%;  450c/kg (max. 96%) 213 100.0 71.0 
0404 Whey 19.2 450c/kg (max. 96%) 2,786 100.0 100.0 
0405 Butter 15.8 500c/kg (max. 79%) 1,167 48.0 19.4 
0406 Cheese 19 500c/kg (max. 95%) 1,989 53.4 36.5 
0407 and 
0408 Eggs 3.8 0%;  19% 9,000 7.9 9.0 
0701 Potatoes 9.8 0.44c/kg 48,161 0.2 0.02 
070520 Chickory, fresh 6 0% 4 12.5 50.0 
0708 Peas and beans, fresh 4.8 ; 6.6 0%;  15% 263 100.0 100.0 
0710 Vegetables, frozen 4.8 ; 6.6 ; 7.4 ; 9.8 0%;  10%;  20%;  24%;  30% 583 81.5 83.7 
0712 Dried vegetables 7.4 20%;  4c/kg 860 33.0 32.0 
071320 and 
071390 Dried peas 4.8 ; 6.6 0%;  15%;  24% 5,184 31.6 37.0 
071330 Dried beans 4.8 10%;  15% 11,063 69.5 90.0 
071340 Lentils 9.8 0% 1,601 100.0 100.0 
080620 Grapes, dried 4.6 10% 397 100.0 23.7 
0813 Dried fruit 6;  6.6;  8.8;  10.8;  14 10% 349 100.0 100.0 
0901 Coffee 23.8 0%;  20%;  6c/kg;  10c/kg 15,746 100.0 100.0 
0902 Tea 34 0%;  400c/kg 11,375 100.0 100.0 
1001 ex 
1100 Wheat or wheat 
equivalent 4.2;  14.4;  19.8 0%;  2%;  20% 108,279 100.0 100.0 
1002 Rye 4.2 0% 83 100.0 51.8 
1003 Barley 8.2 0% 14,552 100.0 100.0 
ex 1100 Barley equivalent 8.2 0% 96,248 62.1 73.5 
1004 ex 
1100 Oats or oats equivalent 6.6;  19.8 0%;  2.75c/kg 7,333 100.0 100.0 
1005 ex 
1100 Maize or maize 
equivalent 8.6;  10;  19.8 0%;  5% 269,000 100.0 100.0 
1007 Grain sorghum 6.6 3% 21,116 70.1 100.0 
1008 Other cereals 6.6;  8.6 0% ; 3% ; 5% 145 100.0 100.0 
1201 Soya beans 8 8% 1,717 100.0 100.0 
1202 Groundnuts 14 10% 7,908 100.0 100.0 
1204 Linseed 9.4 9.4% 202 100.0 100.0 
1205 Rapeseed 8.0 10% 871 13.7 22.5 
1206 Sunflower seed 9.4 9.4% 14,514 7.1 34.2 
120921 Lucerne seed 5.0 0% 576 60.9 41.5 
1507, 1508,  
1510-1515 Vegetable oils 9.8;  12.2;  13.4;  16.2 0% ; 9.8% ; 10% 61,083 100.0 100.0 
1701 Sugar 21 6c/kg 62,037 100.0 100.0 
Table III.3 (cont'd) WT/TPR/S/222/ZAF Trade Policy Review 
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 Tariff rates 2008 Fill ratio (%) HS code  Product description 
In-quota (%)  Out-of-quota (% or cents)  Quota 
commitment  2006  2007 
1702 Other sugars 13.6 0% 6,391 100.0 100.0 
1703 Molasses 13.6 0% 34,533 100.0 100.0 
1901 Malt extracts 7.4;  19.2;  19.8 20%;  10% or 55c/kg less 
90% 6,119 28.6 22.3 
1902 Pasta 10.8 20%;  30%;  3c/kg;  5.5c/kg 1,749 88.6 84.2 
1903 Tapioca 8.6 0% 5,448 21.3 15.7 
2008 Preserved fruit and 
nuts 0;  6.6;  7.4; 8.6;  12;  
14 0%;  5%;  20%;  55%;  
0.99c/kg 1,636 100.0 100.0 
2106 Food preparations 7.4 0%;  5%;  10%;  20%;  
154c/li 3,109 82.8 71.0 
2204-2208 Wine and spirits (LI) 13.4;  14.6; 19.6;  
24.2;  119.4 25%;  136c/li;  154c/li;  
317c/li of absolute alcohol 9,572,405 100.0 100.0 
2209 Vinegar (LI) 14.6 5c/li 15,000 100.0 100.0 
2303 Corn gluten feed 8.6 0% 3,960 100.0 100.0 
2304-23.06 Oil-cake 6.6 6.6% 120,667 100.0 100.0 
2401 Tobacco 8.8 77c/kg;  15% or 860c/kg less 
85%;  860c/kg less 85% (max. 44%) 16,773 100.0 64.7 
5201 Cotton 12 0%;  15%;  160c/kg 17,101 100.0 100.0 
Source : Data provided by the Sout h African authorities.   
(iii) Local-content requirements 
74. Local-content and substantial transformation requi rements are an integral part of some of 
South Africa trade policies;  they are used as an  instrument of industrial policy to encourage 
investment, especially from overseas, and produc tion of certain goods, including by SMEs.  
Local-content considerations are taken into account when, inter alia , comparing tenders for 
government procurement purposes (section (v) below) ;  granting some incentives (section (4)(i));  
providing export credit insurance (section (3)(iv));  and using the "Proudly South Africa" logo (section (iv) below). 
(iv) Standards and other technical requirements  
(a) Standardization, testing, and certification 
75. Under the new Standards Act (Act No. 8 of 200 8), the South African Bureau of Standards 
(SABS) continues to operate as a public entity un der the DTI.  The Act recognizes the SABS as the 
primary institution responsible for the development,  promotion, and maintenance of standardization, 
and the provision of conformity assessment services .  However, the regulatory function previously 
performed by the SABS now resides with the newl y established National Regulator for Compulsory 
Specifications (NRCS).   
76. The NRCS was established under the National Re gulator for Compulsory Specifications Act 
(NRCS Act) of 2008 to administer compulsory sp ecifications.  This Act also provides the legal 
framework for the administration of technical regulati ons, maintained in the interests of public safety, 
health, and the environment.
60  
                                                           
60 National Regulator for Compulsory Specifications Act (Act No. 5 of 2008). SACU-South Africa   WT/TPR/S/222/ZAF 
 Page 303 
 
 
77. The Agricultural Product Standards Amendment Ac t (Act No. 63 of 1998) is the main law 
regulating the setting of standards for agricultural pro ducts.  Standards are set in consultation with the 
agriculture sector, consumer groups, and interna tional standards-setting bodies (e.g. the FAO/WHO 
Codex Alimentarius Commission,  and various special advisory commissions under the World 
Organization for Animal Health (OIE)).  A South A frican national standard in  respect of a product or 
service under the jurisdiction of the Agricultural Product Standards Act, 1990, or the Liquor Products 
Act, 1989, can be set or amended following an agre ement between the SABS Board and the director-
general of the department responsible for agriculture. 
78. The SABS has the power to set, issue, amend, a nd withdraw standards.  SABS also furnishes 
reports and issues certificates in connection with ex aminations, tests, analyses, calibrations, and any 
other assessments.  The SABS may levy fees for setting and issuing a standard and for services 
rendered in connection with the provis ion of conformity assessment services. 
79. The SABS develops and maintains South African national standards (SANS), at the request of 
interested parties, and details the process to be used  to set or amend them.  The SABS must as far as 
possible ensure that, in setting or amending a S ANS the latest technological developments are 
considered;  and that the interests of all parti es concerned, including manufacturers, suppliers and 
consumers, are considered.  Standards generally co mply with internationally accepted norms.  As the 
first option South Africa reviews applicable intern ational standards for adoption as the basis for a 
standard and/or technical regulations.  Hence,  as far as possible SANS are harmonized with 
international standards.  There are over 440 techni cal committees and subcommittees administered by 
the SABS to develop standards. 
80. South African national standards are drafted by technical committees (TCs), which prepare 
one or more working drafts. A committee draft (C D) is presented to the TC, which starts a 
consensus-building process entailing comments and voting.  On acceptance of the CD, a draft 
South African standard (DSS) is made available for public comment, nationally and internationally 
(public enquiry stage);  the comment period is 60 days.  The comments are discussed by the 
committees and, through a consensus, in corporated into the standard prio r to finalization.  The draft is 
forwarded to the Standards Approvals Committee (SAC ) for ratification.  Standards are published in 
the Government Gazette as national standards.61  
81. South African national standards may be appeal ed, and there is a procedure for resolving 
disputes.  Appeals must be lodged in writing, within ten working days of the decision, stating clearly 
the technical grounds on which the appeal is made.62  Any decision by the CEO of SABS concerning 
an appeal in respect of a standard is final and is reported to the Board of the SABS. 
82. Technical regulations are set for health, safet y, and environmental reasons.  A standard 
becomes a technical regulation once "referenced", and any department may make a "reference".  Various national departments are respons ible developing technical regulations.
63 
                                                           
61 SABS online information, "Latest Draft Standa rds".  Viewed at:  h ttps://www.sab s.co.za:/ 
Business_Units/Standards_SA/CatalogueAndInfo/LatestDraft.aspx [4 March 2009].  Government Gazette  
(1993-09).  Viewed at:  http://www.inf o.gov.za/view/DynamicAction?pageid=530. 
62 An appeal against a subcommittee decision or a ruling by the chairperson of a subcommittee is 
lodged with the chai rperson of the technical commi ttee. An appeal against a t echnical committee decision is 
lodged with the chai rperson of the Standards Appr oval Committee.  An appeal  against a decision by the 
chairperson of the Standards Ap proval Committee must be lodged with the CEO of the SABS. 
63 These departments are the National Department of Agriculture (DoA), Department of Health (Doh), 
Department of Labour (DoL), Department of Minerals and Energy (DME), Department of Water Affairs and WT/TPR/S/222/ZAF Trade Policy Review 
Page 304 
 
 
 83. The development of technical regulations , and inspection and enforcement are the 
responsibility of different government departme nts depending on subject of the regulation 
(Table III.4).  Various institutions are responsible  for setting technical regulations, including the 
South African Bureau of Standards (SABS);  the South African National Accreditation System 
(SANAS)64;  the National Metrology Institute of South Africa (NMISA), which is responsible for the 
maintenance, traceability, and disseminati on of national measurement standards65;  and a wide range 
of accredited bodies including laboratories, and verification, certification, and inspection bodies.  National departments use a consultation process when technical regulations are developed but there is 
no consistent national approach.  As there is no coordinated system for establishing a technical 
regulation, there appear to be some gaps as well as areas of overlap between national departments.  In 
addition the regulatory system is fragmented, w ith myriad laws regulating the process of setting 
technical regulations (Table III.4).  Thus, access to information on existing and proposed technical 
regulations can be difficult, rendering the system unpredictable and unclear.
66 
Table III.4 
Technical regulations, 2009 
Department Legislation Products 
Agriculture   
 Fertilizers, Farm Feeds, Agricultural Remedies, and 
Stock Remedies Act (Act No. 36 of 1947) Agricultural remedies, stock remedies, farm feeds, and 
fertilizers 
 Agricultural Product Standards Act (Act No. 119 of 
1990) Meat Safety Act (Act No. 40 of 2000) 
 
Liquor Products Act (Act No. 60 of 1989) Fruit, vegetables, flowers, red meat, and poultry, dairy 
products, grains, processed fruits and vegetables, 
organically produced products, fresh (raw) meat 
Wines, spirits, brandies, whiskies, sacremental liquor, 
sparkling wines, fortified wi nes, cream liquor, and certain 
ciders 
 Genetically Modified Organisms Act (Act No. 15 of 
1997)  GM agricultural crops, plants, and animals 
 Agricultural Pests Act, 1983 (Act No. 36 of 1983) Fru it and vegetables, plants, pathogens, insects, exotic 
animals (as defined in the Act) , growth mediums, infectious 
items, honey, beeswax and used apiary equipment, and vegetative materials of all fr uits and ornamental plants 
 Plant Animal Improvement Act (Act No. 53 of 1976) 
Plant Breeders' Rights Ac t (Act No. 15 of 1976) 
Animal Diseases Act, 1984 (Act No. 35 of 1984) Plant animal genetic material 
Any animal, animal product (i ncluding meat), parasite, 
contaminated or infectious thing 
Health   
 Health Act (Act No. 63 of 1977) 
Foodstuffs, Cosmetics and Disinfectants Act (Act No. 54 of 1972) Foodstuffs, food labels, food premises, food irradiation, 
food biotechnology and toxicology, food additives and contaminants, and safety of street foods 
 Hazardous Substances Act (Act No. 15 of 1973) 
International Health Regulations Act (Act No. 28 of 1974) Ionising radiation products and non-ionising radiation 
products (e.g. certain electronic products, radioactive materials, and radio nuclides) 
Medical devices (active electro-magnetic and passive), 
hazardous, and radio-active substances 
 Medicines and Related Substances Control Act (Act 
No. 101 of 1965) Medicines and medical devices 
Food, water, and hazardous by-products 
Table III.4 (cont'd) 
                                                                                                                                                                     
Forestry (DWAF), Department of Environmental Affairs and Tourism (DEAT), Department of Housing (DoH), 
Department of Transport (DoT), Department of Communications (DoC), and Department of Trade and Industry 
(the DTI). 
64 Accreditation for Conformity Assessment, Ca libration, and Good Laboratory Practice Act 
(Act No. 19 of 2006). 
65 Measurement Units and Measurement St andards Act (Act No. 18 of 2006).  
66 Government of South Africa (2008);  and Department of Trade and Industry (undated b). SACU-South Africa   WT/TPR/S/222/ZAF 
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Department Legislation Products 
Labour   
 Occupational Health and Sa fety Act (Act No. 85 of 
1993) Products at workplace (e.g. driven machinery, general 
machinery, electrical, vessels  under pressure, and chemical 
substances) 
Explosives and major hazard in stallations and construction 
work 
Water Affairs and Forestry   
 National Water Act (Act No. 36 of 1998) 
Water Services Act (Act No. 108 of 1997) Water 
Environmental Affairs and Tourism   
 National Environmental Ma nagement Act (Act No. 107 
of 1998) Plastic bags, waste-tyres, and asbestos products 
 National Environmental Management Air Quality Act 
(Act No. 39 of 2004) Ambient air quality standards 
Source emission standards 
 National Environmental Management Protected Areas 
(Act No. 57 of 2003 as amended) Management of national protected areas 
Restricts activities that can be conducted in protected areas 
such as mining 
 National Environment Mana gement Biodiversity Act 
(Act No. 10 of 2004) Ensures equitable and sustainable use of natural resources to 
contribute to economic development;  trade and use of 
threatened and protected species, access and benefit sharing  
Draft regulations for international trade in wild fauna and flora cover the import and export of alien species 
Transport   
 Merchant Shipping Act (Act No. 57 of 1951) 
South African Maritime Safety Authority Act (Act No. 5 of 1998) Sea-going vessels, small craft, leisure craft, navigational 
aids, buoys for use at sea, breakwater obstacles, maritime safety equipment, safety vests, vessel/personal position 
distress signalling units, radio communications equipment, 
and vessel traffic systems 
 Aviation Act (Act No. 74 of 1962) Aircraft and avionics equipment 
Dangerous goods packaging, packaged goods vehicles, 
tankers, etc. 
 National Road Traffic Act (Act No. 93 of 1996) Safe ty, health, and environment aspects of transport of 
dangerous goods by roads 
 National Railway Safety Regulator (Act No. 16 of 
2002) Safety, health, and environmental aspects of transport of 
dangerous goods by rail 
Trade and Industry   
 Standards Act (Act No. 29 of 1993) Automo tive products, food, electrical and electronic 
equipment, and personal protective items 
 Trade Metrology Act (Act No. 77 of 1973) Measuri ng instruments, and marking of packaging with 
prescribed mass and volume 
 National Building Regulati ons and Building Standards 
Act (Act No. 103 of 1977) Building and building products 
 Gambling Act (Act No. 7 of 2004) Gaming equipment 
 Liquor Act (Act No. 59 of 2003) Liquor products 
Source: Information provided by the South African authorities.  
84. Technical regulations are applied equally to domestic and imported products.  An imported 
commodity that is subject to a technical regulation would be deemed to comply if it has been certified 
by a person or organization recognized by the Minister of Trade and Industry by notice in the  Gazette .  
In the absence of certification, the import may be tested or examined and, if found not to be in 
compliance with the regulation, may be destroyed.67  The SABS may examine, test or analyse a 
sample of any imported or domestically produced artic le to determine whether it complies with or has 
been manufactured in accordance with the requirements. 
                                                           
67 Section 23 of the Standards Act gives SABS the authority to ensure that products subject to 
compulsory South African specifications comply with these requirements.  WT/TPR/S/222/ZAF Trade Policy Review 
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 85. South African National Accreditation System (SA NAS) is in charge of accreditation, quality 
assessment, and calibration;  it is responsible fo r formally recognizing the technical competence of 
conformity assessment services providers.  S ANAS operates an internationally recognized 
accreditation system for calibration and testing labor atories, quality and environmental management 
systems, and product and personnel certification and in spection.  It is the authority responsible for 
good laboratory practices.  SANAS has mutual recognition agreements with foreign accreditation agencies;  in the absence of an MRA, the supplier is responsible for proving the compatibility of its 
products with the SANS.  
(b) Sanitary and phytosanitary regulations 
86. The Department of Agriculture sets and enfo rces sanitary and phyto sanitary standards for 
agricultural and animal products.
68  The Department is also in charge of implementing inspection and 
certification requirments.  Sa nitary and phytosanitary standards are published in the Gazette according 
to the product regulated.69  
87. Several laws regulate the setting of sanitary an d phytosanitary measures (Table III.5).  The 
Agricultural Pests Act (Act No. 36 of 1983) provides for, inter alia , quality control, control over sales 
of imported products, and the charging of certain fees;  it also regulates powers of entry, investigation, 
sampling, and seizure.  The purpose of the Act is to  control imports of plants, plant products, and 
other regulated articles to prevent associated pests and diseases.  The Meat Safety Act (Act No. 40 of 
2000) promotes meat safety and the safety of animal products70, establishes and maintains essential 
national standards in respect of abattoirs, regulat es the import and export of  meat, and establishes 
meat safety schemes, which may be made compulsory.  The Fertilizers, Farm Feeds, Agricultural 
Remedies, and Stock Remedies Act (Act No. 36 of  1947) as amended, covers  the registration of 
fertilizers, farm feeds, agricultural remedies, st ock remedies, sterilizing plants, and pest control 
operators;  and regulates or prohibits the import, sale,  acquisition, disposal or use of fertilizers, farm 
feeds, agricultural remedies, and stock remedies. The Animal Disease Act (Act No. 35 of 1984) provides for the control of animal diseases and parasites to promote animal health. 
Table III.5 
Phytosanitary regime, 2009 
Act/regulation Product or activi ty  Responsible directorate 
Agricultural Pests Act, 1983 (Act No. 36 of 
1983)a Development and issuance of phytosanitary 
regulations  Directorate Plant Health  
 Pest risk assessment (PRA) and import permits Directorate Plant Health 
 Surveillance (early warning systems for quarantine 
pests) Directorate Plant Health 
 Pest-free areas and areas of low pest prevalence: 
maintenance and surveillance Directorate Plant Health 
 Diagnostic services (plant pests) Directorate Plant Health 
 Quarantine services (plants and plant propagation 
material) Directorate Plant Health 
 Phytosanitary awareness and informati on exchange Directorate Plant Health 
 Phytosanitary inspection and certifica tion services Directorate Agricultural 
Product Inspection Services 
Table III.5 (cont'd) 
                                                           
68 National Department of Agriculture online information.  Viewed at:  http://www.nda.agric.za;  and 
National Department of Health online informa tion.  Viewed at:  http://www.doh.gov.za   
69 South African Government Information online, "Documents:  All documents by subject:  
Agriculture".  Viewed at:  http://www.info.gov.za/ view/DynamicAction?pageid=606 [10 March 2009]. 
70 Repeals the Abattoir Hygiene Act (Act No. 121 of 1992), except for its Section 23. SACU-South Africa   WT/TPR/S/222/ZAF 
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Act/regulation Product or activi ty  Responsible directorate 
 Disinfestation or disinfection of consignments Directorate Agricultural 
Product Inspection Services  
 Migratory pests (e.g. locusts) Directorate Land Use and 
Soil Management 
Government Notice R.1013 of 26 May 1989, 
last amended by R.1058 of 27 October 2006 Importation of controlled goods without a permit  Directorate Plant Health 
Government Notice R.110 of 27 January 1984 
with amendments, last amended by R. 258 of 
13 March 2009 Control measures relating to maintenance of pest-free 
areas and areas of low pest prevalence to control the 
national spread of pests and diseases associated with 
plants, plant products and other regulated articles. Directorate Plant Health 
Government Notice R.1902 of 12 September 
1986, amended by R.1780 of 21 August 1987 Control measures relating to cotton  Directorate Plant Health 
Government Notice R.458 of 12 May 2000 
 
Government Notice R.1674 of December 1998 Control measures relating to honey bees (movement 
of honey bees to and from Robben Island) 
Control measures relating to honey bees Directorate Plant Health 
 
Directorate Plant Health  
Government Notice R.111 of 27 January 1984 
with amendments, last amended by R.257 of 
13 March 2009 Regulations on imports of plants and plant products, 
and applicable tariffs Directorate Plant Health 
a The Act provides measures to prevent and control imports of plan t pests, and for their national c ontrol.  It covers plants, p lant 
products, and their pathogens, and includes biological control agents, insects, other organisms imported for research purposes,  
growth media, honey, beeswax, used apiary equipment, and e xotic animals as well as migratory pests such as locusts.  
Source:  Information provided by the South African authorities.  
88. The Liquor Products Amendment Act (Act No. 11 of 1993) regulates the production, sale, 
import and export of cer tain alcoholic products71, and the composition and properties of such 
products.  It establishes schemes to regulate partic ular production matters, including origin schemes 
and environmentally friendly wine production.  The Tobacco Products Control Amendment Act 
(Act No. 12 of 1999)72 sets out maximum yields of tar, nicotine, and other constituents in tobacco 
products. 
89. All imported food products, including from other SACU countries, must meet South Africa's 
sanitary and phytosanitary, quality, and labelling re quirements.  Responsibility for compliance with 
the regulations rests with the South African impo rter.  Sanitary and phytosanitary measures in 
South Africa are based on international standa rds;  however, SPS requirements on agricultural 
products appear stringent, since most agricultural go ods are subject to quality standards (Table III.6) 
or technical regulations.  As at March 2009, ther e were some 60 technical regulations on foodstuffs 
(Table AIII.2).  In accordance with the Animal Diseases Act, (Act 35 of 1984), the import of any 
animal and animal product (incl uding meat), is prohibited where the risk of importing has been 
determined to be unacceptable.  The Minister may also prohibit the sale of any imported product if it 
was removed from the port of entry prior to verification of compliance.73 
90. A permit is required to import meat.74  The permit may only be issued if meat is imported 
from a place approved by the national executive officer by notice in the Gazette .75  Importers of meat 
                                                           
71 Alcoholic products are, inter alia , wine, alcoholic fruit beverage, spirits, a grape-based liquor, a 
spirit-based liquor or a "specially authorized liquor". 
72 Amends the Tobacco Products Control Act (Act No. 83 of 1993). 
73 Agricultural Products Standards (Act No. 119 of 199 0) also referred to as  the Agricultural Product 
Standards Amendment Act (Act No. 63 of 1998). 
74 Meat Safety Act (Act No. 40 of 2000) and th e Animal Diseases Act (Act No. 35 of 1984).  
Schedule 1 of the Meat Safety Act lists the animals to which the Act applies. 
75 However, according to the authorities, this will chan ge because the Meat Safety Act of 2000 is being 
amendment.  Once the Act is amended South Africa will a ccept certification from the ab attoirs of th e country of 
origin. WT/TPR/S/222/ZAF Trade Policy Review 
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 must obtain the permit (valid for one consignment), before a consignment arrives in South Africa.  
Shipments may be off-loaded at the port of entry if all the conditions specified in the permit have been 
fulfilled.76  Meat must be stored at an approved fac ility until the prescribed veterinary procedures are 
performed, and the meat is inspected, sampled, and/or tested.77  These procedures vary according to 
the origin of the meat.  The executive officer might  in the "public interest" suspend or withdraw a 
permit, or impose new or additi onal conditions to a permit.  South Africa also has technical 
regulations relating to the manufacture, productio n, processing, and treatment of canned meat 
products. 
Table III.6 
Standards on agricultural productsa, 2009  
Product Applies on 
Animal products  
Dairy products Domestic sale and export 
Eggs Domestic sale and export 
Imitation dairy products Do mestic sale and export 
Meat  Domestic sale and exportb 
Mohair Domestic sale and export 
Poultry meat Domestic sale and export 
Processed products  
Apricot and peach kernels Export 
Canned fruit Domestic sale and export 
Canned mushrooms Domestic sale and export 
Canned pasta  Domestic sale and export 
Canned vegetables Dome stic sale and export 
Dehydrated vegetables Domestic sale and export 
Dried fruit Domestic sale and export 
Fat spreads Domestic sale and export 
Frozen fruit and vegetables  Domestic sale and export 
Fruit juices and drinks Domestic sale and export 
Honey Domestic sale and export 
Honey bush and green honey bush Export 
Jam, jelly, and marmalade Domestic sale and export 
Mayonnaise and salad dressing Domestic sale and export 
Organically produced products Domestic sale  and export 
Rooibos tea Domestic salec and export 
Vinegar Domestic sale and export 
Deciduous fruit  
Apples Domestic sale and export 
Apricots Export 
Cherries Export 
Grapes (table) Domestic sale and export 
Peaches and nectarines Domestic sale and export 
Pears Domestic sale and export 
Plums and prunes Domestic sale and export 
Table III.6 (cont'd)
                                                           
76 The import permit stipulates the port of entry and the period when the meat should be imported;  
meat must be stored in the prescribed manner at a facility approved by the national executive officer until the veterinary procedures or other acts specified in the permit have been performed; and must be available for 
inspection, sampling, and testing by the national executive officer as required. 
77 Schedule 1 of the Act lists all the animals to wh ich the Act applies.  The list includes domestic 
animals and game (Meat Safety Act (Act No. 40 of 2000)).  SACU-South Africa   WT/TPR/S/222/ZAF 
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Product Applies on 
Subtropical crops and flowers  
Avocados Domestic sale and export 
Chinkerinchees Export 
Citrus fruit Domestic sale and export 
Flowers Export 
Fresh cut flowers and fresh ornamental foliage Export 
Granadillas Export 
Green bananas Domestic sale and exports 
Kiwifruit Export 
Litchis Export 
Mangoes Export 
Melons and watermelons Export 
Pineapples Export 
Strawberries Export 
Subtropical fruit Export 
Cereals and vegetables    
Buckwheat Export 
Dry beans Domestic sale and export 
Feed products Export 
Fresh vegetables Domestic sale and export 
Food safety and hygiene Export 
Garlic Domestic sale 
Grain sorghum Export 
Grass seeds Export 
Groundnuts Domestic sale and export 
Leguminous seeds Export 
Lesser known types of maize Export 
Maize Domestic sale and export 
Maize products Domestic sale and export 
Oilseeds Export 
Onions Domestic sale and export 
Popcorn Export 
Potatoes Domestic sale and export 
Sorghum Domestic sale and export 
Soya bean Domestic sale and export 
Sunflower Domestic sale 
Tobacco Export 
Tomatoes Domestic sale 
Vegetables (other than potatoes and onions) Export 
Wheat Domestic sale and export 
Wheat products Domestic sale 
Liquor products  
All liquor products (excl. beer and so rghum beer) Domestic sale and export 
a Standards relating to quality, gr ading, packing, and marking. 
b Only to certain countries. 
c Only draft. 
Source:  South African Government Information online, "Docum ents:  All documents by subject:  Agriculture".  
 Viewed at:  http://www.info.gov.za [5 March 2009]; and inform ation provided by the S outh African authorities.  
91. The Agricultural Pests Act, 1983 (Act No. 36 of  1983) provides for importation, by means of 
a permit or following publication in the Government Gazette , of controlled goods such as plants and 
plant products, pathogens, insects, e xotic animals, and growth mediums.78  The importation of such 
                                                           
78 The Agricultural Pests Act (Act No. 36 of 1983) also referred to as Agricultural Pests Amendment 
Act (Act No. 9 of 1992).  WT/TPR/S/222/ZAF Trade Policy Review 
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 goods may also be subject to specific phytosanita ry conditions as indicated on the permit or as 
published in the Government Gazette .  These import controls are aimed at preventing and combating 
the spread of agricultural pests.  Imports of cont rolled goods must be through a specified port of entry 
so that controls may be enforced;  controls may en tail the destruction or cleansing of plants infected 
with pathogens or insects.  The list of goods subject to import permits  on SPS grounds is under 
continuous review by the Department of Agriculture  to reflect changes in disease status.  Listed goods 
that are subject to import permits on SPS grounds have been determined based on a sanitary or 
phytosanitary risk-assessment procedure.  When ne w scientific information becomes available, risk 
assessments are carried out to determine whether import requirements need to be amended. 
92. Imports (exports) of alcoholic beve rages with an alcoholic content of more than 1% with the 
exception of beer, sorghum beer, and medicine require an import (or export) certificate.79 
93. Under the Animal Disease Act (Act No. 35 of  1984) any animal, animal product (including 
meat), parasite, contaminated or infectious th ing may only be imported into South Africa after a 
permit and a veterinary certificate have been issued , and the conditions stipulated in both documents 
have been complied with.  The conditions stipulated  on the permit and veterinary health certificates 
vary according to the risk of importing the different  commodities from individual exporting countries.  
The decision on whether to issue these documents  is based on information provided by World 
Organisation for Animal Health (OIE), informa tion received from the exporting country, as well as 
the risk assessment outcome.  The permit defines the "place of entry" and the period within which the 
importation is to take place.  The Minister may s tipulate general or particular control measures in 
respect of a particular animal disease and/or parasite.  Controls might cover the whole of South Africa 
or a defined area.  Control measures may include:   examinations of animals presumed infected;  
restrictions on and control of the slaughtering, k illing, hunting, and catching, and the movement and 
removal of animals, over, from, and to land where an animal disease or parasite occurs or is suspected to be present;  decontamination;  and/or the construction of fences 
94. In accordance with the Fertilizers, Farm Feed s, Agricultural Remedies and Stock Remedies 
Act (Act No. 36 of 1947) as amended, imports of fertilizers, farm feeds, agricultural remedies and 
stock remedies are prohibited unless registered.  The manufacture and sale of fertilizers and farm feeds containing substances derived from animal  carcasses are prohibited, unless the bone or 
substance has been sterilized.  
95. Any product subject to SPS regulations may be s ubject to inspection (including grading and 
sampling) to verify compliance with regulations;  th e control may be done at any point.  In case of 
non-compliance products may be seized and criminal  proceedings may be instituted.  However, 
appeals are possible under the various laws.
80 
96. South Africa's National Drug Policy stipulates the introduction of a five-year re-licensing 
system for drugs, computerization of the evaluation system, prioritization of registration based on 
need, and fast-track procedures for essential drugs.  Drugs and medicines must be registered in 
South Africa before import and sale.  Import controls are also applied to medicines, mainly to ensure 
compliance with the existing standards. 
                                                           
79 Liquor Products Amendment Act (Act No. 11 of 1993). 
80 Agricultural Products Standards Act (Act No.119 of 1990) also referred to as the Agricultural 
Product Standards Amendment Act (Act No.63 of 1998);  and Agricultural Pests Act (Act No. 36 of 1983) also referred to as the Agricultural Pests Amendment Act (Act No. 9 of 1992).  SACU-South Africa   WT/TPR/S/222/ZAF 
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97. The regulatory framework governing the use of GMOs in South Africa is the 1997 
Genetically Modified Organisms Act (Act No. 15 of 1997).81  The Act regulates all activities 
involving the use of GMOs (including import, produc tion, export, transit, development, release, 
distribution, contained use, storage, and applicatio n), to ensure that all activities are carried out in 
such a way that possible harmful consequences to the environment and to human and animal health 
are limited, accidents are prevented, and waste is  managed in an effective manner.  It establishes 
common measures for evaluating and reducing poten tial risks involved in using GMOs, and lays 
down the requirements and criteria for risk assessment s.  The Act also establishes a council for GMOs 
to ensure that GMOs are appropriate and do not re present an environmental hazard, and procedures to 
notify activities that entail the use of GMOs.  
98. The Act was amended in 2006 (but is s till called the GMO Act, 1997).  The main 
amendments included changes to the scope of the Ac t to include exports of GMOs;  consistency with 
the provisions of the Cartagena Protocol on Biosaf ety (ratified by South Africa in November 2003);  
amendment of the composition of the Executive Council;  and streamlining the administrative 
procedures under the Act.  The new regulations to the Act have not yet been finalized. 
99. GMO products intended for sale as food and/or feed are analysed for food safety on a case-
by-case basis.  Prior to undertaking any activity i nvolving genetic modification, a suitable assessment 
of the environmental and human health risks must be made.82  Permits are required for import, export, 
contained use, trial release, and commercial releas e (Table III.7).  Interested parties must apply to 
develop or use a GMO.  Application is to the Regi strar of GMOs at the Department of Agriculture, 
who checks whether the application meets the requireme nts of the GMO Act.  If so, the application is 
evaluated by the Advisory Committee, which assess es the risk.  If necessary the Advisory Committee 
may request further information from the applicant.  A recommendation is prepared by the Advisory 
Committee and submitted to the Executive Council, wh ich evaluates the application, the advisory 
committee's recommendation, and the public's input prior to reaching a decision.  Permits may be used for import, export, contained use, field trials or commercial use.  Up to mid 2009, South Africa 
has approved  herbicide-tolerant soybean, maize, and cotton, insect-resistant maize and cotton, as well 
as stacked insect-resistant and herbicide-tolerant ma ize and cotton for commercial release and/or for 
food and animal feed.
83 
Table III.7 
GMO activities subject to permits, 2009 
Activities No. of days to issue a permit Fees  
Appeal n.a. R 3,700 each 
Commodity clearance 180 R 15,600/application 
Contained use of GMOs 30 R 910/application 
Fast tracking n.a. R 2,050 each 
General release and marketing of GMOs 180 R 15,600/application 
Import and export of GMOs 30 R 300/application 
Registration of facility 30 R 370/application 
Trial release of GMOs 90 R 20/application 
Use as food or feed or for processing 30 R 210/application 
n.a. Not applicable.  
Source:  Genetically Modified Orga nisms Act, 1997 (Act No. 15 of 1997);  and in formation provided by the South African 
 authorities. 
                                                           
81 According to the authorities the GMO Act is consistent with the provisions of the Cartagena Protocol 
on Biosafety. 
82 Genetically Modified Organism Act (Act No. 15 of 1997) Regulations. 
83 Genetically Modified Organism Act (Act No. 15 of 1997) Regulations. WT/TPR/S/222/ZAF Trade Policy Review 
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 (c) Marking, labelling, and packaging 
100. Marks and labels are to provide the consumer with accurate and releva nt information about 
products. 
101. Several laws set out South Africa's packagi ng and marking requirements:  the Agricultural 
Products Standards Act and the 1989 Liquor Products Act, which regulate packaging and marking of 
agricultural products (including imported goods) for local sale and for export;  the Merchandise 
Marks Act (No. 17 of 1941), as amended, and th e Intellectual Property Laws  Amendment Act (No. 38 
of 1997) have provisions concerning the marking a nd packaging, and the use of certain words and 
emblems;  the Explosives Act indicates that explos ives must be clearly identified in the prescribed 
manner with legible and visible identification marki ngs and must be packed in the required packaging 
material.84  Producers and importers of explosives must submit examples of the packaging material in 
order to create and maintain a database of such samples.  
102. Products manufactured in South Africa and pur chased by the State should be marked by the 
suppliers with "Made in the Republic of South Africa/Vervaardig in die Republiek van 
Suid-Afrika".85  Under the Merchandise Marks Act, importe d goods should not bear marks giving the 
impression that they originate in South Africa.  The country of origin must be identified on imported 
goods.  All products shipped to South Africa must c onform with the metric international system of 
units.   
103. Foodstuffs containing food additives used as an antioxidant, sweetener, colorant, curing 
agent, flavour enhancer, flavouring or preservative mu st be labelled with an indication of every food 
additive.  "Special" labelling requirements apply to drugs, wine, foodstuffs, cosmetics, and toothpaste, 
and powders and mouthwashes containing fluoride.  Certain products require labels in English and 
Afrikaans.  False or misleading descriptions on alcoholic products is prohibited.  
104. The Agricultural Products Standards Act of 1990 regulates the packaging and marking of 
commodities (including imported goods) for local sal e as well as export (Table III.6).  Labelling (as 
well as quality standards) applies to a vast list of agricultural products including fruit, flowers, grains, 
processed animal and plant products, animal produc ts, and liquor products derived from wine.  The 
Minister in charge of agriculture may prescribe th e use of a "distinctive mark" on exports to certify 
the class or grade or, in the case of organically produced products, the production method concerned; 
and/or a particular management control system. 
105. South Africa has regulations mandating the labe lling of GM food products, including when 
allergens or human/animal proteins are present, an d when a GM food product differs significantly 
from a non-GM equivalent.86  Under the Consumer Protection Act (Section 24) food that contains GM 
ingredients must be labelled accordingly. 
106. The SABS mark is granted to products that co mply with relevant specifications.  The SABS 
mark is voluntary and is not limited to domestically manufactured products. 
107. The National Economic Development and Labour Council (NEDLAC) has launched a 
campaign to promote South African companies, products, and services. Companies that meet certain 
                                                           
84 Chapter 3, Explosives Act (No. 15 of 2003) (South African Government Information online, 
"Documents Acts".  Viewed at:  http://www.info.gov.za/view/DynamicAc tion?pageid=544 [10 March 2009]). 
85 State Tender Board (2000). 
86 Foodstuffs, Cosmetics, and Disinfectants Act, 1972 (Act No. 54 of 1972). SACU-South Africa   WT/TPR/S/222/ZAF 
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criteria (i.e. labour and local requirements, and la bour and environmental standards) may use the 
"Proudly South African" logo.87  
(v) Government procurement 
108. South Africa is not a signatory to the plurila teral Agreement on Government Procurement.  
The procurement system has not changed substan tially during the review period.  Government 
procurement remains decentralized , and preferences and offsets ar e still in place.  However, the 
system is being harmonized and reformed to intr oduce a framework for supply-chain management.88 
109. The basis for procurement is Section 217(I) of the South African Constitution, which 
stipulates that contracts for goods and services must  be in accordance with a system that is fair, 
equitable, transparent, competitive, and cost-effectiv e.  The Constitution also confers an obligation for 
national legislation to set a framework providing fo r preferential procurement to address the social 
and economic imbalances of the past.89 
110. Procurement in South Africa is regulated by the State Tender Act (Act No. 86 of 1968), the 
Public Finance Management Act of 199990, the Preferential Procurement Policy Framework Act 
(PPPFA) of 2000, the Policy to Guide Uniformity in Procurement Reform Processes in Government 
(a Framework for Supply Chain Management), a nd the general Procurement Guidelines, which are 
supplemented by individual Accounting Officer's Procurement Procedures.  These apply to all 
national and provincial departments.  The National Treasury, through the Public Finance Management 
Act of 1999, introduced norms and standards for tr ansparency and expenditure control measures, 
which should include best practices to regulate fi nancial management in th e national and provincial 
spheres of government.91  The Municipal Finance Manageme nt Act (MFMA) extends the same 
principles to municipalities. 
111. All procurement contracts must comply with the Preferential Procurement Policy Framework 
Act (Act No. 5 of 2000) and its  implementing regulations of 2001, wh ich stipulate that preferences 
must be applied to all tenders regardless of valu e.  The preferences are aimed at:  supporting SMEs 
and micro enterprises (SMMEs) and historically disadvantaged individuals (HDIs), women, and 
physically handicapped people;  and promoting employment and domestic production including in 
specific provinces and the rural areas.  Preference points are to be awarded on the basis of comparative prices not tender prices.  For tender s valued of less than R 500,000, there is an 
80/20 split, with 80 points awarded to the lowest price acceptable bid.  A maximum of 20 points is awarded to HDIs under the Black Economic Em powerment (BEE) programme depending on 
ownership, management, and employment goals.  Te nders valued over R 500,000 operate on the same 
basis except the split is 90/10.  The contract is to  be awarded to the bidder with the highest points 
                                                           
87 Proudly South African online informati on, "Competition Answers".  Viewed at:  
http://www.proudlysa.co.za/le vel2/supporters.asp?include=../docs/misc/ comps/answers.html [10 March 2009]. 
88 In accordance with a policy document on government procurement adopted on 10 September 2003.  
South Africa is moving towards the implementation of supply-chain management (National Treasury, 2003). 
89 The Preferential Procurement Po licy Framework Act (PPPFA) (No. 5 of 2000) and its accompanying 
regulations were promulgated to achieve these goals. 
90 The Public Finance Management Act (PFMA) (Act No. 1 of 1999, as amended by Act No. 29 of 
1999) was promulgated to regulate financial management in the national and provincial spheres of government.  
The Municipal Finance Management Bill (MFMA) of 2002 will extend the same principles to municipalities.  
Considerable powers are assigned to  accounting officers, accoun ting authorities, and municipal managers to 
enable them to manage their financial affairs within the parameters laid down by the prescribed norms and 
standards.  Both the PFMA and the MFMA require th e National Treasury to monitor compliance with these 
norms and standards. 
91 Sections 215-219 of the Constitution. WT/TPR/S/222/ZAF Trade Policy Review 
Page 314 
 
 
 unless justified by other developmental objective criteria.  Exemption from provisions of the 
Framework Act might be justified on grounds of public or national secu rity interests.  Foreign firms 
may only bid through a local agent.  
112. Procurement of goods and services is arrange d through the State Tender Board or by the 
regional tender boards, which cover the area determ ined by the Minister of Finance.  In 2000, 
South Africa decided to phase out the tender boards.   Therefore, in 2003, the State Tender Board 
Regulations were amended to allo w national departments to procure goods and services either through 
the State Tender Board or through the accounting officers.92  However, no information was made 
available regarding the criteria to determine which contracts are to be awarded through the Board or 
the accounting officers, or whether this is at the discr etion of the Board.  According to the authorities, 
since 2005 the State Tender Board has not awarded any contracts and departments procure their own goods and services.  At end 2003, all provincial tende r board acts had been repealed and the members' 
tenure terminated.   
113. Most government purchasing takes place through competitive bidding, on invitations for 
tenders, published in the Government Tender Bulletin
93, on ministry websites, and sometimes in local 
newspapers.  Where the Tender Board considers it "advi sable", bidders are pre-sc reened to ensure that 
they can supply the goods or services so that the tender offer is extended to suitable bidders.94  The 
Board might consider that invitations to tender fo r specific supplies or services should be limited to 
certain bidders;  potential bidders are evaluated in the light of the requirements, and invitations are 
extended only to bidders found to be suitable.95  In comparing tenders, the prices are brought to a 
comparative level by deducting preferences and ot her benefits, adding delivery and other costs as 
applicable, and bringing implied contract price ad justments into account.  The Board awards price 
preferences for local content, for products with the SABS marks, and other preferences mandated by 
the Ministry of Finance.96  After prices have been brought to  a comparative level the lowest is 
normally chosen;  when there are equal-price tende rs the Board's General Procedures stipulate the 
criteria to be followed, including national content. 
114. Until 2003, accounting officers were required to ob tain three bids for contract valued over 
R 500,000, which were to be subm itted to the Tender Board for final approval.  Contracts valued over 
R 5 million required the approval of the Director-Gener al of the Department of Trade and Industry.   
As of 2003, contracts valued over R 500,000 must be  advertised in several newspapers, including the 
Government Tender Bulletin .  Each department has to appoint a bid adjudication committee (BAC), 
which includes the accounting officer, and a bid evaluation committee (BEC).  The BEC makes a 
recommendation to the BAC.  The BAC usually foll ows the BEC recommendation;  otherwise it must 
submit a report within ten working days to th e National Treasury and the Auditor-General.  
Procurement by state-owned enterprises are co vered in Schedule 2 of The Public Finance 
Management Act.  Under the PFMA, SOEs may develop their own procur ement policies provided 
they conform to the core principles of the PFMA, namely that the procurement process is competitive, 
transparent, and fair.  SOEs must also comply with the National Industrial Participation Programme 
(NIPP). 
                                                           
92 Amendment to Section 13 of the State Tender Board Act (Act No. 86 of 1968) ( Government Gazette  
No. 25766, 5 December 2003). 
93 DTI online information, "Government Tender Bulle tins".  Viewed at:  ht tp://www.dti.gov.za/tender/ 
bulletins.htm [26 January 2009]. 
94 No information was made available as to what this screening entails. 
95 The Board publishes in the State Tender Bulletin  particulars of suppliers and services in respect of 
which there are lists of approved bidders. 
96 State Tender Board (2000).   SACU-South Africa   WT/TPR/S/222/ZAF 
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115. In accordance with the NIPP, which entered into force in 1996 and is managed by the 
Department of Trade and Industry, all government purchases or lease contracts (goods, works, and services) are subject to an industrial participation (IP) obligation.  Any cont ract having an imported 
content equal to or exceeding US$10 million is subject  to an IP obligation.  No contract can be 
awarded to a bidder who has not satisfied this  requirement.  This obligation requires the 
seller/supplier to engage in commercial or indus trial activity equal to or exceeding 30% of the 
imported content of total goods purchased under th e government tender, with the exception of 
defence-related contracts.  In the case of defenc e contracts, an additional 50% on the imported content 
(referred to as DIP – Defence IP) is required.
97  The obligation may take the form of investments, 
joint-ventures, sub-contracting, licensee productio n, export promotion, s ourcing arrangements, and 
research and development collaboration.98  Bidders must submit their projects, which should be 
beneficial to the South African economy, to the Indus trial Participation Secretariat at the Department 
of Trade and Industry for approval before implementa tion.  Projects are evaluated by two committees:  
one assesses the technical merit of the proposal an d determines whether it meets the DTI's and the 
industry's objectives, and the other ensures adherence to the principles of the NIPP.  Any company is 
free to object to a decision, and a project can  be reconsidered based on new information. 
116. Imported goods bought by the Government must be shipped by vessels owned or operated by 
South African shipping companies or approved sh ipping companies, unless such arrangements result 
in higher costs or excessive delays.  Exemptions ar e granted at the discretion of the Tender Board.  
(3) M EASURES DIRECTLY AFFECTING EXPORTS  
(i) Export registration and procedures 
117. All exporters are required to register with  the South African Revenue Services (SARS).99  In 
addition, exporters must be registered with the Department of Trade and Industry (DTI) to receive 
export incentives. 
118. Export declarations are processed by SARS, which is in the process of implementing an 
automated system.  The original and an audit copy  of each export declaration is processed by Customs 
and retained for record and trade statistics purpo ses.  Any other documents (e.g. commercial invoice 
including the price, bill of lading, insurance doc uments, packing list, certificates of origin, export 
licence, and health and sanitary certificate) must be produced, if required by Customs.  Exporters 
must follow the packing and labelling requirement s prescribed by the country of destination.100  
Additional requirements (e.g. sanitary and phytosan itary) depend on destination;  inspection and 
certification by the relevant official South African authority may be needed in order to comply with 
the requirements of the importing country.  Hen ce for certain commodities, clearance may be required 
from departments other than Customs, thereb y extending the time required for clearance. 
                                                           
97 This is the only change in the NIPP Guidelines since 2004. 
98 DTI online information, "National Industrial Participation Programme".  Viewed at:  
http://www.thedti.gov.za/nippgm/SBD 5Form.pdf [16 February 2009]. 
99 DTI online information, "Registering as an Exporter". Viewed at:  http://www.thedti.gov.za/ 
exporting/registeringasanexporter.htm [5 February 2009]. 
100 For example, shipper's mark;  country of origin;  weight marking (in pounds and kg);  number of 
packages and size of cases (in inches  and centimetres);  handling marks (international pictorial symbols);  
cautionary markings such as "This Side Up" or "Use No Hooks" (in English and in the language of the country 
of destination);  port of entry;  and labels for h azardous materials (universal  symbols adopted by the 
International Maritime Organization). WT/TPR/S/222/ZAF Trade Policy Review 
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 (ii) Export taxes and levies 
119. South Africa still levies a tax on exports of unpolished diamonds in order to promote the 
development of the local economy, develop skills, and create employment.101  As of 2008, SARS has 
been responsible for collecting the diamond expor t levy of 5% based on the value of exported 
unpolished diamonds.  There are also export levies  on citrus fruit (R 0.0213 per kg)102 and on wine (in 
bulk R 0.05 per litre and R 0.08 per litre otherwise).103 
120. Inspection fees are levied on exports of certa in perishable goods in accordance with the 
inspection requirements.  Fees are published by the Department of Agriculture.104 
(iii) Export prohibitions, controls, and licensing 
121. A number of products are still subject to expor t control, including export permits (licences) 
and prohibition (Table AIII.3)105;  the list is reviewed periodically.106  Controls are maintained on 
grounds of safety, security, and the environment,  and to ensure compliance with international 
obligations under treaties and conventions to whic h South Africa is a signatory (e.g. the Montreal 
Protocol).  Export prohibitions apply only to oz one-depleting substances in accordance with the 
Montreal Protocol.  South Africa does not apply any trade embargoes except those imposed by the 
United Nations. 
122. Export permits are valid for exports to any country, including other SACU members.  
Applications are to the International Trade and Administration Commission, or the government agency that controls the specific permit in questi on.  The application procedure and time required for 
obtaining export permits takes on average three working day. 
123. An export authorization is required, on SPS gr ounds, to export any animal, semen, ova or 
sterilized ostrich eggs.
107  Exports of meat require a health certificate and the payment of fees, 
depending upon the province, prior to export.108  Exports of meat must be inspected, sampled, and 
tested.  Health certificates are only issued for meat that has been slaughtered at an abattoir approved 
as an export abattoir and in accordance with the essential national standards.  
124. Exports of any alcoholic product with an alcohol  content of more that 1%, except for beer, 
sorghum beer, and medicines, require an export certificate under the Liquor Products Act.109  
Certificates are subject to a fee, which vari es according to the need to sample or not.110 
                                                           
101 Diamond Export Levy Act (Act No. 15 of 2007), and Diamond Export Levy (Administration) Act 
(Act No. 14 of 2007). 
102 Marketing of Agricultural Products Act (Act No. 47 of 1996).  
103 Marketing of Agricultural Products Act (Act No. 47 of 1996),  Wine Industry:  Establishment of 
Statutory Measures and Determin ation of Guideline Prices ( Government Gazette  No. 28188, 1 November 2007). 
104 Perishable Products Export Control Act (Act No. 9 of 1983), updated on 29 September 2008. 
105 ITA Act No 71 of 2002. 
106 The criteria for this review were not specified. 
107 Livestock Improvement Amendment Act (Act No. 60 of 1997). 
108 Schedule 1 of the Meat Safety Act (Act No. 40 of 2000) lists all the animals to which this 
requirement applies. 
109 Liquor Products Act (Act No. 60 of 1989);  and Liquor Products Act:  Regulations:  Amendment 
(Government Gazette  No. 29652, 2 March 2007). 
110 The application fee varies from R 55.00 per application plus R 5.00 per hl up to the first 100 hl, plus 
an analysis fee of R 25.00 or plus R 4.50 when no analysis is required (Liquor Products Act:  Regulations:  Amendment ( Government Gazette  No. 29652, 2 March 2007)). SACU-South Africa   WT/TPR/S/222/ZAF 
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125. Exports of unpolished diamonds con tinue to be regulated in South Africa;  they are prohibited 
unless undertaken by a producer, a  manufacturer (synthetic diamonds), a dealer, or a holder of an 
export permit.  Unpolished diamonds must be so ld at a diamond exchange and export centre.111  
Under a 1994 agreement, South African Sugar Asso ciation (SASA) was responsible for exporting all 
sugar except if refined and packed in bags of  25 kg or less.  A 2000 agreement allowed milling 
companies to export refined sugar and direct-consum ption raw sugar (i.e. sugar not for use by the 
food industry);  therefore, SASA is at present only responsible for exporting indirect-consumption 
raw sugar.  There is no prohibition or restriction on the export of sugar;  however, it is subject to 
automatic export licensing.  All sugar exporters must apply for an export permit issued by the 
Department of Trade and Industry.  There are no qua ntitative restrictions on sugar exports.  Automatic 
licensing is for data collection;  permit s are generally issued within 24 hours. 
(iv) Export subsidies, finance, and assistance 
126. South Africa notified to the Committee on Agriculture that it did not provide export subsidies 
during 2002-05.112  In 2003, South Africa notified the WTO that it does not maintain any specific 
subsidies or any subsidy that increases exports or aims to reduce imports.113   
127. Duty drawbacks are allowed on imports of certain  goods incorporated or used in goods to be 
exported.  Drawbacks cannot exceed the duty actually pa id at the time of importation.  A drawback is 
given once evidence is provided that the import has b een used to manufacture, process, finish, or pack 
an export.114  There are relatively few applications fo r drawbacks, apparently because of refund 
delays;  while, in the case of rebates, no duties have to be paid. 
128. The Department of Trade and Industry (DTI) has undertaken to implement a series of 
industrial development zones (IDZ) under its Spa tial Development Initiative (SDI) programmes.  
Firms that locate in those zones will benefit from,  inter alia , fiscal incentives, expedited customs 
procedures, and a single-stop window th at facilitates the issuing of all the required permits.  The fiscal 
incentives include duty suspension on imports of raw materials, including machinery used in the 
production of goods intended for export, and VAT exemptions under specific conditions for inputs 
procured in South Africa.115   
129. Several incentive schemes remain available to South African exporters for the promotion and 
development of exports and export markets (Table AIII. 4).  The DTI is still in charge of administering 
most of these schemes. 
130. Export promotion is also the responsibility of the DTI.  The Export Promotion Directorate, 
under the DTI (specifically under Trade and Investme nt South Africa (TISA)), is responsible for 
promoting South Africa's exports of  goods and services.  The Directorate provides both financial and 
                                                           
111 Diamonds Second Amendment Act (Act No. 30 of 2005) ( Government Gazette No. 27513, 
14 February 2006);  and Diamonds Act (Act No. 56 of 1986):  Amendment of regulation ( Government Gazette  
No. 30942, 4 April 2008). 
112 WTO documents G/AG/N/ZAF/66, 8 September 2008;  G/AG/N/ZAF/59, 16 January 2007;  
G/AG/N/ZAF/57, 10 March 2006;  an d G/AG/N/ZAF/48, 7 November 2003. 
113 WTO document G/SCM/N/95/ZAF, 12 August 2003. 
114 For a full list of goods eligible for tax rebates and the eligible specific industries, see Schedule 5 of 
the Customs and Excise Act (Act No. 91 of 1964), as amended (SARS online informat ion, "Legal and Policy:  
Schedules to the Customs and Excise Act (Tarif f Books)".  Viewed a t: http://www.sars.gov.za/ 
home.asp?pid=2630 [2 February 2009]). 
115 The authorities noted that "specific conditions" vary according to the transaction (DTI online 
information, "Industrial Development Zones (IDZ)".   Viewed at:  http://www.thedti.gov.za/offerings/ 
offering.asp?offeringid=217 [16 February 2009]). WT/TPR/S/222/ZAF Trade Policy Review 
Page 318 
 
 
 non-financial assistance to eligible exporters.  It  also provides information on export markets and 
opportunities;  and issues country reports, market surveys, and booklets on the export process, on 
quality and other standards, and on e-commerce.  E xporters are informed about the requirements for 
entering foreign markets and identifying export markets for their products and services.  
131. TISA is responsible for administering the Export Marketing and Investment Assistance 
Scheme (EMIA).  The purpose of the scheme is to  partially compensate exporters for the cost of 
developing new export markets for goods and services.  There are several programmes under the EMIA (Table AIII.4);  assistance is granted at the di scretion of the DTI.  Eligible applicants include 
South African-based manufacturers including small, medium-sized and micro enterprises (SMMEs) 
and previously disadvantaged individuals (PDIs);  South African export trading houses
116;  and 
South African export councils  and industry associations. 
132. In addition, the Sector Specific Assistance Sc heme (SSAS) provides reimbursable grants to 
industries considered a priority by the DTI as outlined  in ASGISA and NIPF.  Funds must be used to, 
inter alia , stimulate exports, diversify exports, stimulat e the participation of SMEs in the export 
sector, promote black economic empowerment, and creat e labour.  Grants are also available under the 
Project Funding for Emerging Exporters, which targ ets only new exporters.  Other sector-specific 
programmes are aimed at promoting exports, such  as the Motor Industry Development Programme 
(MIDP);  the Productive Asset Allo wance for the automotive industry117;  Duty Credit Certificates for 
the Textiles Industry;  and Fund for the Committee on Secondary Manufacture (to support exports of steel products) (Chapter IV). 
133. The Export Credit Insurance Corporation of South Africa (Pty) Ltd (ECIC) continues to 
provide export credit insurance for goods and services.   Insurance cover is provided for losses arising 
from political risk, expropriation, loss incurred due to any action taken by the host government that 
prevents the conversion of a local currency, war and civil disturbance, breach of contract, protracted 
default;  and insolvency.  The ECIC provides insuran ce for credits of a minimum of two years, up to a 
maximum of ten years.  Credit insurance covers up to 90% of the contract value but it is contingent on 
a national content of at least 50% of the value of the export.
118    
134. South Africa also offers subsidized medium- and long-term loans to promote the 
export/import of capital goods and services.  Financ ing facilities offered by  banks and financial 
institutions, such as the Industrial Development Corporation of South Africa Limited (IDC), are 
enhanced by the credit insurance cover and in terest support from the government-owned Export 
Credit Insurance Corporation of South Africa (ECI C).  The ECIC enables exporters of capital goods 
and services to offer extended credit facilities to foreign buyers by underwriting bank loans and 
investments outside the country. 
(4) M EASURES AFFECTING PRODUCTION AND TRADE  
(i) Incentives 
135. Incentives are one of South Africa's key industr ial policy instruments.  A wide range of 
incentive schemes continue to be available to investors (Table AIII.4).  These include general 
incentive schemes such as the Spatial Developm ent Initiative (SDI) (which includes industrial 
                                                           
116 An enterprise that represents at least three SMMEs and focuses on export promotion. 
117 DTI online information, "Productive Asset Allowance".  Viewed at: http://www.thedti.gov.za/ 
offerings/offering.asp?offeringid=216 [18 February 2009]. 
118 National content includes inputs, wages, freight charges paid in South Africa, insurance and finance 
charges, and any fees paid fo r services in South Africa.  SACU-South Africa   WT/TPR/S/222/ZAF 
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development zones (IDZs)) (e.g. the Lubombo Initiativ e and the West Coast Initiative);  Structural 
Adjustment Programmes for specific industries (e.g. automotive, and textile and clothing), innovation 
and research;  and regional incentive programmes.  All of these programmes are aimed at fostering sustainable industrial development in areas where poverty and unemployment are highest;  providing 
historically disadvantaged persons (HDPs) with opportunities;  developing the rapidly growing SME 
sector of the economy. 
136. The SDI programme focuses on attracting domestic and foreign investors into areas where 
there is economic potential in order to enhance gr owth and improve socio- economic conditions.  The 
IDZs, specialized industrial areas within an SDI, ar e an integral part of the SDI programme.  The IDZ 
programme, administered by the DTI, is to improve the competitiveness of the South African 
manufacturing sector.
119  IDZs are industrial estates linked to an international port or airport with high 
quality infrastructure and expedited customs pro cedures, where producers benefit from duty and tax 
incentives (Table AIII.4).  IDZs mainly target expor t-oriented investment a nd production.  There are 
currently four IDZ in South Africa.120 
137. South Africa also has several development finance institutions, which operate under the 
purview of DTI.  The South African Micro-fi nance Apex Fund (SAMAF), a wholesale funding 
institution established in 2006, provides finance to  micro and small and "s urvivalists" business at 
affordable rates.  SAMAF works with community -based partner organizations like the Financial 
Services Co-operatives (FSC), village banks, and me dium to large micro-finance institutions (MFI).121 
138. Khula Enterprise Finance Ltd (Khula), established in 1996 as an independent agency of the 
DTI, is South Africa's most important devel opment finance institution focusing on the rapidly 
growing SME sector of the economy.  Khula is a w holesale finance institution with ties in the public 
and private sectors, including commercial banks, re tail financial institutions, specialist funds, and 
joint ventures. It supplies complementary loans to bridge gaps not addressed by commercial financial 
institutions in the small business sector.122 
139. The Industrial Development Corporation of South Africa Limited (IDC), a state-owned 
development finance institution in operation since 1940, provides financing to  entrepreneurs engaged 
in competitive industries.123  The IDC's main objective is to pr omote economic growth and industrial 
development in South Africa and the region as a whole.   It contributes to the goals of the Shared and 
Accelerated Growth Initiative of South Africa (ASGIS A) through the financi ng of labour intensive 
industries;  the development of SMEs; and the acceleration of Black Economic Empowerment.124 
                                                           
119 Manufacturing Development Act (Act No. 187 of 1993): Industrial Development Zone Programme:  
Amendment ( Government Gazette  No. 29320, 27 October 2006).   
120 These are:  Coega IDZ, East London IDZ, Richard's Bay IDZ, and JIA IDZ at Kempton Park. 
121 DTI online information, "Development Finance In stitutions". Viewed at: http://www.thedti.gov.za/ 
thedti/samaf.htm [10 March 2009].  
122 For detailed information on Khula's financial schemes (e.g. Khula Credit Indemnity Scheme and 
Khula Land Reform Empowerment Facility), see DTI onlin e information, "Khula Enterprise Finance".  Viewed 
at:  http://www.thedti.gov.za/thed ti/khula.htm [10 March 2009]. 
123 Industrial Development Corporation online info rmation.  Viewed at:  http://www.idc.co.za/ 
[29 June 2009]. 
124 IDC online information, "About the IDC".  Vi ewed at:  http://www.idc .co.za/Overview%20of% 
20the%20IDC.asp [29 June 2009]. WT/TPR/S/222/ZAF Trade Policy Review 
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 (ii) State trading, state-owned enterprises, and privatization 
140. In 2002, South Africa last notified to the WTO that it did not maintained any governmental 
and non-governmental enterprises as defi ned by Article XVII of the GATT 1994.125  According to the 
authorities, this has remained unchanged during the period under review. 
141. State-owned enterprises (SOEs) still play a critical role in South Africa's economy, operating 
in key sectors of the economy such as teleco mmunications, energy, defence, and transport 
(Table III.8).  Until 2004, South Africa's intention was to privatize SOEs;  however, the introduction 
of the Accelerated and Shared Growth Initiative (A SGISA) in 2003/04, which gives the SOEs a more 
significant role in the development of the economy, brought about a strategic shift.126  Moreover, 
according to the authorities, the commercialization and/or partial privatization of some SOEs was 
virtually put on hold during the review period  because the programme had been relatively 
unsuccessful.  During 2001-08 only one SOE (Advent ure Resorts) was sold, for some US$10 million, 
while the sale of 25% of Telkom's shares in 2003 resulted in US$500 million profit.  
Table III.8 
State-owned enterprises, 2009 
SOE Activity Share owned by the State (%) 
Air Traffic and Navigation Services Co mpany Ltd.  Air transport control ..  
Airports Company South Africa (ACSA) Air transport services ..  
Alexkora Alluvial diamond mining 100 
Arivia IT provider ..  
Armaments Corporation of South Africa Ltd. (ARMSCOR) Armament procurement  100 
Aventura Holiday resorts ..  
Broadband Infracoa Telecom ..  
Central Energy Fund (CEF) Energy 100 
Denela Defence-related manufacturing 100 
Electricity Distribution Industry Holdings (EDI) Electricity ..  
Eskoma Electricity supply 100 
Industrial Development Corporation (L td.) (IDC) Industrial development ..  
Ithala Development Finance Corporation (L td.) Financial and property services ..  
Land Bank and Agriculture Bank of South Af rica (Land Bank) Financial services ..  
Limpopo Economic Development Enterprise (Limdev) Financial services ..  
National Energy Regulator (NERSA) Elect ricity, gas-pipes, and petroleum 
pipeline .. 
National Housing Finance Corporati on (NHFC) Financial services ..  
Pebble Bed Modular Reactor (Pty) Ltd. (PBMR)a Nuclear power generation 64 
Petroleum, Oil, and Gas Corporation of South Africa (Pty) Ltd. 
(PetroSA)  Hydrocarbons provider ..  
Public Investment Corporation (PIC) Investment management 100 
SA Express (SAX)a Air transport 100 
South African Forestry Company Ltd. (SAFCOL)a Forestry 100 
Small Enterprise Development Agency (SEDA) Enterprise support ..  
South African Airways (SAA)a Air transport 95 
South African Broadcasting Corporation (SABC) Broadcasting  ..  
South African Post Office (SAPO) Postal services ..  
South African Rail Commuter Cor poration (SARCC) Rail commuting ..  
Telkom Telecom 38.9  
Table III.8 (cont'd)
                                                           
125 WTO document G/STR/N/8/ZAF, 18 March 2002.  
126 The Presidency (undated). SACU-South Africa   WT/TPR/S/222/ZAF 
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SOE Activity Share owned by the State (%) 
Transneta Port and rail infrastructure  100 
.. Not available. 
a Managed by the Department of Public Enterprises.   
Source:  Department of Public Enterprises online informa tion, "State-owned enterprises".  Viewed at:  
 http://www.dpe.gov.za/home.asp?id=925 [27 February 2009];  South Africa In formation online, "SA invests in 
 African infrastructure".  Viewed  at:  http://www.southafrica.inf o/what_happening/news/african_union/ 
 parastatals-040805.htm [27 February 2009];  Government Communica tion and Information System online, 
 "Contact directory:  Gove rnment Structure a nd Parastatals".  Viewed at:  http://www.gcis.gov.za/gcis/ 
 directory.jsp?dir=7 [27 February 2009];  and inform ation provided by the South African authorities. 
142. Since 2004, the aim has been to restructure the SOEs under the responsibility of the 
Department of Public Enterprises (DPE) so that th ey become more efficient, profitable businesses that 
could contribute to the economic grow th and development of the country.127  Restructuring and further 
investment in SOEs have continued;  the SOEs ha d to streamline their operations, dispose of non-core 
assets, reduce costs, and improve access of the historica lly disadvantaged to utilities.  However, some 
SOEs remain loss-making, with weak financial positions, and continue to be undercapitalized.128 
143. The opening-up of some industries to comp etition and further improving the regulatory 
environment would ensure that certain services are provided at a lower cost and better quality.  
Although transport, energy, and defence have b een somewhat opened to comptetion, three major 
public enterprises in principle still operate under monopoly or hold exclusive rights: Transnet (transport), Eskom (electricity), an d Denel (defence) (Chapter IV). 
(iii) Competition policy and price controls 
(a) Overview 
144. The competition regime has not undergone subs tantial changes since the previous Review.  
The authorities continue to address anti-competitiv e practices across all sectors of the economy and 
are attempting to strengthen the existing competiti on regime.  Nevertheless, exemptions to the 
application of the law could result in discretionary  application of the law, thus diminishing the 
effectiveness of competition policy in the economy. 
145. Competition authority is vested in three institu tions with distinct functions:  the Competition 
Commission of South Africa (CCSA);  the Competition Tribunal of South Africa (CTSA);  and the 
Competition Appeal Court (CAC).  The CCSA is r esponsible for investigation, prosecution, and 
advocacy.  CTSA deals with all large (i.e. above the threshold
129) mergers and all restrictive practices, 
and acts as an appeal body for CCSA's decisions in regard to small and intermediate mergers and 
exemptions.  The CAC is a division of the High Court.   
                                                           
127 The DPE portfolio comprises key network infrastructural providers (Eskom, Transnet, and 
Broadband Infraco);  a full service network airline (Sou th African Airways);  an advanced military aerospace 
and defence manufacturer (Denel);  a major technology development initia tive (Pebble Bed Modular Reactor);  
a forestry company (SAFCOL);  and a diamond mining company (Alexkor).  Broadband Infraco and 
South African Express Airways (SAX) became SOEs in the 2007/08 financial year. 
128 Department of Public Enterprises (undated).  
129 If the combined annual turnover or assets of both the acquiring and tr ansferred/target firms are at or 
above R 6.6 billion, and the annual turnover or asset value of the transferred/target firm is at least R 190 million, the merger must be notified to the Competition Commission as a large merger. WT/TPR/S/222/ZAF Trade Policy Review 
Page 322 
 
 
 146. The Competition Act of 1998, which fundament ally reformed South Africa's competition 
regime, substantially strengthening the powers of the competition authorities, has not been amended 
since the last Review of SACU in 2003.  The Ac t prohibits anti-competitive conduct, restrictive 
practices (such as, price fixing and collusive tenderi ng) and "abuses" by "dominant" firms (firms with 
a market share of 45% or more).130  The Act also requires a notification and prior-approval procedure 
for mergers and acquisitions, and carries penalties for c ontraventions.  In principle the Act applies to 
all sectors of the economy;  however, the Competiti on Commission has the right to exempt firms from 
the application of the Competition Act.  Exempti ons are granted by the Commission if the agreement 
or practice contributes to the following objectives: export promotion;  assisting SMEs and historically 
disadvantaged persons to become competitive;  stoppi ng the decline of an industry;  or protecting the 
stability of any industry designated by the Minister responsible for that industry.131  The Act also 
regulates anti-competitive behaviour of state-owned enterprises. 
147. In 2008, the DTI introduced the Competition Amendment Bill into Parliament.  The 
objectives of the Bill are to strengthen certain provisi ons of the Competition Act (No. 89 of 1998), to 
enable the competition authorities to better deal with anti-competitive price-setting strategies, to 
address the levels of concentration in several sectors and the "complex monopolies" in operation 
because of the competition dispensation of the pas t;  to fully incorporate the CCSA's Corporate 
Leniency Policy (CLP) into the law;  and to stre ngthen the penal provisions of the Competition Act.  
148. The provision on "complex monopoly" conduct introduced in the Bill is intended to combat 
the anti-competitive behaviour of firms in highly concentrated markets.132  The need for this provision 
arose because the Competition Act only targets spec ific violations and does not address outcomes 
from anti-competitive behaviour not considered as an infringement in the Act.  According to the DTI 
"complex monopolies" exist in several industries including banking, bread, fertilizer, milling, and telecommunications (Chapter IV). 
149. The Commission's CLP provides an incentiv e to cartel members to admit their 
anti-competitive activities, since the first cartel me mber to do so will be given immunity from 
prosecution with no administrative fine.  The CLP h as been effective in he lping the CCSA to uncover 
collusion and bid-rigging, hence DTI's proposal to intr oduce the policy in the future amended law.  In 
2007/08, the CCSA received ten new applications for co rporate leniency, compared with three in the 
previous year, and conducted investig ations into suspected bread, dair y, milling, pharmaceuticals, tyre 
manufacture, freight forwarding, air cargo, passenger airlines, wire products, construction and plastics 
cartels.  Some of the firms that engaged in anti-co mpetitive conduct (i.e. cartels) were penalized;  the 
remainder are under investigation. 
150. CCSA's Enforcement and Exemptions Division investigates anti-competitive practices and 
assesses of exemption applications.  Complaints ar e either initiated by the Competition Commissioner 
or filed by members of the public or private enterprises.  Where a prohibited practice has been 
                                                           
130 Firms are presumed dominant above a market share of 45%, while the Act requires proof of market 
power below 45% (Chapter 2, Competition Act (Act No. 89 of 1998)).  
131 Competition Act (Act No. 89 of 1998) (South African Government Information online, 
"Documents:  Acts".  Viewed at:  http:// www.info.gov.za/view/DynamicAction?pageid=544. 
132 Complex monopoly conduct exists if:  at least 75% of the goods or services in the particular market 
are supplied to, or by, five or fewer firms;  any two or more of the firms conduct th eir respective business affairs 
in a parallel conscious manner or co-ordinated manner, without agreement between or among themselves; and 
their conduct has the effect of substantially preventing or lessening competition in that market, unless a firm 
engaging in the conduct can prove th at any technological, efficiency or  other pro-competitive gain resulting 
from it outweighs that effect. SACU-South Africa   WT/TPR/S/222/ZAF 
 Page 323 
 
 
established, the matter is referred to the CTSA for adjudication.  In some cases, the CCSA reaches a 
settlement agreement with the parties. 
151. During 2007/08, the CCSA dealt with 193 cases re lated to anti-competitive practices.  Ten 
complaints were initiated by the CCSA (six in 20 06/07);  seven of which were in sectors that the 
CCSA considered a priority, in cluding scrap metal, phosphoric aci d, polymers, and high density 
polyethylene products.133  The remaining investigations were in the transport sector.  Of the 
193 complaints received or initiated, 100 cases were not referred to the CTSA (71 after screening and 
29 after further investigation), 4 were withdrawn a nd 7 were referred for adjudication (Table III.9).  
There were 6 consent agreements and 76 cases were ca rried over for investigation in the next year 
(2008/09). 
Table III.9 
Anti-competitive complaints referred to adjudication, April 2007 to March 2008 
Complainant Respondent  Market/product Description of conduct 
Commissioner ABB Group of 
Companies and others Energy/switchgear A credit-system was designed to ensure that all cartel 
members got access to switchgear, used to control energy grids 
Collusive tendering, price fixi ng, and market allocation in 
this market affected customers (e.g. Eskom, the City of Cape Town, and the City of Durban) 
New Scotland Sawmills Komatiland Forests Forestry/saw logs Abuse of dominance by forcing small saw millers to pay 
high prices on "open/spot market", compared with prices 
paid by larger buyers with long-term contracts with 
Komatiland Forests Komatiland's pricing system in the log allocation processes 
forced prices in the open mark et to levels that were not 
sustainable for those without long-term contracts, thereby forcing them to exit the market.  Long-term-contract holders 
tended to drive the open market prices up as they could 
afford to bid higher prices for a small (top up) portion of their total volume requirements as they secured most of their 
requirements through long-term contracts 
Coetzee and Coetzee Rooibos Limited Agriculture/tea Abuse of dominance as Rooibos Ltd. entered into exclusive 
supply agreements with packers with required them to buy 
rooibos tea only from them 
Commissioner SAA Cargo and 
others Transport/airline 
freight service The cargo division of a number of international airlines 
agreed on fuel surcharges and increased charges for flights 
to South Africa 
Amatole 
Telecommunication 
Services Cell C Telecommunications/
mobile services Amatole Telecommunications Service complained that its 
customers were not permitted by Cell C to interconnect with 
its users, even though it is a licensed service provider;  
Cell C was charged with exclusionary conduct and price discrimination 
Commissioner Adcock Ingram 
Critical Care (AICC) and Tiger Brands Healthcare  Collusive tendering by  dividing the private healthcare 
market between AICC and Fresenius Kabi South Africa and coordinating their bids to st ate tenders for public hospital 
supplies 
Commissioner  Dismed Criticare and 
Thusanong Health Care  Healthcare Collusive tendering:  the respondents joined the cartel 
comprising AICC and Fresenius Kabi South Africa 
Source:  Competition Commission South Africa (2008), Annual Report 2007/2008 ;  and information provided by the 
 authorities.  
                                                           
133 According to the authorities, the priority sectors include infrastructure (including construction), food 
and agri-processing, finance and intermediate industrial products.  These sectors are considered a priority 
because of the Government's overall industrial policy,  the history of anti-compet itive behaviour in those 
markets, and their impact on the poor. WT/TPR/S/222/ZAF Trade Policy Review 
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 (b) Mergers 
152. The Competition Act requires merging parties to notify the CCSA of a merger before it is 
implemented if it meets the turnover and asset-value thresholds stipulated by the Minister of Trade and Industry for intermediate and large mergers.
134  Small mergers may be notified voluntarily or 
upon the CCSA's direction. 
153. The CCSA investigates all notified mergers to de termine whether the transaction is likely to 
lead to substantial prevention or lessening of compe tition, or will negatively affect the public interest.  
It also seeks to encourage a dynamic environment by evaluating mergers that may result in innovation 
or efficiency gains, and increase competition.  Th e CCSA has the authority to approve, approve with 
conditions135, or prohibit intermediate mergers.  For large mergers, the CCSA makes a 
recommendation to the CTSA to approve, approve with conditions, or prohibit. 
154. During 2007/08 a total of 513 mergers were notifie d, 100 more than in the previous year.  The 
increase in merger activity may reflect the growth and development of the economy, but it may also be because the merger notification thresholds ha ve not been updated since 2001, while South Africa 
has continued to grow, capital markets have develo ped, and the consumer price index has increased 
on average by 5.3% year-on-year.  As a result, transactions that did not require notification in 2001, 
based on the value of the threshold at that time, do require notification in terms of the value of the 
threshold at present. 
(c) Price controls 
155. Under the Marketing of Agricultural Products Act (Act No. 47 of 1996) guideline prices are 
determined for all produc ts subject to levies.
136  These guideline prices are for administrative purposes 
only and are to ensure that the levy does not exceed 5% of the actual price.  Guideline prices are set 
according to the national average price at the first poi nt of sale (i.e. closest to the farm); they are 
revised every three years.137 
156. Retail and wholesale fuel prices continue to be regulated by the Government (Chapter IV).  
The pricing of services supplied by parastatals operating in various areas, such as telecommunications 
and transportation, remains subject to control (Chapter IV). 
                                                           
134 The Competition Commission must be notified of all intermediate mergers and acquisitions if the 
value of the proposed merger  equals or exceeds R 560 million (calcu lated by either combining the annual 
turnover of both firms or their assets), and the annual turn over or asset value of the transferred/target firm is at 
least R 80 million.  If the combined annu al turnover or assets of both the acquiring and transferred/target firms 
are valued at or above R 6.6 billion, and the annual turnover  or asset value of the transferred/target firm is at 
least R 190 million, the merger must be notified to the Competition Commission as a large merger. 
135 Conditions are imposed on a merger to curb any anti-competitive effects that might arise (e.g. "the 
merged entity must continue to honour its obligations to a specific customers"). 
136 Marketing of Agricultural Products Act (Act No. 47 of 1996):  Wine industry:  Establishment of 
Statutory Measure and Determination of Guideline Prices ( Government Gazette  No. 28188, 31 October 2005);  
Marketing of Agricultural Products Act (Act No. 47 of 1 996):  Establishment of Levies on Milk and Other Dairy 
Products and the Determination of Guideline Prices in respect of Milk and Other Dairy Products ( Government 
Gazette  No. 28329, 23 December 2005); and Marketing of Agricultural Products Act (Act No. 47 of 1996):  
Establishment of Statutory Measure and Determination of Guideline Prices:  Levy relating to Cotton Lint 
(Government Gazette No. 30925, 4 April 2008). 
137 Section 15, Act No. 47 of 1996. SACU-South Africa   WT/TPR/S/222/ZAF 
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157. The pricing mechanism on sugar a ppears to have been suspended.138 
(iv) Protection of intellectual property rights 
158. Intellectual property rights are protected under a variety of laws and regulations 
(Table III.10).  The DTI administers these Acts through the Companies and Intellectual Property 
Registration Office (CIPRO), which publishes the monthly Patent Journal .  The journal contains the 
filing status of patents, trade marks, designs, c opyrights, cinematography and films applications, 
approvals, and disapprovals. 
Table III.10 
Intellectual property legislation, 2009 
Legislation Brief description 
Intellectual property  
Intellectual Property Laws Amendment Act 
(Act No. 38 of 1997)  Amends the legislation on intellectual property  
Copyright and related rights  
Copyright Act (Act No. 98 of 1978)  
Performers Protection Act (Act No. 11 of 1967) 
Copyright Amendment Act (Act No. 9 of 2002) 
Performers Protection Amendment Act (2002) Regulates copyright 
Protects literary works, musical works, artis tic works, cinematograph film works, sound 
recordings, broadcasts, programme-carryi ng signals, published editions, and computer 
programmes Protects sound recordings, fixed perfo rmances, and composers of music 
Duration of copyright:  50 years 
Copyright Regulations, Government Notice 
R2530 of 1978  Provide for permitted reproduction, reproducti on by libraries or archive depots, sound 
recording royalties, copyright tribunal proceedi ngs, and forms to be used together with 
fees payable thereunder 
Copyright Regulations, Government Notice 
R517 of 2006 Establish collective societies in the musi c industry as stated in the Copyright 
Amendment Act of 2002  
Registration of Copyright in Cinematographic Films Act (Act No. 62 of 1977) Provides for the registration of copyright in cinematograph films on a voluntary basis 
Duration of registration:  50 years Registration constitutes evidence of copyright 
Registration of Copyright in Cinematograph Films Regulations, Government Notice R2140 of 1980 Provides for procedural aspects of applicati ons for registration of cinematograph films, 
opposition, assignments, exclusive licence recordals, deregistration, forms used, and fees payable thereunder 
Performers' Protection Act (Act No. 11 of 1967) Provides for th e protection of performances of literary, musical, and artistic works 
staged in South Africa or in a Rome Conven tion country where protection is granted to 
South African performances Duration of protection:  20 years 
Geographical indications (GIs)a  
Sections 42 and 43 of the Trade Marks Act (Act No. 194 of 1993) Provide for the protection of registered cer tification trade marks and collective trade 
marks, respectively  
GIs may be registered in the form of coll ective trade marks or certification trade marks 
and thus be protected in South Africa 
Sections 6 and 7 of the Merchandise Marks Act 
(Act No. 17 of 1941) and Merchandise Marks 
Amendment Act (2002) Section 6 outlaws the false application of a tr ade description;  GIs inherently describe 
the quality of goods and, thus, if they are fa lsely applied to goods, that is an offence  
Section 7 outlaws the sale of goods with fals e descriptions;  goods bearing false GIs are 
prohibited from being sold in South Af rica as they bear false descriptions 
Section 12 of the Liquor Products Act (Act No. 
60 of 1989) Prohibits false or misleading descriptions for liquor products 
GIs pertaining to liquor products are, in f act, descriptions of such products and, 
therefore, if they are false or misleading, this Section may be used to deal with the 
situation 
Industrial designs  
Designs Act (Act No. 195 of 1993) Provides for the registration and protection of industrial designs 
Industrial designs are divided into aesthetic designs and functional designs.  Functional 
designs include integrated circuits topography and mask works Duration of design rights:  15 years for aes thetic designs;  10 for functional designs 
Table III.10 (cont'd) 
                                                           
138 DTI online information, "Current legislative intervention". Viewed at: http://www.thedti.gov.za/ 
publications/SugarAct/3CurrentLeg islative.pdf [26 February 2008]. WT/TPR/S/222/ZAF Trade Policy Review 
Page 326 
 
 
 Legislation Brief description 
Designs Regulations, Government Notice R843 
of 1999 Provide for the application for registrati on, opposition, assignme nt, deregistration, 
forms used, and fees payable thereunder 
Patents (including plant variety protections)  
Patents Act (Act No. 57 of 1978) and Patents 
Amendment Act (Act No. 20 of 2005) Provide for the registration and granti ng of letters patent for inventions 
Duration of a patent:  20 years, non-extendable 
The test of novelty is absolute novelty Provide for disclosure of indigenous genetic/biological resources, indigenous 
knowledge, prior informed consent and benefit sharing agreement 
Patent Regulations, Government Notice R2470 
of 1978 Provide for applications for registration, opposition, assignment, deregistration, forms 
used, and fees payable thereunder 
Patent Regulations, Government Notice 2007 Pr ovide for the disclosure of indigenous  genetic/biological resources, indigenous 
knowledge, prior informed consent and benefit sharing agreement  
Plant Breeders' Rights Ac t (Act No. 15 of 1976) 
Plant Breeder's Rights Amendment Act (Act 
No. 673 of 1996) Provide for a system whereunder rights relati ng to new varieties of certain kinds of 
plants may be granted and registered 
Further provide for the protection of such ri ghts and the grant of licences in respect of 
the exercise thereof 
Nuclear Energy Act (Act No. 131 of 1993) Section 25 of this Act pr ovides for the patenting of inventions in respect of nuclear 
material, restricted material, nuclear energy  and nuclear related equipment and material
Section 26 of this Act prohibits any South Af rican citizen, resident or a juristic person 
registered in the Republic from applying in a country outside the Republic for a patent 
for an invention or improvement in respect  of the processing, use or production of 
source material, special nuclear related e quipment and material or the production of 
nuclear energy 
Intellectual Property Rights from Publicly Financed Research and Development Act (Act No. 51 of 2008) Provides for the commercialization of inte llectual property derived from publicly 
financed research 
Technology Innovation Agency Act (2008) Provides for the prot ection of inventions and thei r commercialization thereof 
Counterfeit Goods Act (1997) Provides for the criminalization of dealing in c ounterfeits and pirated goods, such as 
trade marks and copyrights 
Layout designs (topographies) of integrated circuits  
Designs Act (Act No. 195 of 1993) Provides for the registration and protection of industrial designs 
Industrial designs are divided into aesthetic  designs and functional designs. Functional 
designs include integrated circuits topography and mask works Duration of design rights:  te n years for functional designs 
Trade marks  
Trade Marks Act (Act No. 194 of 1993) Provides for the registra tion of trade marks, certification trade marks, and collective 
trade marks  
Duration of registration:  ten years, renewabl e indefinitely.  It renders dilution unlawful 
Further it has specific provisions for the pr otection of well-known foreign trade marks 
Trade Mark Regulations, Government Notice 
R578 of 1993 Provide for applications for registration,  opposition, assignment, registered user 
recordal, deregistration, forms pres cribed, and fees payable thereunder 
Merchandise Marks Act (Act No. 17 of 1941) Regulates the marking of merchandise and of  coverings in or with which merchandise 
is sold and the use of cer tain words or emblems in connection with business 
Primarily, it outlaws false description of goods as to quality, ki nd, origin, measure, 
ownership, etc. 
Liquor Products Act (Act No. 60 of 1989) 
Liquor Products Amendment Act (Act No. 11 of 
1993) Provide for control over the sale and producti on for sale of certain alcoholic products, 
the composition and properties of such products and the use of certain particulars in 
connection with the sale of such products. It provides for the control over the import 
and export of certain alcoholic products 
Regulations for the Prohibition of the Use of 
Certain Names or Descriptions for Wine, 
Government Notice R426 of 1962  List certain names or descriptions of wine  which are not to be used as names of 
South African wines and prohibit the sale in  South Africa of any wine bearing those 
names and descriptions, if not originating in France 
a No specific act has yet been passed on GIs but Sections 12 of  the Liquor Products Act (No. 60 of 1989), 6 and 7 of the 
 Merchandise Marks Act (No. 17 of 1941), and 42 and 43 of the Trade Marks Act (No. 194 of 1993), may, where 
 appropriate, be of use.  
Source:  WTO document IP/N/1/ZAF/1, 16 April 1996;  WIPO onlin e information, "Collection of Laws for Electronic 
 Access (CLEA)".  Viewed at:  http:/ /www.wipo.int/clea/en/;  Companies and In tellectual Proper ty Registration 
 Office online information, "Acts and Notices".  Viewed  at:  http://www.cipro.co.z a/2/home/;  South African 
 Government Information online, "Documents".   Viewed at:  http://www.info.gov.za/view/
 DynamicAction?pageid=528;  and information provided by the South African authorities.   SACU-South Africa   WT/TPR/S/222/ZAF 
 Page 327 
 
 
(a) Patents 
159. Under the Patents Act (No. 57) of 1978 (amende d in 1998), patents of invention are granted 
for 20 years from the date of filing, subject to pa yment of the prescribed renewal fees by the patentee 
concerned or an agent after the third year;  there is  no extension.  Patents are granted for any invention 
involving an inventive step capable of being used or applied in trade, industry or agriculture.  Patent 
applications are examined for novelty.  Patents of  addition are granted for the remaining duration of 
the patent of invention.  
160. Applications and specifications for patents must be made through South African patent 
attorneys.  The registrar examines the application and, if found in compliance, the applicant must 
publish the acceptance in the Patent Journal  for a three-month period of opposition.  If there are no 
objections, the patent becomes effective.   
161. For the duration of the patent, the patentee has the right to exclude other persons from 
making, using, exercising, disposing or importing the patented invention.139  Parallel imports are not 
allowed in South Africa.140  If a patentee does not work the patent  within three years of grant (or four 
years from application date, whichever is later), a compulsory licence may be ordered.  There have 
been no applications for or granting of co mpulsory licences during the review period.  
162. As a signatory of the Paris Convention, South Africa gives any person filing for a patent in 
another member nation a one-year priority (from the original registration date) for filing in 
South Africa.  South Africa also accepts patents file d under the international provisions of the Patent 
Cooperation Treaty.  
(b) Designs 
163. Designs are protected in South Africa under the D esigns Act (No. 195) of 1993.  A registered 
design, either aesthetic or functional, relates to th e shape or appearance of an article irrespective of 
whether it is patentable.  Aesthetic designs are requ ired to be new and original.  Functional designs 
are subject to a novelty examination.  The Act also  allows for protection of designers of functional 
circuits.   Protection is granted for 15 years for aesthetic designs and 10 years for functional designs, 
from the date of registration or issue, whichever is earlier. 
(c) Trade marks 
164. South Africa enacted its current trade mark law in 1993 (effective May 1995).  Trade marks 
registered under this Act are granted for ten year s and may be renewed indefinitely for ten-year 
periods.  The law also protects internationally r ecognized trade marks.  Trade marks are classified 
according to international standards.  Applications are published in the Patent Journal  for a three-
month period of opposition.   
165. For ownership claims to be valid, trade mark s must be accepted by the Trademarks Office in 
Pretoria in order for ownership claims to succeed.  The mark must be distinctive or capable of becoming distinctive;  it cannot be a generic term or graph depiction.  The applicant also must use or 
intend to use the mark to be considered for registra tion.  There is a trade mark registration fee and a 
                                                           
139 As from 9 February 2007, businesses selling grey or parallel imports will have to disclose this to 
consumers.  This is in accordance with a regulation signed by the Minister of Trade and Industry signed after 
recommendations by the Consumer Affairs Committee.  Th e regulation is in accordance with section 12(6) of 
the Consumer Affairs (Unfair Business Practices) Act No. 71 of 1988 (Trade Law Chambers online information, 
"Disclosure of Grey or Parallel imports required", 15 February 2007.  Viewed at: 
http://www.internationaltrad elaw.co.za/archives/101-disclosure-of -grey-or-parallel-imports-required-  
140 Information provided by the authorities.   WT/TPR/S/222/ZAF Trade Policy Review 
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 renewal fee.  A mark can be removed from the register  if it is not used for a period of five years, the 
individual owner dies or the company owning the mark is liquidated.  The mark can also be removed if the entry was made "without sufficient cause" (e .g. the applicant registered the mark without 
intending to use it).  
166. There is no specific legislation to protect geogra phical indications (GIs).  GIs continue to be 
protected under the Trade Marks Act, the Me rchandise Act, and the Liquor Products Act 
(Table III.10).  GIs may be registered in the form of collective trade marks or of certification trade 
marks and thus be protected in South Africa.   
(d) Copyright 
167. Literary, musical and artistic works, cine matographic films, and sound recordings are 
protected under, inter alia , the Copyright Act of 1978 and its 2002 amendment
141, which appear to be 
based on the provisions of the Berne Convention.  The Act was amended in 1992 to include computer 
software, although software is not protected as "litera ry work".  Software is protected under the Patent 
Act of 1978. 
168. Copyright ownership is granted automatically wh en the work is published.  There are no legal 
or administrative processes to obtain copyrights.  F ilms are the only work that require registration.  
The registration provides proof in case of copyright  infringement, but provides no additional rights.  
Copyright protection for literary, musical, and artistic  works extends for the life of the author, plus 
50 years.  For computer software, films, photograp hs, and sound recordings, protection extends for 
50 years from when the work is publicly released .  Protection for performers is for 20 years, 
non-renewable. 
(e) Enforcement142 
169. The Counterfeit Goods Act (Act No. 37 of 199 7), the Trade Marks Act (Act No. 194 of 
1993), the Intellectual Property Laws Amendmen t Act (Act No. 38 of 1997), the Copyright 
Amendment Act (Act No. 9 of 2002), and the Patent s Act (No. 57 of 1978) as amended, provides the 
legislative framework for sanctions  for the various IPR offences. 
170. The Counterfeit Goods Act introduced measures aimed at preventing trade and 
commercialization of counterfeit goods.  It allows  the Commissioner for Customs and Excise, upon 
application by the property right owner, to seize a nd detain counterfeit goods or  suspected counterfeit 
goods imported into South Africa. 
171. The fines and penal sanctions remained uncha nged since the last Review of SACU:  a 
maximum fine for first time violations of R 5,000 pe r item and/or imprisonment for three years;  and 
the maximum fine for second time offences is R 10,00 0 and/or imprisonment for five years.  Civil 
suits for damages may also be brought.  The Copyright Act (Act No. 98 of 1978) also provides for 
similar penalties for copyright infringement.  
172. The authorities consider that the infringement of IPRs results in losses in economic activity, 
jobs, and tax revenue.  During 20 01-05, more than 20 million suspect ed counterfeit items with an 
estimated value of R 1 billion were seized by  law enforcement agencies in South Africa. 
                                                           
141 Copyright Amendment Act (Act No. 9 of 2002) (South African Government Information online, 
"Documents:  Acts".  Viewed at:  http:// www.info.gov.za/view/DynamicAction?pageid=528. 
142 The section is based on WIPO document WIPO/ACE/3/8/Rev, "Submission from South Africa", 
11 May 2006.  Viewed at:  h ttp://www.wipo.in t/edocs/mdocs/enforcement/en/ wipo_ace_3/wipo_ace_3_8_ 
rev.doc [20 February 2009]. SACU-South Africa   WT/TPR/S/222/ZAF 
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173. The Office of Company and Intellectual Propert y Enforcement (OCIPE), under the DTI, is in 
charge of IPR enforcement.  OCIPE is res ponsible for education and capacity building,  
investigations, monitoring, and following complaints .  OCIPE has inspectors to monitor enforcement.  
However, according to the authorities, since counterfeit products are mostly imported, the 
South African Revenue Services (SARS) Customs o fficials play a significant role in keeping the 
counterfeits from entering South Africa.  IPR holders may also approach the DTI, South African Police Service (SAPS) or SARS Customs officials fo r assistance if their rights have been infringed. 
174. Education (e.g. training and capacity building), in cluding of the judiciary, customs, and police 
officials, on IP matters is one of OCIPE's major tasks.  Hence, even though South Africa does not 
have a dedicated court to hear IP-related cases, some  judges have developed expertise in this area.  
OCIPE publishes training manuals, brochures and pa mphlets for public dissemination, and holds 
regular workshops and information sessions to di sseminate information on IPR issues.  The aim of 
these seminars is to curb the demand for c ounterfeited goods and hence discourage supply. WT/TPR/S/222/ZAF Trade Policy Review 
Page 330 
 
 
 IV. TRADE POLICIES BY SECTOR 
(1) INTRODUCTION  
175. South Africa's economy is relatively diversif ied, with services and manufacturing accounting 
for 65.6% and 15.9% of GDP, respectively.  Despite its modest contribution to GDP (2.6% in 2008), agriculture remains important b ecause it absorbs a significant shar e of the unskilled workforce.  
However, the importance of agriculture in the overa ll economy, including in trade, has declined since 
the previous Review.  State involvement in agricultu ral markets has declined.  Agriculture imports are 
subject to a complex tariff structure, with e xport products benefiting from higher than average 
protection. 
176. The contribution of manufacturing to GDP rema ined stable during the period under review, 
despite a decline from 17.2% in 2002 to 15.9% in 20 08.  However, as in the case of agriculture, the 
share of manufacturing exports and imports in tota l merchandise trade declined.  State intervention in 
the manufacturing sector remains important.  A wide range of incentive schemes continue to benefit manufacturing.  These include general incentive schemes and industry-specific programmes (e.g. automotive, and textile and clot hing), innovation, and research;  some schemes are contingent on 
export performance.  As a result of these policies, wh ich have led to a misallocation of resources, the 
profitability of South Africa's ma nufacturing sector has been low, which in turn has led to low 
investment, low output and poor export and employm ent performance.  The high cost of inputs and 
intermediate goods, has also been identified as a ke y constraint to the development of manufacturing 
in South Africa.  This is partly due to the l ack of competition in a number of key intermediate 
industries, hence the importance of competition policy in South Africa. 
177. State remains very active in the mining and ener gy sector with several SOEs operating in both 
subsectors.  Mining accounted for 5% of GDP in 2007 but contributed to 39.9% of South Africa's total merchandise exports despite the electricity-re lated production interruptions in the mining sector.  
Electricity in South Africa is supplied by a state- owned enterprise (Eskom).  South Africa's recent 
strong economic growth, rapid industrialization, a nd mass electrification programme have contributed 
to an increase in the demand for electricity.  Howeve r, the lack of investment in electricity generation 
capacity has left Eskom unable to meet demand;  this  has led to electricity shortages characterized by 
severe power cuts since 2007.  The shortage of el ectricity has had an impact on the economy as 
whole, most strongly in the mining sector.   
178. Services (including construction) contributed 65% to South Africa's GDP in 2007, up from 
63.1% in 2003.  Growth in 2008 reflected further ex pansion in telecommunications, financial services, 
construction, and wholesale, catering, and accommoda tion ahead of the 2010 World Cup.  Travel 
(tourism) has dominated services exports denoting the country's important endowments as a tourist 
attraction, while transportation was the main import, reflecting long distances from key markets.  More efficient services delivery is a government prio rity;  however, considerable state intervention 
renders supply of key services inefficient and costly .  Notwithstanding the limitations inscribed in 
South Africa's WTO GATS schedule, services liberalizati on is considered important to attract foreign 
investment and develop infrastructure.  However, this  has not yet been translated into any decisions to 
further open services subsectors. 
(2) A
GRICULTURE  
179. South Africa's agricultural potential is limited;  conditions for agricultural production are not 
favourable in most regions due to po or land quality, scarcity of water143, and highly variable climatic 
                                                           
143 Almost 50% of South Africa's water is used for agricultural purposes (Government Communication 
and Information System, 2008). SACU-South Africa   WT/TPR/S/222/ZAF 
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conditions.144  Nevertheless, agriculture is well diversifie d.  South Africa has used its scarce arable 
land to produce high value crops such as grapes, fruit,  and nuts, and non-arable agricultural land has 
been devoted to sheep and cattle farming in add ition to wildlife tourism, and conservation.   
180. South African agriculture is dualistic:  a deve loped commercial sector, occupying 86% of the 
agricultural land, co-exists with large numbers of  subsistence (communal) farms.  The commercial 
sector is capital-intensive, using hired labour, an d strongly linked to global markets, while the 
small-scale farmers still have limited access to ma rkets as they do not have their own means of 
transport or storage facilities.  In addition, small farmers lack information and are not well organized.  
In order to integrate small farmers, South A frica has embarked on a land reform programme and 
several other programmes to support the disadvant aged farming communities;  some have been 
developed within the framework of the Agricu ltural Broad Based Black Economic Empowerment 
(AgriBEE).  In 2007, the draft AgriBEE Charter was fi nalized and approved by the Minister in charge 
of agriculture.  AgriBEE was developed in accordance with the Broad Based Black Economic Empowerment Act, Act No 53 of 2003 and was la unched in 2008.  AgriBEE was designed after 
consultations with the various stakeholders and st rives to promote equitable access and participation 
of black people in the agriculture sector. 
181. Land reform is a fundamental element of Sout h Africa's agricultural policy. The Land Reform 
Programme consists of three main schemes:  r estitution of land unjustly taken from people and 
communities, land redistribution, and land tenure reform.  The authorities deem that small farmers are likely to care more about preserving productivity, c ontrolling soil and water erosion, and reducing 
pollution if they have full ownership of the land.   Moreover, weak land-use rights have an adverse 
effect on investment and the development of a rural credit system. 
182. The importance of agriculture in the overall ec onomy has declined.  Its contribution to GDP 
during the review period was around 2.5%, but it account s for 8.9% of total employment.  Thus, it is 
an important sector in terms of employment and as a source of foreign exchange, accounting for 9.5% 
of total exports in 2008.  In 2008, field crops accounted for 31.4% of total agricultural production, 
while livestock contributed 45% (Table IV.1).  So uth Africa's agriculture is increasingly export 
oriented;  about 40% of total production is exported. 
183. The sector is well diversified.  The most importa nt products are sugar cane, followed by field 
crops such as maize and wheat.  The country has tr aditionally been a net exporter of maize and sugar, 
and a net importer of wheat.  Horticultural pr oduction consists of all the major fruit groups 
(deciduous, citrus, and subtropical), vegetables, and flowers.  The major categories of fruit produced 
are citrus fruits (mainly oranges), apples, pears, peaches, table grapes, and avocados.  During the period under review, fruit production, was the most dynamic sub-sector with a large share of total output exported, mainly to Europe.  Some 83% of  table grapes production are exported, while 61% of 
citrus production and 44% of apples are exported.  Although horticulture is e xpanding, it still occupies 
a relatively small share of arable land.   However, it is labour-intensive.  
184. Livestock remains the most important categor y of agricultural production (Table IV.1);  
poultry meat, beef, milk, and dairy are the major component.  There are two main patterns of livestock production:  extensive and intensive.  The extens ive production of cattle, shee p, and goats takes place 
on the pasture land in the arid and semi-arid areas;  the southern and western interior (semi-arid area) 
is suitable for extensive production (sheep, cattle).  Intensive livestock farming (dairy, poultry, and 
pork production) is in the arable areas, generally  closer to the major metropolitan markets or on the 
                                                           
144 The country can be subdivided into a number of  farming regions according to climate, natural 
vegetation, types of soil, and the type of farming practised (Government Communication and Information System, 2008). WT/TPR/S/222/ZAF Trade Policy Review 
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 coast, where access to imported feed is easier.  South Africa is a net importer of meat, mostly 
originating in Botswana and Namibia. 
Table IV.1 
Selected indicators in agriculture, 2002-08 
 2002 2003 2004 2005 2006 2007 2008 
Share of real GDP (agriculture, forestry, and fishing) 
(%) 4.2 3.7 3.2 2.8 2.9 3.2 3.4 
Percentage change in value added (agriculture, forestry, 
and fishing) (%) 6.5 -2.1 1.4 5.4 -7.2 2.9 18.8 
Workers (agriculture, hunting, forestry, and fishing) 
('000) 1,420 1,212 1,063 925 1,088 1,041 ..  
Skilled agriculture ('000) 706 341 329 302 432 341 ..  
Producer prices (2000 = 100) 130.2 124.0 122.7 116.9 135 164 ..  
Agriculture imports (% of total merchandise imports) 6.5 6.4 6.2 5.5 5.3 6.1 6.1 
Agriculture exports (% of total merchandise exports) 14.5 13.4 11.6 11.2 9.4 8.7 9.5 
Gross value of agricultura l production (R million) 68,367 72,714 72,147 71,264 75, 486 91,409 120,155 
Fields crops 27,258 23,072 20,519 17,769 18,152 23,471 39,922 
Horticulture 15,971 19,622 21,614 20,630 20,087 23,013 27,097 
Animal production 25,138 30,020 31,014 32,866 37,247 44,926 53,136 
Share in agriculture production (%)        
Fields crops 39.9 31.7 28.4 24.9 24.0 25.7 33.2 
Horticulture 23.4 27.0 30.0 28.9 26.6 25.2 22.6 
Livestock 36.8 41.3 43.0 46.1 49.3 49.1 44.2 
Production of selected products (t '000)         
Sugar cane 21,157 23,013 20,419 19,095 21,052 20,278 19,724 
Maize 10,076 9,705 9,737 11,749 6,947 7,339 13,164a 
Wheat 2,438 1,547 1,687 1,913 2,114 1,913 2,031a 
Potatoes 1,647 1,496 1,785 1,787 1,719 1,946 1,853a 
Grapes 1,494 1,643 1,762 1,550 1,757 1,813 1,792a 
Imports of selected products (t '000)        
Sugar ..  .. .. .. .. .. .. 
Maize 1,044 499 596 81 1,044 ..  .. 
Wheat 685 722 1,192 1,271 973 ..  .. 
Potatoes 456 483 3 30 119 ..  .. 
Table grapes 0 0 1 1 1 ..  .. 
Exports of selected products (t '000)        
Sugar 1,321 1,167 1,286 1,597 2,960 1,169 ..  
Maize 1,335 1,188 1,185 832 2,237 597 529a 
Wheat 149 179 158 158 111 211 223a 
Potatoes 27 28 30 21 31 ..  .. 
Grapes 197 210 239 210 241 237 225a 
.. Not available. 
a Preliminary. 
Source :  Department of Agriculture (2008), Economic Review of the South African Agriculture .  Viewed at: 
 http://www.doa.agric.za/;  Department of Agriculture (2009), Abstracts Agriculture Statistics .  Viewed at:  
 http://www.doa.agric.za/;  and FAOS TAT online information.  Viewed at:  http://faostat.fao.org/site/345/ 
 default.aspx. 
185. South Africa has historically had a comparative advantage in agriculture products.  However, 
the relative importance of trade in agricultural produc ts has declined, with the discovery of the large 
endowments of precious stones and metals (Table IV .1).  Nevertheless, South Africa's agri-food 
sector is increasingly integrated with world markets and South Africa is a net exporter of agricultural 
products.  The agri-food sector is increasingly e xport oriented, and South Africa is amongst the SACU-South Africa   WT/TPR/S/222/ZAF 
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world's leading exporters of agri-food products (e.g. wine, fresh fruits, and sugar).  However, 
improving market access remains one of South Africa's  priorities;  the EC is the destination for a 
major share of its key exports.   
Policy objectives and administration 
186. The Department of Agriculture and the Departme nt of Land Affairs, with the assistance of the 
Departments of Water Affairs and Forestry, Enviro nmental Affairs, and Trade and Industry are the 
main institutions in charge of formulating and implementing agricultural policy, and regulating the 
sector.  Other institutions involved in the sector in clude the Agricultural Research Council (ARC), the 
National Agricultural Marketing Council (NAMC), a nd financial institutions such as the Land and 
Agricultural Bank (Land Bank) and the Deve lopment Bank of South Africa (DBSA).   
187. In addition, various government departments (D epartment of Agriculture  and Department of 
Health) set and enforce sanitary and phytosanitary regulations, which affect trade in agricultural 
products (Chapter III(2)(iv)).  The South African Bu reau of Standards (SABS) is also involved in 
setting SPS regulation. 
188. The agriculture sector is regulated by a number of laws and regulations  (Table IV.2), while 
specific laws regulate sanitary and phytosanitary me asures (Table III.5).  The principal legislation on 
agriculture is the Marketing of Agricultural Products  Act (Act No. 47 of 1996 as amended), aimed at, 
inter alia,  improving market access and promoting agricu ltural exports.  The introduction of this law 
resulted in a significant reduction of state involvement  in agricultural markets.  Nevertheless, the law 
still designates guideline prices for, inter alia , grapes intended for production of wine, grape juice, 
drinking wine, distilled wines and wine spirit, and export wines145;  milk and other dairy products146;  
and cotton lint.147   However, according to the authorities, these prices are calculated for every product 
subject to a levy, are for administrative purposes onl y, and have no effect on the market price.  
189. The main agricultural policy objectives were outlined in the White Paper on Agriculture 
(1995), and later restated in the Strategic Plan  for South African Agriculture (2001), and more 
recently in the Department of Agriculture's annual strategic plans.148  South Africa's main objective in 
agriculture is to create an efficient and intern ationally competitive sector that contributes to the 
objectives of the Growth, Employment and Redist ribution (GEAR) Strategy, aimed at increasing 
economic growth by reducing income inequality and eliminating  poverty.  Other agricultural policy 
objectives include the emergence of small and medium-sized farms, food security149, food safety, and 
environmental protection.150 
                                                           
145 Marketing of Agricultural Products Act (Act No. 47 of 1996):  Wine industry:  Establishment of 
Statutory Measure and Determin ation of Guideline Prices ( Government Gazette  No. 28188, 31 October 2005). 
146 Marketing of Agricultural Products Act (Act No. 47 of 1996):  Establishment of Levies on Milk and 
Other Dairy Products and the Determination of Guidelin e Prices in respect of Milk and Other Dairy Products 
(Government Gazette  No. 28329, 23 December 2005). 
147 Marketing of Agricultural Products Act (Act No. 47 of 1996):  Establishment of Statutory Measure 
and Determination of Guideline Prices:  Levy relating to Cotton Lint ( Government Gazette No. 30925, 
4 April 2008). 
148 For instance see Department of Agriculture ( 2007);  and Department of Agricultural (2008). 
149 The Integrated Food Security and Nutrition Programme (IFSNP) aims to achieve physical, social 
and economic access to safe and nutritio us food for all South Africans. It s goal is to eradicate hunger, 
malnutrition and food insecurity by 2015 (Government Communication and Information System, 2008). 
150 Department of Agriculture (2008);  and Government Communication and Information System 
(2008). WT/TPR/S/222/ZAF Trade Policy Review 
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 Table IV.2 
Selected legislation on agriculture, 2009 
Legislation Act No. Description 
Agricultural Credit Amendment Act 65 of 1995 Provides for assi stance to persons carrying on, or undertaking to carry on, 
farming operations, and for the c ontrol of the assistance rendered 
Marketing Amendment Act 188 of 1993 Provides for the in troduction of a control system for the marketing of 
agricultural products;  regulates quantitativ e controls over the import or export 
of these products 
Marketing of Agricultural Products Act  47 of 1996 Establishes and enforces regulatory measures to intervene in the marketing of 
agricultural products, including the introduction of levies on agricultural products;  establishes a National Agricultural Marketing Council 
Wine and Spirit Control Amendment Act  25 of 1998 Regulates the control and manageme nt of the wine and spirit industry by the 
Kooperatieve Wijnbouwers Vereniging van Zuid-Afrika (KWV) 
Subdivision of Agricultural Land Act  70 of 1970 Regulates the s ubdivision of agricultural land and its use for purposes other than 
agriculture  
Livestock Improvement Amendment 
Act  60 of 1997 Regulates the collection and sa le of semen and ova, and the artificial 
insemination and inoculation of certain an imals;  the establishment of a system 
for the evaluation and certification of the performance of certain animals, 
quality control with regard to the import  and export of certain animals, semen, 
ova, and eggs;  and the incorporation of  livestock breeders' societies and the 
maintenance of the legal personality of livestock breeders' societies, and the 
granting of certain exclusive powers relati ng to the registration of pedigrees of 
certain livestock to the South African Stud Book and Livestock Improvement 
Association (SASBLIA) 
Co-operatives Act 91 of 1981 Regulates the formation, registration, management, a nd functioning of various 
types of cooperatives, and the windi ng-up and dissolution of cooperatives 
Veterinary and Para-veterinary 
Professions Act 19 of 1982 Provides for the establishment, pow ers, and functions of the South African 
Veterinary Council;  the registration of pe rsons practising veterinary and   para-
veterinary professions;  and the control over the practising of these professions 
Perishable Products Export Control 
Act 9 of 1983 Provides for the control of peri shable products intended for export from 
South Africa and the continued existence of  a statutory board to bring about the 
orderly and efficient export of peri shable products from South Africa 
Agricultural Research Amendment 
Act 27 of 2001 Establishes the Agricultural Rese arch Council (ARC) to undertake agricultural 
research;  regulates matters with regard  to ARC's proceedings, powers, duties, 
management, control, employees, financing, and related matters 
Agricultural Produce Agents 
Amendment Act 47 of 2003 Provides for the establishment of  an Agricultural Produce Agents Council and 
fidelity funds in respect of  agricultural produce agents, and the control of certain 
activities of agricultu ral produce agents 
South African Abattoir Corporation 
Act Repeal Act 17 of 2005 Provides for the privatization of  the South African Abattoir Corporation 
Agricultural Development Fund Act 175 of 1993 Provides for the esta blishment of, and control over, an agricultural development 
fund for the handling of money received for development 
Source:  South African Government Information online.  View ed at:  http://www.info. gov.za/;  KwaZulu-Natal's 
 Department of Agriculture and Environmental A ffairs "Agricultural Legislation".  Viewed at:  
 http://agriculture.kzntl.gov.za/porta l/Portals/0/Legal%20Servi ces/agricultural%20legislation.pdf [27 May 2009];  
 and information provided by th e South African authorities.   
190. South Africa's agricultural policies have not cha nged substantially since the previous review 
of SACU in 2003.  However, government interventi on appears to have decreased further with the 
partial liberalization of the sugar market.  While the tariff remains the main trade policy instrument, 
the strict SPS requirements on agricultural products app ear to have become the major barrier to trade, 
as most agricultural goods are subject to quality sta ndards (Table III.6) or technical regulations.  
Import prohibitions and controls c ontinue to be maintained on, inter alia , technical, sanitary, and 
phytosanitary grounds;  imports subject to contro l measures include live plants and animals and 
products thereof.   
191. According to the authorities, most standards and technical regulations conform, or are in close 
conformity with international standa rds.  Furthermore, the Department  of Agriculture, noted  that the 
opening of markets and trade in regulated agricultu ral products has increased the possibility of illegal SACU-South Africa   WT/TPR/S/222/ZAF 
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importation of agricultural products  (i.e. products not complying with SPS regulations), as well as the 
risk of introducing various diseases and pests into South Africa.  Hence, since 2006 the Government 
has focussed on improving the surveillance systems to monitor animal and plant diseases effectively 
in order to minimize the risks associated with disease outbreaks.151  
192. Tariff protection on agriculture, hunting, forestry, and fishing (ISIC Rev.2, 1) stood at 3.7%, 
down from 5.5% in 2002, with tariffs ranging from zero to 44%.  Both ad valorem  and specific tariffs 
(or a combination of both) are applied to agricu lture and agro-food products, however, most tariff 
lines 97.2% bear ad valorem  duties.  Variable (formula) duties are still levied on corn-flour, preserved 
tomatoes, cherries, and two kinds of tobacco (Main Report, Chapter III).152  Manufactured food, 
beverages and tobacco (ISIC Rev.2, 31) still benef it from higher than average tariff protection in 2008 
(12.3%) compared to the overall MFN simple average of 8.1%. 
193. The level of protection for main agricultural products varies considerably.  Some of the 
lowest tariffs of zero, and zero to 2% apply to  maize (HS 1005), and wheat (HS 1001), respectively, 
which are the staples in South Africa.  Maize is the most important crop in terms of production and 
consumption; it is the main source of carbohyd rates for humans, and the main feedstock in 
South Africa.  This pattern of protection seems to  reflect South Africa's policy of attaining food 
security both through adequate domestic supply and th rough imports.  However, the varied levels of 
tariff protection across commodities is a potential  source of distortion.  For instance, other 
traditionally highly protected agricultural commoditi es, such as sugar and confectionary sugar (HS27 
with tariffs ranging from zero to 37%) and tobacco (with an average protection of 35.4% and duties 
ranging from zero to 45%), continue to bear higher than  average protection.  Fr uits and vegetable, two 
major export products, also benefit from higher than av erage protection;  the av erage for fruits is 6.6% 
(HS 08), while that for vegetables (HS 07) is 10.5%.   
194. The same pattern of protection applies to livest ock and its related produc ts.  Live animals are 
imported duty free, while import tariffs for meat and edible meat offal range to 43.7%.  Dairy 
products are mostly subject to specific tariffs with ad valorem  equivalents well above the average 
agricultural tariff level, at 24.8% (ISIC 3112). 
195. Tariff quotas apply to agricultural products (3.1% of all tariff lines, i.e. 206 tariff lines at the 
HS eight-digit level), and cover, inter alia , animal products, potatoes, vegetables, fruits, cereals, 
coffee, tea, oil seeds, sugar, food preparations, wine  and spirits, vinegar, tob acco, and cotton.  Initial 
quotas are expected to increase for, inter alia , meat of sheep, fresh milk and cream, cheese, eggs, 
certain cereals, potatoes, and sugar.  The quotas are to  be filled at a maximum (in-quota) tariff rate of 
20% of the out-of-quota rates.  The preferential ag reement concluded with EFTA includes preferential 
tariff quotas covering animals and animal products, dairy products, live plants and cut flowers, 
vegetables and fruits, spices, cereals, and sugar.153  Preferential tariff quotas apply to exports of 
textiles, clothing, and sugar from the MMTZ to SACU countries.154   
196. South Africa levies VAT on domestically produc ed and imported agricultural goods at a 
standard rate of 14%.  Certain basic foodstuffs (e.g. brown bread, maize meal, eggs, milk, fruit, and 
vegetables), including their exports, are zero-rated.   Specific levies apply on certain agricultural 
                                                           
151 Department of Agriculture (2007). 
152 Corn-flour (ISIC 3116), preserved tomatoes (ISIC 3113), cherries (ISIC 3119), and two kinds of 
tobacco (ISIC 1110). 
153 For more details, see the Agricultural Agreem ent between the SACU States and Switzerland 
(WorldTradeLaw online in formation.  Viewed at:  http://www .worldtradelaw.net/fta/agreements/ 
SACU_EFTA_Switz.pdf [26 March 2009]). 
154 The MMTZ comprises Malawi, Mozambique, Tanzania, and Zambia. WT/TPR/S/222/ZAF Trade Policy Review 
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 products and are collected at the first point of  sale by the various agricultural associations 
(Table IV.3);  they are used to fund different activities.  Imports and domestically produced dairy 
products, potatoes, red meat, and sorghum are subject  to levies at the same rate;  the only export 
subject to levies is bulk wine.  Under the Marketi ng of Agricultural Products Act (Act No. 47 of 
1996) guideline prices are determined for all products  on which levies are applicable.  These prices 
are for administrative purposes and to ensure the le vy does not exceed 5% of the actual price.  The 
guideline price is the average price at the first point of sale and has no impact on the market price.  
Table IV.3 
Agricultural levies, 2009 
Product Rate on domestic products  (excluding VAT) Rate on imports  
Citrus (export) R 0.0213/kg n.a. 
Cotton lint R 0.20/kg n.a. 
Dairy products  R 0.0114/litre R 0.0114/litre 
Deciduous fruit   
Pome fruit   
Apples (export) R 30/tonne n.a. 
Apples (processed) R 6/tonne n.a. 
Pears R 30/tonne n.a. 
Stone fruit   
Apricots R 110/tonne n.a. 
Peaches and nectarines R 75/tonne n.a. 
Plums (export) R 95/tonne n.a. 
Plums (local) R 65/tonne n.a. 
Table grapes R 50/tonne n.a. 
Dried fruit (average) R 0.06/kg n.a. 
Potato R 0.013/kg R 0.013/kg 
Red meat   
Cattle R 5/head R 5/head 
Sheep and goats R 0.75/head R 0.75/head 
Pigs R 5.20/head R 5.20/head 
Sorghum R 7.70/tonne R 7.70/tonne 
Wine   
Information   
Grapes R 8.75/tonne n.a. 
Grape juice R 0.0125/litre n.a. 
Drinking wine R 0.0125/litre n.a. 
Research   
Grapes R 12.46 /tonne n.a. 
Grape juice R 0.0178/litre n.a. 
Drinking wine  R 0.0178/litre n.a. 
Distilling wine R 0.0154/litre n.a. 
Export promotion   
Export bulk wine R 0.0639/litre n.a. 
Other R 0.0877/litre n.a. 
Transformation   
Grapes R 2.12/tonne n.a. 
Grape juice R 0.003/litre n.a. 
Drinking wine R 0.003/litre n.a. 
Winter cereal   
Wheat R 9.00/tonne n.a. 
Barley R 8.50/tonne n.a. 
Oats R 4.50/tonne n.a. 
n.a. Not applicable. 
Source:  Marketing of Agricultural Products Act (Act No. 47 of 1996) (statutory levies). SACU-South Africa   WT/TPR/S/222/ZAF 
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197. Import permits (i.e. licences) are required for prod ucts subject to tariff quotas (Table III.3).  In 
2007, the latest year for which information is ava ilable, tariff quota fill ratios varied substantially;  
some quotas were filled 100% while others, on potato es, eggs, and milk showed very low fill ratios 
(Table III.3).155  In some cases, applied duty rates are be low or close to in-quot a rates, hence the low 
in-quota imports.  Non-tariff import controls consist mainly of sanita ry and phytosanitary measures.  
South Africa has retained the right to use th e special safeguard under Article 5 of the WTO 
Agreement on Agriculture, but this has never been  invoked.  
198. South Africa notified to the WTO that during 2002-05 it did not subsidize its exports of 
agricultural goods.156  According to the authorities this has not changed.  Exporters of agricultural 
products are entitled to duty rebates and some agri cultural exports are zero rated;  however, some 
export levies are still in place for wine.  
199. Direct government intervention on domestic markets was reduced during the period under 
review.  Nevertheless, the sugar market remains regulated.  The South African Sugar Association (SASA) no longer has statutory marketing powers, and is no longer the sole s ugar exporter.  However, 
the Sugar Agreement of 2000 is still in force;  it stipulates that raw sugar can be exported only 
through a single channel and allocates quotas to i ndividual producers for sugar sold on the domestic 
market.
157  The domestic price is above world market prices because of the quota system and border 
protection.  This system is implicitly taxing th e South African sugar consumers and subsidizing 
exporters. 
200. Guideline prices are, inter alia , set for grapes and grape jui ce concentrate intended for the 
production of wine, as well as for wine.  South Africa ranks among the world's top ten exporters of 
grape wines.  Exports have been growing rapidly since the mid-1990s, becoming the country's leading agri-food export item, earning US$3.5 billion in 2003-08.
158  Export levies are payable on the final 
product (wine).159 
201. Wine is subject to a generic export promotion levy (export wine levy) of R 0.0639 per litre for 
bulk wine and R 0.0877 for bottled wine;  it is also subject to information, research, and 
transformation levies (Chapter III).  These levies are paid by wine and grape juice producers to 
various organizations, including to the South Af rican Wine and Spirit Exporters' Association 
(SAWSEA).  They are used to promote South African wine in the global market, and to assist SMMEs and BEEs to gather informati on and do research on the wine industry.
160 
202. The domestic support measures notified by South Africa in 2008 were for calendar year 2005 
and relate to "green box" measures.161  According to the authorities, th is situation has not changed.  
The major areas of public support are research and de velopment, education and training, inspection 
and control, the construction of in frastructure, and domestic food aid.162  Budgetary expenditure in 
agriculture had declined up to 2001 but has since be en increased gradually but limited to "green box" 
                                                           
155 WTO documents G/AG/N/ZAF/64, 8 September 2008. 
156 WTO documents G/AG/N/ZAF/48, 7 November 2003; G/AG/N/ZAF/57, 10 March 2006, 
G/AG/N/ZAF/59, 16 January 2007;  and G/AG/N/ZAF/66, 8 September 2008. 
157 SASA online information.  Viewed at:  http://www.sasa.org.za/HomePage1.aspx. 
158 WTO Secretariat calculations, based on UNSD, Comtrade database (SITC Rev.3 data). 
159 Marketing of Agricultural Products Act (Act No. 47 of 1996),  Wine Industry:  Establishment of 
Statutory Measures and Determin ation of Guideline Prices ( Government Gazette  No. 28188, 1 November 2007). 
160 Marketing of Agricultural Products Act (Act No. 47 of 1996). 
161 WTO document G/AG/N/ZAF/65, 8 September 2008. 
162 OECD (2008b) WT/TPR/S/222/ZAF Trade Policy Review 
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 support, and there has been a shift in payments away from established commercial farms towards the 
small farm sector, which is emerging from the land reform. 
203. Consistent with government policy, new progr ammes have been implemented to support the 
development of "market oriented family farms"  emerging from the land reform process.  The 
Comprehensive Agricultural Support Programme (CASP)  is aimed at supporting the beneficiaries of 
the land reform willing to establish commercial farms.163  The overall goal is to provide the necessary  
services, in particular subsistence, to emerging and commercial farmers, and to ensure that the goal of 
food security for the country, and for the poor and vulnerable, is met.164  Since the implementation of 
the CASP in 2004/05, a total R 1,161 million has been allocated to the programme.  During 2004/05 
and 2007/08 some 2,460 projects supporting over 180,000 farmers were approved;  in 2008/09, 
703 projects were approved to benef it an additional 61,000 farmers.165  
204. The CASP is a complement to the Micro-Agri cultural Finance Schemes of South Africa 
(MAFISA), a state-owned scheme to provide micro a nd retail financial services  to communal farmers 
and emerging entrepreneurs.  MAFISA, launched as a pilot project in three provinces in 2005, is now 
operational in all provinces, and several fina ncial institutions participate in the scheme.   MAFISA 
provides loans at subsidized interest rates; the interest rate has been pegged at 8% since 2005.  
MAFISA funds are administered by the Land Bank166, which performs fund and treasury management 
functions on behalf of the DoA.  During 2005/06-2006 /07 the Department of Agriculture transferred a 
total of R400 million to the Land Bank to finan ce MAFISA.  To date 9,000  emerging farmers have 
received MAFISA loans and expenditure  related to the interest rate s ubsidy amounted to R 64 million. 
(3) MANUFACTURING  
205. The contribution of manufacturing to GDP rema ined stable during the period under review, 
despite a decline from 17.2% in 2002 to 15.9% in 2008 (Table I.1).  However, in recent months the 
sector has been affected by the global downturn.  The share of manufacturing exports and imports in 
total merchandise trade declined from 61.2% to 51 .5% and from 69.5% to 61.5%, respectively, in 
2002 and 2008.167  The authorities attribute the decrease in ex ports to the appreciation of the currency, 
and thus estimate that coherence between macroec onomic and industrial policies are critical for the 
country to continue its process of industrialization.168 
206. State intervention in the manufacturing sector remains substantial.  Incentives are one of 
South Africa's key industrial policy instruments:  a wide range of schemes continue to benefit 
manufacturing (Table AIII.4).  These include gene ral incentive schemes and st ructural adjustment 
programmes for specific industries (e.g. automotiv e, and textile and clot hing), innovation, and 
research.   
207. The industries actively supported by the Government since 1994, such as the automotive, 
carbon and stainless steel, and the textiles and clothing, have become South Africa's most important industries.  The automotive sector is the leading manufacturing sector, predominantly because of the 
                                                           
163 Department of Agricultural (2007). 
164 The CASP has several pillars:  information management;  technical and advisory assistance;  
training and capacity building;  marketing and business development;  supply of on-farm and off-farm 
infrastructure and  inputs;  and financial assistance. 
165 Government Communication and Information System (2008). 
166 The Land Bank operates as a development-finance institution within the agricultural and 
agri-business sectors;  it is regulated by the Land and Agricultural Development Bank Act (Act No. 15 of 2002). 
167 WTO Secretariat calculations, based on UNSD, Comtrade database (SITC Rev.3 data). 
168 Department of Trade and Industry (undated a). SACU-South Africa   WT/TPR/S/222/ZAF 
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incentives provided through the Motor Industry Deve lopment Programme (MIDP) (see below).  A 
range of resource-processing industries, incl uding carbon and stainless steel, chemicals and 
aluminium, have been supported by various tax in struments and other state support, while the textiles 
and clothing sector has benefited from the Duty Cred it Certificate Scheme.  However, this type of 
support is not sustainable and has not rendered the industry competitive.169  It appears that no 
evaluation has been made of these schemes. 
208. As a result of these policies, which have led to a misallocation of resources, South Africa's 
industrial sector has shown low profitability, which in turn has led to low investment, low output, and poor export and employment performance.  Other fa ctors that have hindered the sector's development 
include:  the monopolistic pricing of key intermed iate inputs into the manufacturing sector;  a 
relatively small market, coupled with relatively co stly and unreliable infrastructure and logistics 
systems, particularly freight and commuter transport and irregular supply of electricity and water;  an 
inadequate supply of skilled labour;  high reliance on imported inputs;  and "inadequate" state support 
for investment, upgrading, innovation, and technology.
170 
209. In order to overcome these constraints, the National Industrial Policy Framework (NIPF), was 
adopted in 2007.171  The NIPF sets out broad policies in the context of the Accelerated and Shared 
Growth Initiative for South Africa (ASGI-SA) with the aim of halving unemployment and poverty by 
2014 through accelerated growth of at least 6% as of 2010.172  The main objectives of the NIPF are:  
to diversify production so as to diminish the cu rrent reliance on traditional commodities;  move 
towards a knowledge-based economy;  and promote la bour-intensive industries with the increased 
participation of SMEs and hist orically disadvantaged people.173   
210. The high cost of inputs and intermediate goods, h as been identified as a key constraint to the 
development of the manufacturing sector in South Africa.   It is due to lack of competition in a number 
of key intermediate industries, and to import duties;   therefore, the effectiveness and enforcement of 
competition policy and law, has assumed greater impo rtance (Chapter III).  The authorities deem that 
import duties on a number of upstream products that are not strategic, from an employment point of 
view, could be removed or reduced in order to  lower input costs to downstream manufacturing.174  
The authorities note that there are ongoing case-by-case  investigations to assess whether and which 
duties should be reduced. 
211. Tariff protection in the sector (ISIC 3) has continued to decrease since the previous TPR of 
SACU (from 11.8% in 2002 to 8.5% in 2008)175, but protection remains slightly higher than the 
overall average (8.1% in 2008) with tariffs (including the ad valorem components) ranging from 0 to 
96% (Main Report, Table AIII.2).  Moreover, given the negative impact of the global downturn on its 
manufacturing sector, South Africa is consider ing increasing tariffs to the bound rates.176   
212. The pattern of protection did not change subs tantially during the review period;  with a 
tendency to protect non-export-oriented industries that mainly supply the domestic market.  The 
                                                           
169 Department of Trade and Industry (2007). 
170 Department of Trade and Industry (2007). 
171 The National Industrial Policy Framework (NIPF) is implemented through the Industrial Policy 
Action Plan (IPAP)   
172 Department of Trade and Industry (2007). 
173 Department of Trade and Industry (2007);  and Department of Trade and Industry (2008a). 
174 Department of Trade and Industry (2007);  and Department of Trade and Industry (undated a). 
175 Tariff protection on manufacturing in 1997 was 15.6%. 
176 Mail and Guardian , "Zuma-ites eye higher tariff walls ", 19 May 2009.  Viewed at:  
http://www.mg.co.za/article/20 09-05-19-zumaites-eye-higher-t ariff-walls [29 May 2009]. WT/TPR/S/222/ZAF Trade Policy Review 
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 highest rate of protection continues to apply to textiles, wearing apparel, and leather industries 
(21.2%);  average MFN tariff protection for beverage s, foodstuffs, and tobacco is 12.3%, with a large 
number of products subject to rates above 60% a nd to the maximum rate of 96%;  and wood and 
wood products receive average protection of 10.8%.   Tariff protection in these industries also shows 
positive escalation (i.e. raw materials receive lower leve ls of protection than final products), which is 
consistent with South Africa's industrial policy of protecting and targeting certain "important" 
industries, such as textile and clothing, for furthe r development.  Other industries, such as motor 
vehicles (12.4%), and jewellery (8.8%), which the authorities are intent upon promoting, also have 
above-average tariff protection.   
(i) Automotive sector177 
213. The automotive industry is South Africa's lead ing manufacturing sector, contributing 7.4% to 
GDP in 2005 and directly employing some 107,981 pe ople in vehicle and component manufacturing 
in the same year.178  It is also the industry that attracts most foreign direct investment in 
manufacturing;  in 2005, FDI totalled R 3.6 billion.179  Growth in the automotive sector has had a 
positive impact on the manufacturing sector as whole because of the backward linkages.  There has 
been significant growth in the component sectors, su ch as leather seat covers, silencers, exhausts, and 
catalytic converters. 
214. The sector has developed with the support of  the Motor Industry Development Programme 
(MIDP), and the Productive Asset Allowance for the automotive industry.180  The Government 
established the MIDP in September 1995 to assist the South African automotive industry, but the 
scheme is also available in other SACU countries.   In 2002, the MIDP was extended until 2012.  
Under the MIDP, producers may obtain import rebate credit certificates (IRCCs) based on the value of exports of vehicles and components.  The I RCC may only be used to import components not 
produced in South Africa.  The nominal value of th ese certificates increases with the value of exports 
of automotive products (i.e. the certificate value is  not related to use of imported goods).  Under the 
Productive Asset Allowance, producers are granted duty credit certificates calculated as 20% of the 
value of productive assets, to be used to import vehicles or components;  however, these may not be 
re-exported. 
215. As a result of the MIDP support, from 1995 to 2006, the sector doubled its production 
capacity from 388,000 units to around 580,000 units
181, while exports of automotive products also 
increased to account for some 10.5% of total exports  in 2008.  Nevertheless, the industry continues to 
face a number of challenges, including low productivity, "insufficient" use of local components, and a 
heavy reliance on a few export markets.  In 2005, th e DTI initiated a review of the MIDP.  A revised 
MIDP, the Automotive Production and Development Programme (APDP), which will be implemented 
as of 2012182, will seek to provide industry with a reasona ble level of support in a "market neutral 
                                                           
177 This section is based on Department of Trade and Industry (2007). 
178 Latest figures available. 
179 Latest figures available. 
180 Department of Trade and Industry online information, "Productive Asset Allowance".  Viewed at: 
http://www.thedti.gov.za/offerings/offering.a sp?offeringid=216 [18 February 2009]. 
181 Latest figures available. 
182 For more information on the proposed programme, see South African Government Information 
online, "Minister of Trade and Industry M. Mpahlw a's statement:  Automotive Development Programme 
announcement", 3 September 2008.  Viewed at:  http://www.info.gov.za/speech es/2008/0809 0415151001.htm 
[27 May 2009]. SACU-South Africa   WT/TPR/S/222/ZAF 
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manner" that is consistent with South Africa's multilateral obligations;  a production allowance will 
replace the current export incentive in line with  multilateral obligations.183   
(ii) Textiles and clothing184 
216. The contribution of the textiles and clothing industry to GDP is not substantial (0.6% in 
2008), but the industry is amongst the most labour-intensive in South Africa, employing 
approximately 100,000 people in 2008, down fro m 127,000 (11% of total employment in 
manufacturing) in 2007185, hence the continued support from th e Government.  Recent Government 
efforts have been aimed at restructuring and upgradin g the industry to arrest further contraction.  The 
industry has been faced with a number of challenges;  it has not been able to compete with low-cost 
imports due to its lack of competitiveness, caused by the low levels of investment;  insufficient skills 
and innovation, and conse quent decline in exports.186  Exports of textiles and clothing declined from 
2.2% of total merchandise exports in 2002 to 0.6% in 2008.  
217. The Duty Credit Certificate Scheme (DCCS) was designed to encourage textile and clothing 
manufacturers to compete internationally.  Manuf acturers and exporters of certain textiles and 
clothing (e.g. clothing and accessories, yarns, house hold textiles, and fabrics) can earn duty credit 
certificates based on the amount exported.  The duty credit is set at a percentage of the value of 
exports, and varies across products:  25% for clot hing and accessories;  8% for yarns;  17.5% for 
household textiles;  and 15% for fabrics and other tex tiles.  The incentive is subject to participation in 
the Performance Measurement Programme (PMP) and the achievement of certain performance, training, and export targets.  However, the scheme has not made the industry competitive:  the 
medium- to long-term challenge for the industry is  to upgrade and restructure so that it becomes 
competitive.  Thus, the authorities are considering revising current support measures – in particular 
the DCCS.  The DCCS applies across SACU;  this needs to be taken into account when revising the 
scheme.  DCCS are issued in each SACU country but they are tradeable.  According to the authorities, 
the DCCS was to lapse in March 2009;  however , while a new programme is being designed, the 
incentive remains in place. 
218. The Textile and Clothing Industry Development Programme (TCIDP), which applies in the 
five SACU countries, operates similarly the DCCS, but applies only to producers of clothing.  According to the authorities it is potentially inco nsistent with WTO rules, and an alternative 
programme is be ing developed.
187  Benefits (i.e. duty credit certificat es) granted under the TCIDP will 
be available until end of March 2010. 
219. In addition, under the Customs and Excise Act (Act No. 91 of 1964), duty rebates, in most 
cases of a 100%, continue to be available for im ported commodities if used as inputs in specific 
industries. 
                                                           
183 Department of Trade and Industry (2008a). 
184 This section is based on Department of Trade and Industry (2007). 
185 Information provided by the authorities. 
186 This is in spite of the MOU that South Africa signed with China in 2006, which restricted imports of 
several categories of textiles and clothing during 2006-08.  For a full list of goods subject to import restrictions, 
see Schedule 10, Part 5, of the Customs and Excise Act (Act No. 91 of 1964), as amended (SARS online 
information, "Legal and Policy:  Schedules to the Cust oms and Excise Acts (Tariff Books)".  Viewed at:  
http://www.sars.gov.za/home.asp?p id=2630 [2 February 2009]). 
187 South African Government Information online, "The Department of Trade and Industry to give 
effect to the Customised Sector Programme process" , 21 May 2009.  Viewed a t:  http://www.info.gov.za/ 
speeches/2009/09052211551002.htm [29 May 2009]. WT/TPR/S/222/ZAF Trade Policy Review 
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 220. The DTI has introduced other support schem es to assist the sector, including a capital 
upgrading programme available to clothing, textiles,  and footwear manufacture rs via the Enterprise 
Investment Programme (EIP) (administered by the DT I), and preferential loans granted by the IDC at 
the prime rate less 5% (Table AIII.4).188 
(4) MINING , ENERGY , AND WATER  
221. The State retains a significant role in the mini ng and energy sector with several state-owned 
enterprises (SOEs) operating in both subsectors (Tab le IV.4).  The National Energy Regulator of 
South Africa (NERSA) is in charge of the petroleum, gas, and electricity subsectors.189  It issues 
licences for:  building petroleum pipelines, and lo ading and storage facilities;  constructing and 
operating gas transmission, distribution, and re-gasi fication facilities, "conversion of infrastructure", 
and trade in gas;  and electricity generation and distribution.190  No information was made available on 
the requirements for obtaining these licences.  NE RSA sets and approves utility charges;  utility 
companies (e.g Sasol or Eskom) may not increase thei r regulated rates or alter their conditions of 
service without NERSA's approval.  NERSA also en sures that access to petroleum pipelines, and 
loading and storage facilities is provided on the "appropriate" land;  prom otes competition amongst 
petroleum pipelines users and gas industries, as well as the optimal use of gas resources;  and settles 
customer disputes.191  NERSA is financed with public funds, levies charged to "regulated" industries, 
charges on dispute resolution, and licence fees.192 
Table IV.4 
SOEs in the mining and energy subsectors, 2009 
Activity SOEs 
Regulator  National Nuclear Regulator (NNR) 
 Energy Regulator of South Africa (NERSA) 
 South African Diamond and Precious Metals Regulator (SADPMR) 
 State Diamond Trader (SDT)  
 Petroleum Agency of South Africa (PASA) 
R&D Council for Geoscience (CGS) 
 Council for Mineral Technology (Mintek) 
 South African Nuclear Energy Corporation (NECSA) 
 Mines Health and Safety Council (MHSC) 
 Central Energy Fund Group (CEF) (Pty) Ltd.   
Other Electricity Distribution Industry Holdings Company (Pty) Ltd. (EDI Holdings) 
Source: Department of Minerals and Energy (undated), Strategic Plan 2008/9-2010-11 , Pretoria;  and information provided 
 by the South African authorities.   
                                                           
188 Under the EIP, investment grants of 15% to 30% are offered towards qualifying investment in plant, 
machinery and equipment, and customized vehicles required for establishing or expanding existing production 
facilities or upgrading production capacity in existing clothi ng and textiles operation, or to ensure that tourism 
projects create employment and promote to urism in new areas (Table AIII.4). 
189 In terms of the Electricity Regulation Act (Act No. 4 of 2006), the Gas Act (Act No. 48 of 2001), 
and the Petroleum Pipelines Act (Act No. 60 of 2003). 
190 For electricity distribution, NERS A determines a geographical area. 
191 NERSA online information.  View ed at:  http://www.nersa.org.za/. 
192 Department of Minerals and Energy (undated c);  and Government Gazette  No. 27458, 6 April 2005;  
and the Gas Regulator Levies Act (Act No. 75 of 2002), the Petroleum Pipelines Levies Act (Act No. 28 of 2004), and Section 5B of the Electricity Act (Act No. 41 of 1987). SACU-South Africa   WT/TPR/S/222/ZAF 
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(i) Mining 
222. Mining accounted for 5% of GDP in 2007 and employed around 495,474 workers.193  In the 
same year, it generated 8.9% of total fixed investment  (12.1% of total private-sector investment), and 
contributed 30.2% of South Africa's total merc handise exports, despite a decline in production (of 
0.8% compared with 2006), led by a decline in gold and diamond production.194   
223. The Department of Minerals and Energy has embarked on a 2008/09-2010/11 Strategic Plan 
aimed at increasing investment in mining, promoting the sustainable use of energy resources, and ensuring the development of an efficient, saf e, and cost effective electricity industry.
195  The Plan also 
envisages a royalty on the sale of mineral resources;  the rate would be determined by a formula based 
on the degree of refinement and the value of the company's gross sales.196  The introduction of the 
Minerals and Petroleum Royalty Act (Act No. 28 of 2008) has been postponed from 1 May 2009 to 
1 March 2010. 
224. Taxation on mining companies in South Africa has not changed since the previous review of 
SACU in 2003.  Mining companies extracting diam onds and other minerals and base metals, except 
gold, are levied an income tax at a flat rate of  29%, and a Secondary Tax on Companies at 12.5%.  
Income derived from gold mining is taxed on the basis of a formula.  Mining companies are liable for 
value-added tax on goods and serv ices supplied to them, but expor ts of mining products are 
zero-rated.  Thus mining companies are entitled to refunds of VAT paid on inputs used in exported 
items.197  
225. Average tariff protection for mining and quarrying is low (0.8%):  most activities, with the 
exception of salt mining (with a 10% tariff), are subject to tariffs of 0% to 2.9% (Main Report, 
Table AIII.2). 
226. The Mineral and Petroleum Resources Develo pment Act (MPRDA) (Act No. 28 of 2002) 
stipulates that both foreigners and nationals have the right to apply for a prospecting right, mining 
permit, reconnaissance permit, beneficiation right, exploration right, and/or mining right as long as they comply with the requirements set out in the law.
198  The law makes no reservations for South 
African citizens;  however, it empowers the Minist er to give preference to applications from 
historically disadvantage peoples when considering applications received on the same date.  The 
Branch Mineral Regulation and Administration w ithin the Department of Mineral Resources is 
responsible for processing the applications.  App lication procedures for the different rights are 
similar:  in all cases applications must be lodged w ith Regional Office where the land is situated, with 
all the required documents, including farm name a nd number, title deed, applicants' details, company 
name and registration number, proof of technical a nd financial ability, and type of mineral.  The 
applicant must pay a non-refundable application f ee, which varies according to activity.  Turn-around 
times are six months for a prospecting right and 12 months for a mining right.  The rights are non-transferable and are usually for two years, renewable in certain cases.  
                                                           
193 Department of Minerals and Energy online information.  Viewed at: www.dme.gov.za.. 
194 Chamber of Mines of South Africa (2008b). 
195 Department of Minerals and Energy (2008). 
196 Bain (2009). 
197 Chamber of Mines Media Release, "Note on Mining Taxation in South Africa:  a Presentation by 
Mzolisi (Zoli) Diliza at the World Mining Congress held in London, 2 June 2008".  Viewed at:  
http://www.bullion.org.za/MediaReleases /Downloads/Taxation02.06.08.htm. 
198 Mineral and Petroleum Resources Development Act,  Act No. 28 of 2002  Online.  Viewed at: 
http://www.info.gov.za/view/DownloadFileAction?id=68062. WT/TPR/S/222/ZAF Trade Policy Review 
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 227. South Africa participates in the African Mini ng Partnership (AMP), aimed at coordinating 
mining and mineral-related initiatives around areas su ch as developing artisanal and small-scale 
mining or promoting foreign investment and indi genous participation in mining ventures.  The 
Partnership is under auspices of the NEPAD's (Main Report, Chapter II(3)). 
Coal 
228. In 2006, South Africa had the world's sixth la rgest coal reserves (around 31 billion tonnes).199  
There are 19 official coal fields;  70% of the rese rves lie in three fields (Highveld, Waterberg, and 
Witbank).  In 2007, the coal industry employed around 60,400 workers, and accounted for 2.2% of GDP and 5.2% of total merchandise exports.  Pr oduction totalled 247.7 million tonnes (1.2% increase 
compared with 2006).  Around one third of the coal produced in South Africa is exported, of which 
one third to the European Communities.  Domestic  sales reached 177 million tonnes (3.2% more than 
in 2006) due to the increasing demand by Es kom and Sasol;  Eskom and Sasol consumed 
112 million tonnes and 45.4 million tonnes of coal, respectively.
200  Production of coal is 
concentrated:  90% is produced by six enterpri ses (Anglo Coal, BHP Billiton, Sasol Mining, Eyesizwe 
Coal, Kumba Coal, and Xstrata Coal). 
229. Coal provides 88% of South Africa's primary energy needs;  around 90% of the electricity 
generated, and 35% of the liquid fuel produced is derived from coal (liquefied coal).201  Liquefied coal 
is produced by Sasol202, the world's largest liquefied coal manufacturer.  Imports of coal products 
enter South Africa duty free (Main Report, Table AIII.2).   
Diamonds and precious metals 
230. The South African Diamond and Precious Metals Regulator (SADPMR) replaced the 
South African Diamond Board on 1 July 2007.203  It regulates the diamond and precious metals (gold 
and platinum-group metals) industries, as stipulat ed in the Diamond Act (Act No. 56 of 1986), as 
amended204, and the Precious Metals Act (Act No. 37 of 2005).  SADPMR administers, and controls 
the purchase, sale, beneficiation, import, and export of  diamonds.  It also administers and controls the 
acquisition, possession, smelting, refining, fabrica tion, use, and disposal of precious metals.205  
SADPMR issues licences, permits, and certificates fo r all activities related to  diamonds and precious 
metals;  in 2007, 704 licences/permits/certificates we re issued related for diamond-related activities, 
and 32 for precious metals.206  SADPMR also ensures that all diamond dealers comply with the 
Kimberley Process certification scheme.207   
                                                           
199 Department of Minerals and Energy online information.  Viewed at:  www.dme.gov.za. 
200 Over the next decade, Eskom is  likely to require 200 million to nnes annually and Sasol plans to 
expand its domestic fuel operations therefore requiring extra coal (U.S. Energy Information Administration, 
2008;  and Chamber of Mines of South Africa, 2008b). 
201 South Africa's large coal reserves made it one of  the world's cheapest elect ricity supplier. Coal 
reserves are estimated to be sufficient to provide pow er for, at least, the ne xt 20 years (EIU, 2009). 
202 Sasol was established by the Government in 1950 to manufacture fuels from indigenous raw 
materials.   
203 Department of Minerals and Energy (2008). 
204 Diamonds Amendment Act (Act No. 29 of 2005) and Diamonds Second Amendment Act (Act 
No. 30 of 2005). 
205 SADB online information.  Viewed at:  http://www.sadb.co.za/Default461.aspx. 
206 Permits, etc., for diamonds, include:  the diamond dealer's licence, the diamond beneficiation 
licence, the diamond research licence, the diamond trading house licence, the temporary diamond buyer's permit, the permit to sell, import or export, and the certificate to possess and unpolished diamond.  For precious SACU-South Africa   WT/TPR/S/222/ZAF 
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231. South Africa is the sixth largest diamond producer in the world in terms of volume and the 
fourth largest in value terms.208  Around 41% of South Africa's diamo nds are gem quality;  the rest are 
of industrial quality.  In 2007, production of rough diamonds totalled 15.7 million carats (up from 
15 million in 2006).  Exports totalled 13.8 million carats (down from 15.8 million carats).209  Imports 
amounted to 1.2 million carats which indicates th at South Africa imported gem quality diamonds 
(i.e. larger stones of more than 1 carat) from its offshore production for the local cutting and polishing 
industry.  Imports of diamonds are duty free.  Production declined 8.1% on a year-on-year basis during the first half of 2008 due to the national elec tricity supply crisis (section (c) below) and the 
closure of some shafts.
210  
232. In 2008, SADPMR created the Diamond Exchange and Export Centres to facilitate domestic 
and international trade in diamonds.  The Centre or ganizes auctions for mines and allows any person 
holding a permit or licence to buy rough diamonds to participate.  The State Diamond Trader (SDT) 
was created in 2007 to promote "equitable" access to diamonds and develop South Africa's diamond 
cutting and polishing industries.211  SDT buys up to 10% of South Africa's diamond production and 
sells it to small-to-medium-si zed local cutters and polishers212;  in 2007, only 5% of South Africa's 
rough diamonds were cut and polished locally.  De  Beers Consolidated Mines rough diamond supply 
branch, will provide technical support to SDT until October 2010.213   
233. There is considerable state intervention in the diamond market.  Even though imports of 
diamonds bear a 0% tariff, import prohibitions and controls are main tained for uncut diamonds;  while 
exports of unpolished diam onds continue to be regulated.  Exports of unpolished diamonds are 
prohibited except by a producer, a manufacturer (if it is a synthetic diamond), a dealer, or a holder of 
an export permit.  Unpolished diam onds must be sold at the Diamond Exchange and Export Centres.  
In addition, to promote the development of the local economy, develop skills, and create employment, 
South Africa still levies a tax on exports of unpolished diamonds (Chapter III(3)(ii)). 
234. In 2007, South Africa produced 253 tonnes of gold (down from 272.1 tonnes in 2006) and 
was ranked the world's second gold producer.  The contribution of gold to the economy remained 
important:  gold exports accounted for 7.1% of to tal merchandise exports, and the gold mining 
industry represented about 2.5% of GDP and employed around 169,000 workers.  During the first 
quarter of 2008, gold production further declined (by 17% year-on-year) due to the electricity supply 
                                                                                                                                                                     
metals, they include:  the precious metals refining licence, the precious metals beneficiation licence, the 
jeweller's permit, the import permit, the export permit, the special permit, and the precious metals certificate.   
207 South African Diamond and Precious Metals Regulator (2008). 
208 Chamber of Mines of South Africa (2008b). 
209 South African Diamond and Precious Metals Regulator (2008). 
210 Chamber of Mines of South Africa (2008b). 
211 "Equitable" distribution is ensured by allowing small, medium, and large business to participate in 
the diamond auctions. 
212 Initially, SDT bought rough diam onds exclusively from De Beers.   It has now signed supply 
agreements with smalle r mining operations ( Rapaport News , "South Africa's Acting State Diamond Trader 
Shows Goods to Clients", 21 January 2009.  Viewed at:  http://www.diamonds.net/news/ 
NewsItem.aspx?ArticleID=25009). 
213 Mining Weekly , "State Diamond Trader officially launched", 29 February 2008.  Viewed at:  
http://www.miningweekly. com/article/state-diam ond-trader-officially-la unched-2008-02-29;  and Rapaport 
News , "South Africa's Acting State Diamond Trader Shows Goods to Clients", 21 January 2009.  Viewed at:  
http://www.diamonds.ne t/news/NewsItem.aspx?ArticleID=25009. WT/TPR/S/222/ZAF Trade Policy Review 
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 crisis.  South Africa processes gold for jewellery and for minting coins.214  Its gold reserves have been 
estimated at 31,000 tonnes, some 30% of the world's reserves.215 
235. South Africa has about 87% of the world's PGM reserves.216  PGM accounts for the largest 
component of South Africa's mining production;  in 2006, sales were equivalent to the combined sale 
of gold and coal.  In 2007, the PGM mining industry accounted for 2.1% of GDP and employed 
around 186,400 workers.  Productio n totalled 311 tonnes (307.5 tonnes in 2006) due to increases in 
demand for ruthenium, rhodium, and iridium output;  platinum accounted for over half of PGM production (South Africa is the world's largest producer of platinum (around 77% of world 
production) and rhodium (84%)).
217  PGM exports represented 14.6% of total merchandise exports in 
2007.  However, during the first quarter of 2008, pro duction declined by 19% on a year-on-year basis, 
due to shortages in electricity supply (section (c) below). 
(ii) Petroleum and gas 
236. South Africa does not have significant deposits of  oil and natural gas.  In January 2008, 
reserves were estimated at 15 million barrels of oil and 318 million cubic feet of gas. 
237. The Central Energy Fund (CEF) (Pty) Ltd. was created to engage in the acquisition, 
exploration, generation, marketing, and distribution of oil and gas and to undertake research related to 
the energy sector.  According to authorities, C EF is a private company, incorporated under the 
Companies Act, which is wholly owned by the State and comprises seven operating subsidiaries:  
(i) the Petroleum Oil and Gas Corporation of South Africa (PetroSA), created in 2000, in charge of 
exploring and producing crude oil and natural gas off South Africa's coast;  (ii) the South African Gas 
Development Company (Pty) Ltd. (IGas), in charge of the hydrocarbon gas industry;  (iii) the 
Petroleum Agency SA (Pasa), which promotes and regulates petroleum resources;  (iv) the Oil Pollution Control SA (OPCSA), in charge of prev enting disasters and of clean-up services mainly in 
ports and on the coast;  (v) the South African Nationa l Energy Research Institute (Saneri), in charge 
of research in alternative energy sources;  (vi)  the National Energy Efficiency Agency (NEEA), 
created in 2006 to promote energy efficiency;  and (vii) the Strategic Fuel Fund Association (SFF) in 
charge of managing South Africa's strategic crude oil reserves.
218 
238. South Africa's oil fields are off the southern co ast in the Bredasdorp basin and the west coast 
near the Namibian border.219  In 2007, South Africa produced 199,000 barrels/day (b/d) of oil;  
comprising crude oil and synthetic liquid fuel proces sed from coal and gas (coal to liquid and gas to 
liquid).  South Africa is a net importer of crude oil;   around two third of its c onsumption is imported, 
mainly from Iran, Saudi Arabia, Nigeria, and Angola.220  Imports of crude oil bear a 0% tariff rate.  
                                                           
214 Chamber of Mines of South Africa (2008b);  and South African Diamond and Precious Metals 
Regulator (2008). 
215 Mbendi online information, "Gold Mining in South Africa:  Overview".  Viewed at:  
http://www.mbendi.com/indy/ming/gold/af/sa/p0005.htm [8 May 2009].  
216 PGM includes platinum, palladium, rhodium, iridium, ruthenium, and osmium. 
217 Chamber of Mines of South Africa (2008a);  Chamber of Mines of South Africa (2008b);  and South 
African Diamond and Precious Metals Regulator (2008). 
218 CEF online information.  View ed at:  http://www.cef.org.za. 
219 The Bredasdorp basin – the most prolific exploration block – comprises the Oribi, Orxy, and Sable 
fields.  PetroSA holds 100% equity of the Oribi and Orxy fields and 60% equity of the Sable field, operated in a joint-venture with U.S. Pioneer Natural Resources.  In 2007, South Africa auctioned four offshore blocks off the 
western coast for exploration as a jo int-venture with PetroSA (U.S. Energy Information Administration, 2008;  
and EIU, 2009). 
220 U.S. Energy Information Administration (2008). SACU-South Africa   WT/TPR/S/222/ZAF 
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South Africa does not own crude oil tankers, which limits its access to crude oil in case of need;  
hence it has strategic stocks of crude oil stored in Saldanha Bay.221   
239. Companies active in oil exploration include  South African PetroSA and international 
companies (e.g. Anschutz International, BHP Billion, Forest Oil International, Shell, TotalFinaElf, 
Caltex, and Pioneer Natural Resources).  Despite  insignificant oil deposits, South Africa has the 
second largest oil refining capacity in Africa (488, 000 b/d in 2007).  The main refineries are in 
Durban, Cape Town, and Sasolburg;  a project is unde r way to open a refinery at Coega by 2015.  The 
refineries are operated by South African companie s (e.g. Naledi Petroleum and Afric Oil) and 
international companies (e.g. BP, Chevron, Shell,  and TotalFinaElf).  All the refined products 
produced in South Africa's companies are sold on th e domestic market.  Tariffs on imports of refined 
products average 3.8% (Main Report, Table AIII.2)  Imports of oils and othe r fossil fuels inorganic 
acids are also subject to import control measures.  The Energy Master Plan on liquid fuels supports 
the development of additional crude refinery capac ity to address the shortage of locally refined 
products.  PetroSA plans to build and upgrade the existing facilities to increase production and deal 
with the shortage.222   
240. A specific fuel levy is applied on certain pe troleum oils and oils obtained from bituminous 
minerals.  The levy is applied at the same rate on imported and domestic goods (Table III.1). 
241. The retail price of gasoline is regulated and adjusted on a monthly basis.  This price is 
calculated by the Central Energy Fund (CEF) on beha lf of the Department of Minerals and Energy 
(DME).  The elements taken into account are:  th e basic fuel price (BFP) based on a formula that 
takes into account the import price of refined oil put in at the South African shores, accounting for 
53.1% of the price;  transport cost from the refi nery to the pump (2.4%);  a wholesale margin also 
determined by a formula (7%);  the retail margin al so fixed by DME and based on actual cost (8.4%);  
the cost of delivery (1.2%);  and taxes (i.e. tariffs  and excise duties;  the road accident fund (RAF), 
and the fuel levy) (27.9%).  The BFP is adjusted  monthly and is the result of negotiations between 
African Minerals and Energy Forum (AMEF) and the South African Petroleum Industry Association 
(SAPIA).  The price of diesel is not regulated.223 
242. South Africa's natural gas resources are scarce and are offshore.  To compensate for the lack 
of natural resources, much of the gas used in S outh Africa is synthetic gas produced from coal by 
Sasol.  Natural gas is imported from Mozambique and Namibia.  South Africa's natural gas fields 
supply PetroSA's liquified plant Mossgas.224  PetroSA and Pioneer Natural Resources are exploiting 
new natural gas fields at Sable oil field and six adjacent undeveloped fields;  Pioneer's production is 
sold to PetroSA under a gas and condensate agreem ent and provides Mossgas with feedstock.  In 
June 2008, PetroSA discovered new gas fi elds off the southern Cape coast.225 
(iii) Electricity 
243. Wholly state-owned enterprise Eskom supplies most of the South African market and exports 
electricity.  Additional electricity is generate d by South African municipalities (2,400 MW), and 
private companies (800 MW).  Eskom owns and opera tes the national transmission system.  Its power 
generation capacity is of 42,000 MW;  it produces el ectricity for the domestic market and exports to 
                                                           
221 Department of Minerals and Energy (undated b).  
222 U.S. Energy Information Administration (2008). 
223 Sasol (undated). 
224 Mossgass is one of the world's largest gas-to-liquid fuel plant. 
225 U.S. Energy Information Administration (2008). WT/TPR/S/222/ZAF Trade Policy Review 
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 neighbouring countries.226  South Africa is a net exporter of electr icity;  it is a member of the Southern 
African Power Pool, which facilitates trade in elec tricity within the Southern African Development 
Community (SADC).  Eskom operates 13 coal-fire d power stations, 2 gas turbines generators, 
1 nuclear power station, 6 conventional hydroelect ric plants, and 2 hydroelectric pumped-storage 
stations.  Around 90% of South Africa's electricity is derived from coal227;  Eskom plans to reduce the 
use of coal to 65-70% by 2025.228   
244. The electricity distribution syst em has been under a process of restructuring since 2001.  At 
present, Eskom is in charge of electricity generation and transmission;  according to the authorities, Eskom has a dominant position, but not exclusive rights in the bulk electricity market.  Eskom and 
187 licensed municipalities distribute electricity.  This dual system has led to inefficiencies, 
disparities in tariffs, unequal treatment of cust omers, and inadequate networks maintenance.
229  The 
2001 Electricity Distribution Industry Restructuring St rategy and Blueprint called for the distribution 
of electricity to be consolidated through the crea tion of six "viable" regional electricity distributors 
(REDs), which were to regroup Eskom and the municipa l electricity utilities.  In July 2005, the first 
RED began operations in the city of Cape Town.  It  is not clear when the other five REDs will start 
operating.  Under a 2006 Cabinet deci sion, the REDs were to be esta blished as public entities;  Eskom 
would become a transitional shareholder in the RE Ds and its percentage shares would decrease over 
time.  The Department of Minerals and Energy (DME), through Electricity Distribution Industry 
(EDI) Holdings230, would oversee and control the REDs.231 
245. The Integrated National Electrification Progra mme (INEP) was launched in 2001 to ensure 
universal access to electricity by 2012;  the le vel of electrification in South Africa is 73%.232  The  
DME is responsible for the programme and finances  the distributors licensed by NERSA, i.e. Eskom 
and municipalities.233  Eskom is mainly responsible for electrification in rural areas with insufficient 
infrastructure.  The INEP targets the electrification of households, schools, and clinics;  in May 2005, 
it had electrified around 232,000 households, 2,200 schools, and 50 clinics.234  However, in 2006 
3.4 million households remained without access to electricity in South Africa. 
246. South Africa's recent strong economic growth, ra pid industrialization, and mass electrification 
programme have contributed to an increase in the demand for electricity.  However, the lack of 
investment in electricity generation capacity have left Eskom unable to meet demand, which has  led 
to electricity shortages and severe power cuts sin ce 2007.  Eskom reached its record peak demand in 
July 2007 (36,400 MW).235  The shortage of electricity has had an impact on the economy as whole,  
but most importantly in the mining sector.  At the beginning of 2008, Eskom requested gold, 
platinum, and coal mines to reduce their electricity demand to a minimum;  they were also warned 
                                                           
226 Department of Minerals and Energy (undated b).   
227 South Africa's large coal reserves makes it one of the world's cheapest el ectricity producer.   
228 U.S. Energy Information Administration (2008);  and Mission économique de l'Ambassade de 
France en Afrique du Sud (2008a).   
229 Business Report , "Power supply to be restructuring to be fast tracked", 13 August 2007.  Viewed at: 
http://www.busrep.co.za/index. php?fSectionId=561&fArticleId =5019465 [3 June 2009]. 
230 EDI Holdings was created in 2003 to facilitate the restructuration of the electricity distribution 
industry. 
231 EDI Holdings online information.  Vi ewed at:  http://www.ediholdings.co.za/. 
232 Department of Minerals and Energy (undated a). 
233 Funding reach up to R 1.4 billion annually.  Howe ver, R 5 billion annually would be required to 
reach complete electrification of un-electrified areas In tegrated National Electrification Programme. Viewed at:  
http://www.ameu.co.za /library/neac/Extract-from-NEAC -MeetingDocument-16August200 7.pdf [12 May 2009].   
234 Department of Minerals and Energy online information, "Integrated National Electrification 
Programme".  Viewed at:  h ttp://www.dme.gov.za/energy/el ect_inep.stm [12 May 2009]. 
235 Department of Minerals and Energy (undated a). SACU-South Africa   WT/TPR/S/222/ZAF 
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that their electricity supply would not be guarant eed, and Eskom agreed to supply only 90% of their 
average electricity demand for the "foreseeable" future.236 
247. In January 2008, the Department of Minerals and Energy and Eskom released a new policy in 
response to South Africa's electricity shortage.  The plan includes the restructuring of the country's 
electricity distribution system and the approva l of electricity projects by independent power 
producers.  It also involves the approval of project s between Eskom and private industries to generate 
electricity, where the heat generated as a by-produ ct of industrial processes in sectors such as 
chemicals is captured to produce power that can be  used by the industries themselves, or bought by 
Eskom.  The new plan also outlines the importance of reducing demand by pricing electricity 
correctly as well as promoting energy efficiency.  Eskom aims to reduce demand by about 3,000 MW 
by 2012 and a further 5,000 MW by 2025 through the promotion of solar-powered geysers and of liquid petroleum gas for cooking. 
248. The 2007-12 Energy Security Master Plan fo cuses on improving the infrastructure to produce 
electricity, ensure a secure supply, diversify the sources of electricity, reduce the use of energy, and 
ensure the supply of affordable energy.  The Master  Plan notes that the Energy Efficiency Strategy 
launched in 2005, called for an overall 12 % reduction of energy demand by 2015.
237  Eskom started a 
demand-management programme in 20 06 aimed at reducing demand through, inter alia , rationalizing 
electricity use and promoting the use of alterna tive energy.  In addition, Eskom has announced its 
intention to reduce its exports to the SADC region.  However, electricity shortages are expected to 
continue in the medium term as investment projects aimed at increasing electricity production and 
efficient distribution will not be completed before  2012;  these projects include the construction of, 
inter alia , two coal-fired power stations, several nuclear power stations, and a pumped-storage 
station.238  The costs of upgrading and expanding the generating capacity will led to large tariff 
increases in the coming years.  Eskom has planned a 34% general increase in tariffs for FY 2009/10, subject to NERSA approval.
239 
249. South Africa, along with Angola, Botswana, th e Democratic Republic of Congo (DRC), and  
Namibia, signed the Memorandum of Understandi ng (MoU) on the Western Power Corridor Project 
in October 2004.  The MoU, under the auspices of NEP AD, is to pilot the use of hydroelectric energy 
from the Inga rapids site to ensure a constant  supply of electricity in the SADC region.  A 
joint-venture company has been established to stud y the project's viability, and to build, own, and 
operate the infrastructure.240 
(iv) Water 
250. South Africa's water resources are scarce:  annual water availability is about 1,200 m3 per 
capita and average annual rainfall is comparativ ely low (497 mm) (the world average is 860 mm), 
with high disparities within regions.  So far,  South Africa's relatively well-developed water 
infrastructure with a network of dams and inte r-basin transfers schemes, has helped maintain 
agricultural irrigation through dry periods.  Howe ver, many are under increasing pressure as water 
demand exceeds supply241:  mining, manufacturing, and electricity production are major water users;  
                                                           
236 Chamber of Mines of South Africa (2008b). 
237 Energy savings are expected to reach, inter alia , 15% in mining and industry, and 9% in transport 
(Department of Minerals and Energy, 2005). 
238 EIU (2009). 
239 Department of Trade and Industry (2008b).   
240 Government Communication and Information System (2008). 
241 Department of Trade and Industry (2008b). WT/TPR/S/222/ZAF Trade Policy Review 
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 and priority has been given to the construction of hydroelectric plants to supply South Africa's 
electricity needs (section (iii) above).242   
251. As stipulated by the National Water Act (A ct No. 36 of 1998), the Department of Water 
Affairs and Forestry (DWAF) manages the wate r resources through licences.  All users who do not 
receive water from a service provider, local author ity, water board, irrigation board, Government 
water scheme or other bulk supplier, and are usi ng water for irrigation, mining purposes, industrial 
use, and feedlots, must register to obtain a licence.243  No information was made available on 
obtaining a licence or the fees involved.  Local au thorities and other bulk suppliers with their own 
water sources and purification works must also obtain a licence.  Registration is aimed at allowing 
effective management of water resources, hence pr omoting optimal use in the public interest and 
ensuring fair allocation according to how much  water is available and already being used.244 
252. The DWAF, through the 1999 Pricing Strate gy for Raw Water, as revised in 2005245, requires 
users of untreated water for irrigation, mining, manufacturing, and municipal purposes, to pay a water resource management charge.  This fee is used to finance water management activities in each of 
South Africa's water management areas.
246  Other charges on water use include:  the consumptive 
charge applied to those receiving water from govern ment water schemes;  the Trans-Caledon Tunnel 
Authority charge, applied to those using water from the Vaal river system;  and the water research levy, which applies to users of water from govern ment water schemes and water services providers 
(e.g. municipalities and water user associations). 
(5) S
ERVICES  
(i) Overview 
253. Services (including construction) contributed so me 65% to South Africa's GDP in 2007, up 
from 62.2% in 2002 (Chapter I).  Growth in 2008 reflected further expansion in telecommunications, 
financial services, construction, and wholesale, ca tering and accommodation ahead of the 2010 World 
Cup.  The largest services subsectors in 2008 were  finance, insurance, real estate, and business 
services (20.1.% of GDP);  community, social and personal services (18%);  and wholesale, retail 
trade, catering and accommodation (13.8.%).  South Africa is a net services importer (Chapter I).  
Travel (tourism) has dominated services exports, illustrating the country's importance as a tourist attraction, while transportation was the main import, reflecting long distances from key markets.  More efficient services delivery is a government priority;  however, state intervention remains 
significant, rendering the supply of key services inef ficient and costly.  Companies supplying services 
are subject to the secondary tax on companies, the VA T, and the skills development levies, other taxes 
apply mainly to financial services (Table IV.5). 
254. South Africa's specific commitments in th e Uruguay Round covered business services;  
communication services (courier services and telecommunication services);  construction and related engineering;  distribution services;  environment services;  financial services (insurance and insurance 
                                                           
242 UNESCO World Water Assessment Programme (2007). 
243 This covers the use of surface and ground water.   Other activities for which registration is required 
include:  diversion of rivers and streams;  discharges of waste or water containing waste;  storage for any 
purpose;  stream flow reduction activities (afforestation) ;  and controlled activities (e.g. irrigating with waste, 
and power generation with water). 
244 Department of Water Affairs and Forestry online information.  Viewed at :  http://www.dwaf.gov.za/ 
default.asp [14 May 2009].  
245 Notice No. 1045 of 2005 ( Government Gazette  No. 27732, 1 July 2005). 
246 These are areas where there are one or more catchment areas. SACU-South Africa   WT/TPR/S/222/ZAF 
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related services, and banking and ot her financial services);  tourism and travel related services;  and 
transport services.  The horizontal commitments on market access contains a limitation on temporary 
presence for up to three years for those engaged in the supply of certain services, without requiring 
compliance with an economic needs test;  limitations  on national treatment relate to local borrowing.  
South African registered companies with a non-resident shareholding of 25% or more have 
unspecified limits on local borrowing.247 
Table IV.5 
Taxes on services, 2009 
Tax  Description Rate/calculation 
All services    
Secondary Tax on Companies 
(STC) Tax on dividends declared by companies resident in 
South Africa 10% on the amount declared 
VAT Value-added tax 14% 
Skills Development Levies Employers must pa y a levy for each employee to finance an 
education and training fund 1% of the leviable amount based on 
the remuneration of employees  
Financial services   
Capital Gains Tax (CGT) CGT is levied on an asset when it is disposed of or 
transferred and there is a gain 25% of the taxable amount  
Securities Transfer Tax (STT) STT is levied on the tran sfer of listed and unlisted secu rities 0.25% of taxable amount 
Retirement Fund Tax Retirement fund tax is  levied on the gross interest, net 
rental, and foreign dividend income of retirement funds;  it 
is also levied on the untaxed policyholder funds of long-term assurance companies in respect of their retirement 
business 18% on the interest, net rental, and 
foreign dividends of the fund  
Air transport   
Air Passenger Tax Tax on international ai r travel R 120 on the carriage of each 
chargeable passenger departing on a 
flight 
Source:  SARS online information, "Tax Types".  Viewed at:  http://www.sars.gov.za /home.asp?pid=161;  and information 
 provided by the South African authorities.   
255. South Africa participated in the extended negotiations on basic telecommunications and 
financial services, and accepted the GATS Fourth Protocol (basic telecommunications) and the 
reference paper, and the Fifth Protocol (financ ial services).  The monopoly on basic fixed-wire 
telephony services (international) of the majority-sta te-owned South Africa Telecom was scheduled to 
last until at least 2003.  The monopoly public switc hed telecommunications services (PSTN) was also 
scheduled to end in 2003, but So uth Africa retained its market access limitations on cross-border 
supply by maintaining the prohibition on bypass.  South Africa adopted the Reference Paper on 
Regulatory Principles as an additional GATS commitment. 
256. South Africa made commitments during the financ ial services negotiations to either maintain 
or expand the market access currently offered to foreign financial service suppliers.  In banking 
services, South Africa's commitments on national treatment specify that natural persons holding 
deposit accounts in branches of banks not incorporated in South Africa must maintain a minimum 
balance of R 1 million in their accounts.  Commi tments were also made on market access, under 
which dealing in foreign exchange in South Africa may only take place through a dealer authorized by 
the South African Reserve Bank, and companies involved in, inter alia , asset management, collective 
investment schemes, and custodial services for securities and financial instruments, must be 
incorporated as public companies in South Africa a nd registered with the supervisory authority to 
carry on business in South Africa.  Market access lim itations also apply to the insurance sector.  
Insurers/re-insurers need to be incorporated as a public company in South Africa and registered with 
                                                           
247 WTO document GATS/SC/78/Suppl.3, 26 February 1998. WT/TPR/S/222/ZAF Trade Policy Review 
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 the supervisory authority to carry on insurance business in South Africa;  the executive chairman, 
public officer, and the majority of directors must be resident in South Africa.  The acquisitionn of 25% or more of the value of the shares in a regi stered insurer requires the written approval of the 
Registrar of Insurance. 
257. South Africa grants MFN treatment in services to all WTO Members.  The only two MFN 
exemptions listed relate to financial services and transport services.  Members of the Common 
Monetary Area (i.e. Lesotho, Namibia, and Swaz iland) enjoy preferential access to South Africa's 
capital and money markets and transfer of funds  amongst CMA members is exempt of exchange 
controls.  The right to carry goo ds and passenger to or from South Africa and between third countries 
(e.g. Botswana, Lesotho, Swaziland, Malawi, Zimbab we, and other sub-Sahara n African countries) by 
road, is reserved only to operators of contracting pa rties of a regional and plurilateral road transport 
agreements.
248  Cabotage is restricted to South African registered vehicles and operators. 
258. Notwithstanding the limitations inscribed in S outh Africa's Schedule, the authorities view 
services liberalization as important in attracting fore ign investment and developing infrastructure.  
However, this has not yet resulted in any decisions to further open the services sectors.  Nevertheless, 
South Africa is examining the possibility of maki ng further commitments in a number areas, and in 
2006, tabled an offer in the ongoing services negotiations. 
(ii) Financial services249 
259. Financial institutions in South Africa have had several years of robust economic growth, 
supported by prudent macroeconomic management  and high commodity prices, and virtually no 
exposure in the sub-prime mortgage market (Chapt er I).  Up to end-2008, banks and insurance 
companies were profitable, and enjoyed good capitali zation and reserve levels.  The financial sector 
has also benefited from an effective regulatory frame work.  Commercial banks are the largest segment 
of the financial sector followed by life insurance companies. 
(a) Banking 
260. South Africa's banking sector comprises commerc ial banks (foreign and domestically owned), 
mutual banks, co-operative banks, and developmen t banks).  Four commercial banks, Amalgamated 
Bank of South Africa (ABSA), FirstRand Bank, Ne dbank, and Standard Bank, all of which are 
privately owned, account for almost 84% of total assets and have a strong presence in the other SACU 
countries.  Foreign presence in these four banks has in creased significantly sin ce the previous Review 
of SACU in 2003.250  The requirements (e.g. minimum capital requirements) for establishing a 
domestic or foreign bank are the same.  In mid 2008,  there were 19 registered commercial banks in 
South Africa (14 domestic and 5 foreig n owned), and two registered mutual banks.  The structure of a 
mutual bank is designed to be less formal and simpler than that of a traditional bank.251  In addition to 
                                                           
248 This type of agreement includes the SADC Protocol on Transport, Communication and 
Meteorology, the Maputo Development Corridor between South Africa and Mozambique (Government 
Communication Information System, 2008). 
249 This section is based on South African Reserve Bank (2008a);  IMF (2008);  and Financial Services 
Board (2008). 
250 For instance, China's Industrial and Commercial Bank of China (ICBC) purchased a 20% stake in 
Standard Bank in February 2008. 
251 These are established under the Mutual Banks Act (Act No. 124 of 1993).  While commercial banks 
are required to be public companies with external sh areholders, mutual banks are owned by their members 
(i.e. the depositors are the members).  The requirements for the establishment of both forms of bank are similar 
as the legal frameworks focus on fit and proper management, capital and IT systems.  Capital requirements are:  SACU-South Africa   WT/TPR/S/222/ZAF 
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the commercial banks, several state-owned developm ent banks/finance institutions have been created 
to finance projects in specific sectors, to support SMEs, and to provide banking services to the 
"unbanked" sector of the population (Table IV.6). 
Table IV.6 
Development financing institutions, 2009 
Institution Activity 
Development Corporation of South Africa (IDC) Finances  large industrial, mining, and agricultural projects 
Development Bank of Southern Africa (DBSA) Finances regional in frastructure development projects (e.g. roads, prisons, and loca l 
government waste treatment and water projects)  
Business Partnersa Finances small business 
Khula Enterprise Finance Finan ces small and micro-businesses 
Land Bank  Provides short- and medium-term loan s, and long-term mortgages to farmers for 
agricultural projects at s ubsidized interest rates 
Postbankb Savings institution;  provides services  mainly to the "unbanked" population 
a Formerly the Small Busine ss Development Corporation. 
b Operates through the South African Post Office. 
Source:    WTO Secretariat. 
261. The new Co-operative Banks Act (No. 40, of 2007)  is aimed at supporting and developing the    
co-operative banking industry.  The Act provides for the registration of deposit-taking financial 
services co-operatives as banks.  Hence, they woul d be under the supervision of the Central Bank 
giving depositors with co-operative banks the same  level of protection as depositors with formal 
commercial banks.  Thus increasing the access of certain segments of the population to banking 
services under safe conditions. 
262. Foreign-owned banks may operate in South Afri ca in three different corporate forms: as 
branches of their foreign subsidiary with domestic regi stration;  as subsidiaries of their foreign parent 
(and legally constituted as  domestic banks);  or as foreign representative offices.  Branches and 
subsidiaries are subject to the same supervisor y requirements than domestic banks.  There are 
44 foreign-representative offices in South Africa:  these are not allowed to accept deposits; their 
purpose is largely to establish a presence in South Africa, sometimes attracting business to their 
offshore operations. 
263. Up to end 2008 the banking sector had perform ed soundly.  However, banks are facing 
increased credit risk, especially in their household loan portfolios, because of record household 
indebtedness and increasing debt-service burden.  A sset quality has deteriorated and returns have 
decreased because of the increas e in interest rates and the decrease in property prices.  
Non-performing loan (NPL) ratios are not high but have increased since 2006 because of the increases 
in interest rates; arrears on credit card debt are also rising. 
264. Access to banking services has incr eased markedly:  the population that has access to banking 
services rose from 25% in 1994 to 63% in 2008.252  This has been as result of, inter alia , the Financial 
Sector Charter, which calls for the banking sector to expand its branch network253;  and  the National 
                                                                                                                                                                     
R 250 million for commercial banks and R 10 million for mutual banks.  The two forms of banks may provide 
the same services.  Foreigners may invest in and establish a mutual bank. 
252 IMF (2008). 
253 The Financial Sector Charter aims to transform the financial sector to take into account the terms of 
the Broad Based Black Economic Empowerment (BBBEE) Ac t 98 (Act No. 53 of 2003).  The financial sector 
committed itself to the development of a Black Economic Empowerment (BEE) charter (Financial Sector WT/TPR/S/222/ZAF Trade Policy Review 
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 Credit Act (Act No. 34 of 2005), which calls for th e development of an accessible credit market to 
address the needs of the disadvantaged low-in come population and remote communities.   
265. The South African Reserve Bank (SARB) is r esponsible for commercial bank regulation and 
supervision.  The SARB is governed by the Banks  Act and the Mutual Banks Act, under which it 
must assign a Registrar of Banks to be in charge of banking supervision.  The Registrar must be 
approved by the Ministry of Finance.  Banking su pervision has been strengthened in recent years 
through the SARB's  implementation of Basel II.  In addition, the National Credit Regulator (NCR), 
established under the National Credit Act (Act No. 34 of 2005), regulates the "credit industry" in 
South Africa254;  it regulates of all types of househol d credit extended by banks and non-banking 
institutions.  The role of the NCR has become  more relevant given the level of household 
indebtedness:  it prohibits "reckless lending", whic h has required lenders to increase underwriting, and 
improve risk management, and has increased transparency. 
(b) Insurance 
266. South Africa's insurance industry comprises long-term (mostly life) insurance, short-term 
insurance (corporate, general, personal motor vehicle) , and reinsurance.  At the end 2008, there were 
190 registered insurance companies, consisting of 78 long-term insurers, 100 short-term insurers, and 
12 reinsurers .  Reinsurance companies operate as professional reinsurers in long-term, short-term and 
composite markets.  Four of the five main insurance groups have close ties  with South Africa's main 
commercial banks:  currently, ten long-term insurers and six short-term insure rs are owned by banks, 
and one bank is owned by a long-term insurance co mpany.  In terms of ownership, 78.47% of all 
long-term insurance companies are owned by South Africans;  there is no state ownership in the 
sector.  Around 73% of total ownership in the short-te rm insurance sector is domestic capital while 
state ownership is 4.8%.   
267. During 2003-08 the performance of insurance sector, like that of banking sector, was strong, 
reflecting a growing economy and strong equity mark et.  The life insurance sector is a major players 
in South Africa's financial sector, accounting for a large share of the retirement savings market.  At 
end 2008, life and general insurers, maintained large and grow ing surpluses in excess of the required 
minima;  no insurance companies have failured in rece nt years.  However, due to the global financial 
crisis, the supervisory authority has strengthened s upervision of the most important insurance groups 
to identify any potential problems. 
268. Every insurer or reinsurer is required to be registered for a specific class or classes of 
business, i.e. assistance, disability, fund, health, life, and/or sinking fund.  Registration criteria have 
not changed during the review period;  the requi rements are the same for national and foreign 
companies.   Foreign insurers/re-insurers still need to be  incorporated as a public company in South 
Africa and be registered with the supervisory author ity to carry on insurance business in South Africa.   
269. The minimum capital requirement for long-term in surers (for one or more kinds of long-term 
insurance policies) is R 10 million or an  amount equal to the operating expenses255;  whichever is 
higher.  The Registrar may, however, relax the minimum capital adequacy requirement for a specific 
insurer upon conditions and for the duration that the Registrar determines necessary.  For short-term 
                                                                                                                                                                     
Charter Council online information, "Overview".  View ed at: http://www.fscharter.co.za/page.php?p_id= 
137&PHPSESSID=46589b68277655bef8a050ac787d0e8d. 
254 Department of Trade and Industry online information, "The National Credit Regulator (NCR)".  
Viewed at:  http://www.thedti.gov. za/thedti/ncr.htm [29 May 2009]. 
255 The minimum capital requirement is defined as the amount reported as the annual return submitted 
to the Registrar multiplied by 13 and divided by the number of weeks in the reporting period. SACU-South Africa   WT/TPR/S/222/ZAF 
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insurers (for of one or more kinds of short-term insurance policies) the minimum capital requirement 
is R 5 million.  The actual capital will, however, be di ctated by the type and volume of business to be 
conducted, as set out in the five-year projections subm itted with the application.  Before the applicant 
is registered as a long-term or short-term insurer,  the company auditors must confirm that the required 
capital has been paid.  The Registrar must be sat isfied that the proposed shareholders have the 
financial means to provide the minimum start-up  capital as well as the ability to provide further 
capital to the insurer when required.   
270. South African legislation requires reinsurers to  register in South Africa in order to conduct 
business in the country.  South African insurance co mpanies however, often enter into reinsurance 
arrangements with foreign reinsurers.  In order fo r this reinsurance to be acknowledged for purposes 
of capital adequacy requirements, the foreign rein surer must provide security in the form of a 
monetary deposit with the South African primary in surer or an irrevocable guarantee or a letter of 
credit issued by a South African bank.   
271. The acquisition of 25% or more of the value of th e shares in a registered insurer, by nationals 
or foreigners, requires the written approval of the Registrar of Insurance.256  Application for approval 
to acquire control over an insurance company requi res information similar to that required when 
applying for registration;  the application is treated in the same manner as a new application for 
registration of an insurer.  Applications for acquis ition of a controlling share in an insurance company 
are referred to the Licensing Comm ittee (appointed by the Board of the Financial Services Board) for 
their recommendation.  
272. There are a few compulsory insurances in Sout h Africa.  These are motor third-party bodily 
injury or death cover, and workers' compensation insurance.  South African residents may purchase 
policies from non-resident insurance companies.  However, the foreign insurer may not solicit 
business in South Africa.   
273. The sector continues to be regulated mainly by  the Long-Term Insurance Act (Act No. 52 of 
1998) and the Short-Term Insurance Act (Act No . 53 of 1998).  However, a draft bill proposing 
changes to these two Acts was submitted to the National Treasury in 2008.   The Insurance Laws 
Amendment Bill, 2008 was approved on 30 April 2008 and the Insurance Laws Amendment Act 
(Act No. 27 of 2008) (ILAA) was signed by the Pr esident on 1 November 2008.  The ILAA addresses 
technical and regulatory issues in both Acts, closes certain regulatory gaps, improves certain 
provisions and updates outdated references.  Task  teams, which include representatives from the 
National Treasury, the Financial Services Board (FSB ), industrial associations, and regulators, have 
been constituted to draft regulations for demarca tion between health and medical schemes, business, 
and binder agreements, respectively.  The ai m is to finalize regulations by end 2009. 
274. The FSB, under the National Treasury (NT), is r esponsible for regulating insurance, pension 
funds and intermediaries, and the capital markets.257  The FSB operates under various pieces of 
legislation258;  it is accountable to government and parlia ment.  The FSB is funded by levies and fees 
                                                           
256 Section 26 of the Long-term Insurance Act or  section 25 of the Short-term Insurance Act 
257 Financial Services Board (2008). 
258 The Collective Investment Schemes Control Act (Act No. 45 of 2002);  Financial Services Board 
Act (Act No. 97 of 1990);  Financial Advisory and Inte rmediaries Services Act (A ct No. 37 of 2002) (FAIS 
Act);  Financial Institutions (Protection of Funds) Act (Act 28 of 2001);  Financial Supervision of the Road 
Accident Fund Act (Act No. 8 of 1993);  Friendly Societies Act (Act No. 25 of 1956); Inspection of Financial 
Institutions Act (Act No. 80 of 1998);  Long-term Insura nce Act (Act No. 52 of 1998);  Pension Funds Act (Act 
No. 24 of 1956);  Short-term Insurance Act (Act No. 53  of 1998); the Supervision of the Financial Institutions WT/TPR/S/222/ZAF Trade Policy Review 
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 charged to the regulated entities.  Every long-term and short-term insurer must pay a levy to the 
Financial Services Board.  The levies are revi sed "from time to time" and are published in 
Government Gazette .259  The regulatory system is well developed; the FSB uses a risk-based approach 
with extensive quantitative and qualita tive reporting and regular on-site vi sits  In addition, all licence 
holders are required to submit quarterly and annual financial statements.  The Registrar may fine a 
licensee or suspend a licence if the licensee for instance does not submit the information stipulated in 
the laws within the deadline;  provi des false information;  or lacks financial resources, organization or 
management necessary to carry on the business concer ned.  During 2003-08, the Minister of Finance 
prohibited one long-term insurance company from conducting any new business. 
275. The FSB's licensing, supervisi on, and enforcement capacity have been enhanced since 
2003.260  During the review period, the FSB, as part of enhancing its regulatory capacity, initiated 
amendments to various laws.  The amendments were  incorporated into an omnibus bill, the General 
Financial Services Laws Amendment Bill, 200 8 which is currently before Parliament. 
(iii) Communications  
276. South Africa's telecom network is one of Africa 's most advanced.  However, there remains a 
large gap between access to services in urban and rural areas.  During 2003-07, telephone (fixed and 
mobile) subscriber numbers more than doubled, from 21.6 million to nearly 47 million, due mainly to 
an increase in mobile phone subscribers, who account ed for 90% of the total telephone subscribers in 
2007 (Table IV.7).  In contrast, there are some ten main fixed lines per 100 inhabitants in South Africa, which is low compared with countries at th e same level of economic development (i.e. Brazil, 
Russia, and China) where the range is 22 to 28.  The number of fixed lines has been decreasing to an 
estimated 4.5 million in mid 2008.
261  Telecommunications growth has been hampered by regulatory 
constraints restricting competition, especially the state semi-monopoly on fixed wire services, and the 
resulting high charges and inadequate services th at penalize consumers, including businesses.  
Table IV.7 
Selected telecommunica tion indicators, 2003-08 
 2003 2004 2005 2006 2007 2008 
Telephone subscribers ('000) 21,681 25,689 38,689 44,362 46,942 46,832 
Telephone subscribers per 100 inhab itants 46.21 54.42 81.57 93.21 96.63 96.41 
Main fixed telephone lines ('000) 4,821 4,850 4,729 4,700 4,642 4,532 
Main fixed lines per 100 inhab itants 10.28 10.27 9.97 9.88 9.56 9.33 
Cellular mobile subscribers ('000) 16,860 20,839 33,960 39,662 42,300 45,000 
Cellular subscribers per 100 inhabitants 35.93 44.14 71.60 83.33 87.08 92.15 
Internet subscribers ('000) 3,138 3,566 4,279 4,279 4'279 4,279 
Internet subscribers per 100 inhabitants 6.69 7.55 9.02 9.02 9.02 9.02 
Internet users ('000) 3,283 4,000 3'600 3'700.0 3'966.0 4,187 
Internet users per 100 inhabitants 7.0 8.47 7.59 7.77 8.16 8.57 
Source:  ITU online information, "ICT Statis tics Database".  Viewed at:  http ://www.itu.int/ITU-D/icteye/Indicators/
 Indicators.aspx# [24 June 2009]. 
                                                                                                                                                                     
Rationalisation Act (Act No. 32 of 1996); and The Secur ities Services Act (Act No. 36 of 2004) (Financial 
Services Board online information, "Legislation".  Viewed at: http://www.fsb .co.za/ [29 May 2009]). 
259 The current levies have been in place since 1 Apr il 2009 and will be revised on 31 March 2010.  The 
levy on short-term insurers and underwriters at Lloyd’s is equal to 0.107% of the first R 60 million gross 
premium income, including any rebates, plus 0.0247% thereafter, or R 10,700, whichever amount is the greater.  The levy on long-term insurers is equal to R 50,000 plus 0.0066% of the liabilitie s under unmatured long-term 
policies.  
260 IMF (2008). 
261 Mission économique de l'Ambassade de France en Afrique du Sud (2008b);  and OECD (2007). SACU-South Africa   WT/TPR/S/222/ZAF 
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277. The Department of Communications (DoC) is in charge of policies and legislation related to 
communications technology (ICT), ensuring reliable a nd affordable ICT infrast ructure, strengthening 
the Independent Communications Authority of S outh Africa (ICASA), the regulator, enhancing the 
capacity of and overseeing state-owned enterprises (S OEs), and fulfilling South Africa's international 
ICT responsibilities.  The SOEs operating under th e DoC are:  the Independent Communications 
Authority of South Africa (ICASA), the South African Post Office, the South African Broadcasting Corporation, Sentech Ltd., the National Electronic Media Institute of South Africa, the Universal 
Service and Access Agency of South Africa,  and the za.com Domain Name Authority.
262  SOE 
Broadband Infraco was created under the Department  of Public Enterprises portfolio to provide 
"affordable" broadband services, particularly in unde r-developed and under-serviced areas, and ensure 
that bandwidth requirements for projects of nationa l interests are met.  Infraco owns the network 
infrastructure that was previously operated by Eskom (an SOE).263 
278. The Electronic Communications Act (Act No. 36 of 2005) promulgated264, during the review 
period, is aimed at facilitating the synergies between telecom, broadcasting, and information 
technologies services, while promoting competition in the sector through inter alia , facilitating access 
to networks.  Under the Act, a new licensing framework ("technologically neutral") for electronic 
communications network services (ECNS), electronic communications services (ECS), and broadcasting services should have been effective  as of early 2009.
265  However, it is not clear whether 
this was put in place as scheduled .  Licences issued under the previous regime, including value-added 
network services (VANS) licences, and under-serviced area licences (USALs)266, remain valid until 
their full conversion by ICASA267, in line with the new licensing  framework.  According to the 
provisions of the Act, the Competition Act applies to the telecom subsector;  ICASA cooperates with 
the Competition Commission on any type of investiga tion.  It appears, however, that Telekom often 
challenges ICASA decisions, leading to delays in implementing rulings. 
279. ICASA regulates broadcasting, postal, and telecom services268;  issues licences for related 
providers269;  enforces compliance with rules and regula tions;  monitors complaints and disputes 
                                                           
262 Department of Communications (2007).  
263 Department of Public Enterprises online information.  Viewed at:  http://www.dpe.gov.za/home.asp;  
and Bowman Gilfillan Attorneys online information, "L iberalization of the telecommunications sector in 
South Africa", February 2008.  Viewed at:  http ://www.bowman.co.za/LawArtic les/Law-Article.asp?id= 
2132417246 [27 April 2009]. 
264 The Act repealed the Independent Broadcasting Authority Act (Act No. 153 of 1993), the 
Telecommunications Act (Act No. 103 of 1996), and part of the Broadcasting Act (Act No. 4 of 1999).  The 
telecom legislation also comprises:  the Telegraph Messages Protection Act (Act No. 44 of 1963), Post Office 
Act (Act No. 44 of 1958), Sentech Act (Act No. 63 of 1996), Postal Services Act (Act No. 124 of 1998), Independent Communications Authority of South Africa Act (Act No. 13 of 2000), Department of 
Communications Act (Act No. 25 of 2002), and Electronic Communications and Transactions Act (Act No. 25 
of 2002). 
265 Mission économique de l'Ambassade de France en Afrique du Sud (2008b). 
266 USAASA (2008).   
267 According to ICASA's proposed conversion framew ork, potential licensees will be required to 
indicate, inter alia , whether they require a class or individual licence and the proposed geographic coverage 
area.  They will have to submit a comprehensive techni cal plan and start the roll-out of the network within 
12 months of the licence being issued.  It is not clear  whether the conversion fram ework is already in place ( IT 
News Africa , "ICASA to issue out licences to elect ronic communications service providers", 
18 November 2008.  Viewed at:  http://w ww.itnewsafrica.com/?p=1756 [24 April 2009]). 
268 Since 2007, the Postal Regulator, previously under the DoC, was incorporated into ICASA in terms 
of the ICASA Amendment Act (Act No. 3 of 2006).  ICASA's postal division registers and licences operators;  
ensures compliance with legislation, and licence conditions and regulations;  and fixes prices for the reserved postal area of the South African Post Office (ICASA, 2007).   WT/TPR/S/222/ZAF Trade Policy Review 
Page 358 
 
 
 brought against licensees;  manages the frequency sp ectrum;  and protects consumers.  Up to 2009, 
South Africa had two types of telecommunications licences:  individual and class licences.  Individual licences, for services with a significant impact on socio-economic development
270, are issued upon an 
invitation to apply by ICASA.  The criteria to issu e invitations are not disclosed.  Applications for 
class licences require registration with ICASA upon payment of a fee.271  Individual licences are valid  
for 20 years and class licences for ten years;  both are renewable.272  ICASA ensures that licensed 
operators contribute to the Universal Service a nd Access Fund (USAF) up to 0.2% of their annual 
turnover;  this amounted to ar ound R 181 million for FY 2007/08.273  Although ICASA collects the 
contributions, the Fund is managed by the Universal  Service and Access Agency of South Africa.  It 
is used to subsidize licensees in under-develope d areas as well as broadcasting, ECNS, and ECS 
infrastructure in public schools and public  education and training institutions.   
280. Under its GATS specific commitments Sout h Africa committed to license a second 
telecommunications supplier no later than 1 Ja nuary 2004, to compete against Telkom in 
long-distance, data, telex, fax, and private-leased circuits services.  As a result, a second operator was 
licensed, but Telkom continues to have a de facto monopoly over the network.  It is not clear how the 
access to the network is regulated in South Africa.  At present, there are two fixed-line operators:  
Telkom and Noetel Ltd.  Telkom, the incumbent operator, is partly privatized.274  Its main activity 
remains fixed telephony but it has diversified its  services to offer ADSL.  Telkom has five 
subsidiaries and holds part of SAT-3 submarine cable.275  Since 2006, the fixed-line market has been 
open to competition.  Telkom has until 1 November  2011 to unbundle the local loop that links the 
national telecom network to homes and businesses.276  Noetel Ltd. became South Africa's second 
fixed line operator in 2006277, but its services for businesses began only in 2007 and for private 
consumers in 2008.278  It is licensed as South Africa's first alternative infrastructure-based telecom 
provider, able to deliver wireline and wireless da ta telecoms services at national and international 
levels.279   
281. Teledensity has progressed substan tially, in South Africa, as a result of the rapid increase in 
the use of mobile communication services.  Mob ile phone operators include Vodacom, Mobile 
Telephone Networks (MTN), Ce ll C, and Virgin Mobile.280  Vodacom held 56% of the market in 
                                                                                                                                                                     
269 For the 2006/07 financial year, 15 private telecom networks (PTN) services licences, 81 VANS 
licences, and 3 USALs.  USALs are issued  for areas with less than 5% density, upon an invitation to apply.   
270 Bowman Gilfillan Attorneys online information, "The Electronic Communications Act:  An 
overview", November 2007.  Viewed at:  http:// www.bowman.co.za/LawArticles/Law-Article.asp?id= 
2132417221 [23 April 2009]. 
271 The fees range from R 3,000 for broadcasting licences to R 10,000 for ECNS and ECS licences 
(Government Gazette  No. 32084, 1 April 2009).   
272 Chapter 3, Electronic Communications Act (Act No. 36 of 2005). 
273 ICASA (2007);  and USAASA (2008).   
274 The State retains 38% of direct shares and a further 15.7% through the Public Investment 
Corporation.  Other shareholders include Elephant Consortium (5.6%) and Telkom subsidiaries (4.3%);  36.4% 
of the shares are listed on the Johannes burg and New York stock exchanges.   
275 These are TDS Directory Operations, Multi-Links, Africa Online, Swiftnet, and Telekom Media.   
276 Government Communication and Information System (2008). 
277 Neotel is owned by Eskom Holding Ltd. and Transnet (both are SOEs) (30%), Nexus Connexion 
Ltd. (19%), and SEPCO Ltd. (51%). 
278 Mission économique de l'Ambassade de France en Afrique du Sud (2008b). 
279 Neotel online information.  Viewed at:  http://www.neotel.co.za/neotel/view/neotel/en/page1? 
[26 April 2009]. 
280 All are privately owned:  Vodacom is owned by Vodafone (65%) and Telkom;  MTN is owned by 
several private investors;  Cell C is owned by 3C Telecommunications (Pty) (60%) and CellSAF;  and Virgin Mobile is a joint venture between Virgin Management and Cell C.   SACU-South Africa   WT/TPR/S/222/ZAF 
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2008;  MTN, Cell C, and Virgin Mobile provided services to 15.1 million, 5.4 million, and 
400,000 customers, respectively, in mid 2008.  Vodaco m offers cellular, broadband connectivity, and 
internet services as well as communications service por tfolios for corporate customers.  MTN, Cell C, 
and Virgin Mobile offer cellular services;  in a ddition, MTN offers business solutions and Cell C 
mobile internet services. 
282. Internet development has been slow and penetra tion is low (9%).  South African internet user 
numbers have increased at a much slower pace th an in other African countries;  in 2008, they 
represented only 9% of Africa's total internet users.281  The number of internet subscribers has 
remained stable since 2005 (Table IV.7);  the m onopoly in fixed-line telephony has hindered internet 
development.  Telkom started commercial AD SL trials in 2002 and phased roll-out in 2003.282  In 
2007, 90% of ADSL subscriptions were pr ovided by Telkom, Vodacom, and MTN.283  Other internet 
providers include Internet Solutions, Neotel, MWeb , Vox Telecom, Cell C, iBurst, Sentech, Verizon 
Business, and Data Pro.  Many remote villages ar e now connected to the internet through public 
terminals in 700 post offices.  Some 3.9 million ac tive unique browsers were registered in South 
Africa in May 2007.284 
283. Liberalization of telecom services has continue d during the period under review;  more than 
300 enterprises have been granted licences to build  their own or lease telecom network since 2003.  
This could have a major impact on the level of co mpetition and could help reduce prices;  customers 
have complained about the high cost of telecom services.285  The dominance of a few firms in the 
sector translate into high prices and monopoly rents.  For instance, ADSL broadband tariffs are 
particularly high by international standards, reflecting Telkom's domi nant position.  High 
telecommunication prices are detrimental to the Government's universal service goal, since telecom services are not affordable for parts of the population. 
284. The South African Post Office (SAPO) provides postal and related services in 2,250 offices.  
SAPO has a universal service obligation (providing services even though they are not commercially viable;  hence giving citizens equal access to a basi c letter service);  it was granted exclusive rights 
and privileges, including a monopoly on letters up to 1 kg.  SAPO operates under a 25-year licence.
286   
285. South Africa is a member of the International Telecommunications Union, the 
Telecommunication Regulatory Association of Sout hern Africa, the International Institute of 
Communication, the African Communication Regulati on Authorities Network, the Universal Postal 
Union, the Pan-African Postal Union, the Council of the Commonwealth Postal Administrations, and 
the Southern African Transport and Communications Commission.   
                                                           
281 ICEX online information, "El número de usuarios de Internet se estanca en Sudáfrica", 
8 March 2009.  Viewed at:  http://www.icex.es/icex/cda/controller/pageICEX/0,6558,5518394_5519005_ 
6366453_4201559_0_-1,00.html [27 April 2009]. 
282 OECD (2007). 
283 Mission économique de l'Ambassade de France en Afrique du Sud (2008b). 
284 Government Communication and Information System (2008). 
285 ICEX online information, "Sudáfrica asiste a una progresiva liberalización del sector de 
telecomunicaciones", 16 February 2009.  Viewed at:  http://www.icex.es/icex/c da/controller/pageICEX/ 
0,6558,5518394_5519005_6366453_4197938_0_-1,00.html [27 April 2009];  and ICEX online information, "Reestructuración en el sector de telecomunicacione s en Sudáfrica", 15 June 2007.  Viewed at:  
http://www.icex.es/icex/cda/controller/pageICEX/0,6558,5518394_5519005_5604470_626690_0_-1,00.html 
[27 April 2009]. 
286 Government Communication and Information System (2008). WT/TPR/S/222/ZAF Trade Policy Review 
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 (iv) Transport 
286. Transport, storage, and communication accounted for 10% of GDP in 2008 (Table I.1).  
According to a transport industry survey, land transport was the largest contributor to GDP in 2002, 
followed by air and maritime transport.287  The 1996 White Paper on National Transport Policy set the 
general framework to develop tran sport networks and infrastructure.288  The Department of Transport 
(DoT) develops, co-ordinates, and implements tran sport policies.  It has established several public 
entities that are in charge of transport services.  These include the:  South African National Roads 
Agency Ltd.;  Cross-Border Road Transport Agency;  Passenger Rail Agency of South Africa;  South 
African Civil Aviation Authority;  Airports Comp any South Africa Ltd.;  Air Traffic and Navigation 
Services Company Ltd.;  and South African Maritime Safety Authority. 
287. The legislation that regulates transport services is extensive.289  Since the last review of 
South Africa in 2003 one of the major changes to th is body of legislation has been the enactment of 
the National Ports Act (Act No. 12 of 2005), which calls for the establishment of the National Ports 
Authority and a Port Regulator, and to allow for certa in ports to be administered by the National Ports 
Authority (see below). 
288. There is a long-standing need for major reforms in South Africa's transport sector.  Transnet, 
a state-owned enterprise, continues to be the most important player in the sector290, operating and 
controling South Africa's freight infrastructure.  Tran snet is divided into five companies:  Transnet 
Freight Rail (freight rail), Transnet Rail Engineer ing (rolling stock maintenance), Transnet National 
Ports Authority (formerly the National Port Authorit y (NPA) in charge of la ndlord function for ports), 
Transnet Port Terminals (port and cargo terminals management), and Transnet Pipeline (petroleum 
and gas products storage).  Transnet's monopolistic position in different transport segments allows for 
cross-subsidization;  the company uses the profits from export-related transport activities to subsidize 
loss-making activities such as general freight and passenger transport.291  In this context, the 2005 
National Freight Logistics Strategy sought to reduce transport costs by promoting efficiency in the freight system through better integration of ports, air ports, and land transport, and by ensuring safety.  
The Strategy targeted increased competition in the freight system
292, but this has not yet been attained. 
                                                           
287 Department of Transport (2005).   
288 This is South Africa's most recent transport policy. 
289 It includes, inter alia , the:  Air Service Licensing Act (Act No. 115 of 1990), as amended;  Air 
Traffic and Navigation Services Compan y Act (Act No. 45 of 1993), as amended;  Airports Company Act (Act 
No. 44 of 1993), as amended;  Aviation Act (Act No. 74  of 1962), as amended;  Aviation Laws Amendment Act 
(Act No. 98 of 1996);  Carriage by Air Act (Act No. 17 of 1946), as amended;  Carriage of Goods by Sea Act 
(Act No. 1 of 1986);  Cross-Border Road Transport Act (Act No. 4 of 1998);  International Air Services Act (Act No. 60 of 1993);  Marine Traffic Act (Act No. 2 of 1981), as amended;  Merchant Shipping Act (Act 
No. 57 of 1951), as amended;  National Land Transport Interim Arrangements Act (Act No. 45 of 1998);  
National Land Transport Transition Act (Act No. 22 of 2000), as amended;  National Roads Act (Act No. 54 of 1971), as amended;  Railway and Harbour Purchase Act (Act No. 47 of 1977), as amended;  Road 
Transportation Act (Act No. 74 of 1977), as amended;  Ship Registration Act (Act No. 58 of 1998);  South 
African Civil Aviation Authority Act (Act No. 40 of 1998);  South African Maritime Safety Authority Act (Act No. 5 of 1998);  South African National Roads Agency Limited and National Roads Act (Act No. 7 of 1998);  
and Transnet Limited Amendment Act (A ct No. 52 of 1991) (For more details, see the Department of Transport 
online information, "Library:  Legislation".  Viewed at:  http://www.transport.gov.za/library/ 
legislation/index.html). 
290 Transnet reports to the Department of Public Works. 
291 OECD (2008c). 
292 Department of Transport (2005).   SACU-South Africa   WT/TPR/S/222/ZAF 
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289. Under the GATS, South Africa made commitments on road transport services, including 
passenger transportation, freight transportation, and maintenance and repair of road transport 
equipment. 
(a) Air transport 
290. South Africa has ten major airports, of wh ich three are international (Johannesburg, 
Cape Town, and Durban).293  During the period under review, some 320,000 tonnes  were transported 
by air and the majority of the visitors arrived by air.294  Air transport services that allow service 
providers and consumers flexibility and choice, are important to support the tourism sector in 
South Africa.  However, as in the other transport seg ments, the role of the State, through Transnet, 
remains substantial, and the lack of competition in  the sector needs to be addressed with a view to 
reducing the costs of travel to South Africa.  This  is the aim of the 2006 Airlift Strategy, a five-year 
strategy that regulates air transport to support tourism growth. 
291. The majority state-owned Airports Company South Africa Ltd. (ACSA) owns and operates 
South Africa's main airports, which account for 98% of commercial air traffic.295  S o m e  o f  t h e  
services provided the ACSA are open to competition.  Third parties must participate in a tender 
organized by ACSA to be eligible to supply "certa in" airport services.  There are no plans to privatize 
ACSA.  In 2008, ACSA's airports handled ove r 36 million passengers (up from 23 million in 2003) 
and 291,000 landings;  it expects 44.4 million passe ngers to arrive by air and 600,000 planes landing 
per year by 2012.296  As a result of this forecast, ASCA is  expanding and upgrading several airports 
(e.g. opening O.R. Tambo new international pier;  upgrading George airport;  rehabilitating Cape 
Town International Airport main runway;  and starting the construction of the new airport at La 
Mercy, which is to replace Durban as a hub for the KwaZulu Natal province).297  The Department of 
Transport will also implement the National Ai rports Development Plan (NADP) to improve 
infrastructure.  The NADP's objectiv es are two-fold:  to asses the type of airport network needed for 
South Africa to meet its developmental goals;  a nd to design a framework on how airports should be 
funded, managed, and operated, and how infrastructur e investment should be determined, approached, 
and coordinated. 
292. The authorities note that South Africa follows the Chicago Convention with regard to policy 
on airline ownership and control.  Therefore, South Africa only allows foreign ownership in one of its 
designated national airlines, up to a maximum of 25% of the equity of the company. 
293. The South African Civil Aviation Authority (SAC AA) controls and regulates civil aviation 
for safety and security.  Air Traffic Navigation Services (ATNS) provides air traffic control and information, and aeronautical support services at 20 airports throughout South Africa. 
294. State-owned (South African Airways (SAA), and SA Express) and privately owned airlines 
(Comar, Interair, 1 Time, Airlink, Airlink Re gional, and Pelican Air Services) operate in 
South Africa.  However, SAA, which is wholly owned by Transnet, is the largest carrier in Africa;  it 
                                                           
293 The other seven for domestic use only, are Bloemfontein, East London, George, Kimberley, 
Pilanesburg, Port Elizabeth, and Upington. 
294 Department of Transport (2005).   
295 ACSA currently provides:  passenger processing services; baggage handling  services;  
infrastructure (runways, taxiways, and parking bays) for landing and take-off;  retail services through 
concessionaires (e.g. food and beverage, duty free, and ca r rental);  car parking fac ilities;  advertising services; 
and ramp-handling services. 
296 Airports Company South Africa Ltd. (2008);  and Department of Transport (undated b). 
297 Airports Company South Africa Ltd. (2008);  and Government Communication and Information 
System (2008). WT/TPR/S/222/ZAF Trade Policy Review 
Page 362 
 
 
 serves more than 700 world destinations and 20 dom estic routes.  According to the authorities, there 
are 107 international carriers operating from South Africa under bilateral air service agreements.  
Cabotage is not allowed.  South Africa does not ha ve any open skies agreements, but has started to 
renegotiate and review existing agreements in line with the key principles of the Yamoussoukro 
Decision (YD) within the continent. 
(b) Maritime services 
295. Transnet National Ports Authority (NPA), establis hed in 2000, controls South Africa's seven 
commercial ports:  Cape Town, Durban, East London, Mossel Bay, Port Elizabeth, Richards Bay, and 
Saldanha.  A new port is under cons truction at Ngqura.  Each port handles different commodities, and 
offers different types of services and facilities (Table IV .8).  The main ports in terms of the volume of 
cargo handled are Richards Bay, Durban, and Saldanha (Table IV.9).  During the first quarter of 2008, 
South Africa's ports handled over 43 million tonnes of  merchandise;  more than 95% of its trade 
transits through its ports.298  The volume of exports, mainly bulk (coal and iron), is three times higher 
than the volume of imports.299 
Table IV.8 
Port activities, 2009 
Port Activity 
Cape Town A full service, general cargo port;  dry docks and sync rolift available for ship repair s;  extensive pre-cooling faci lities at 
the fruit terminal to cater for deciduous fruit exports 
Durban South Africa's main general cargo, bulk liquid, and container port for a wide  range of commodities (e.g. coal, mineral 
ores, granite, chemicals, petrochemical, steel, forest products , citrus products, sugar, and grain);  also has a dry dock for 
ship repair 
East London The only river-based port in South Africa;  offers c ontainer, automotive, break bulk,  bulk grain, and bulk liquid ( refined 
petroleum products) facilities;  imports are mainly contai nerized vehicle components, vehicles, wheat, timber, and 
petroleum;  exports are mainly motor vehi cles, steel, maize, and agricultural products 
Mossel Bay Provides off-shor e handling facilities that enable import and export of refined products and servicing the local fis hing 
industry 
Port Elizabeth Handles imports of containe rized components and raw materials for the vehicle manufacturing industry;  also hand les 
exports of agricultural products, timber, wool, citrus and deciduous fruit, manganese ore, motor-vehicle-related 
products, and steel 
Richard Bay Has four cargo terminals:  (i) the dry bulk terminal  handles imports and exports of  ores, minerals, and woodchips;  (ii) 
the multi-purpose terminal handles break bulk cargoes, including ferro-chrome, pig iron, steel, forest products, granite, 
aluminium, bagged cargo, containers, heavy lifts, and abnormal lo ads;  (iii) a coal terminal , one of the largest in the 
world, with a current capacity to export 71 million tonnes per annum;  and (iv) a chemical tank farm for liquid bulk 
products stored in tanks 
Saldanha The only iron-ore handling port in South Africa;  also handles  base metals, steel, minera l sands, granite, and crude o il 
Source:  Government Communication a nd Information System (2008), South Africa Yearbook 2007/08 , March;  
 Department of Transport (2008), Economic Analysis:  Transport Picture , First Quarter, May;  and National Ports 
 Authority online info rmation.  Viewed at:  http://www.transnet nationalportsauthority. net;  and information 
 provided by the South African authorities.   
Table IV.9 
Shipping services, 2003-08  
Service 2003 2004  2005  2006  2007  2008  
Vessels arrived (number) 249,540,435  241,521,696 256,650,759 264,058,969 279,794,829  288,820,070 
Cape Town  48,932,304  44,501,297 47,635,324 47,624,854 47,557,954  53,447,789 
Durban 87,005,966  81,700,001 90,277,199 96,660,086 105,713,201  110,332,744 
East London 8,906,144  8,905,295 8,488,914 8,153,991 8,435,146  9,195,405 
Mossel Bay 2,544,121  2,979,775 2,661,560 2,887,465 3,220,447  3,365,801 
Table IV.9 (cont'd) 
                                                           
298 Department of Transport (2008a).   
299 OECD (2008c). SACU-South Africa   WT/TPR/S/222/ZAF 
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Service 2003 2004  2005  2006  2007  2008  
Port Elizabeth 24,095,741  25,756,823 26,237,291 27,446,345 30,311,764  30,066,961 
Richards Bay 56,898,084  57,604,799 58,250,805 57,079,780 58,038,818  58,684,181 
Saldanha 21,158,075  20,073,706 23,099,666 24,206,448 26,517,499  23,727,189 
Total cargo (tonnes) 171,621,146  168,750,600 173,555,069 179,983,594 183,328,184  185,079,584 
Cape Town  4,731,118  3,701,008 3,508,711 4,134,740 4,081,968  3,205,094 
Durban 41,273,633  40,026,277 40,778,495 43,861,241 41,883,269  41,402,495 
East London 1,417,471  1,478,399 1,647,848 1,506,111 1,832,894  1,982,498 
Mossel Bay 1,221,228  1,628,691 1,597,950 1,518,597 1,802,992  1,995,491 
Port Elizabeth 3,683,111  4,297,069 4,189,733 4,870,513 5,522,362  5,427,094 
Richards Bay 87,797,601  85,688,419 86,623,684 86,319,200 84,517,409  84,533,584 
Saldanha 31,496,984  31,930,737 35,208,648 37,773,192 43,687,290  46,533,328 
Container traffic (TEUs) 2,414,567  2,632,771 3,014,236 3,416,780 3,712,090  3,900,319 
Cape Town  510,379  573,021 690,895 782,868 764,005  767,501 
Durban 1,565,606  1,686,554 1,899,065 2,198,600 2,479,232  2,642,165 
East London 45,747  53,735 49,338 38,308 41,986  57,418 
Mossel Bay .. .. .. .. .. .. 
Port Elizabeth 288,341  313,923 369,759 392,813 422,846  423,885 
Richards Bay 4,494  5,538 5,179 4,191 4,021  9,350 
Saldanha .. .. .. .. .. .. 
Employment (number) 3,144 2,949 2,854 2,700 2,669 2,673 
Cape Town  713 683 680 651 634 624 
Durban 1,464 1,349 1,272 1,198 1,161 1,142 
East London 215 194 190 176 176 174 
Mossel Bay 27 27 26 26 30 25 
Port Elizabeth 269 257 252 247 258 287 
Richards Bay 278 265 257 239 238 240 
Saldanha 178 174 177 163 172 181 
.. Not available. 
Note: TEUs = twenty-foot equivalent container units. 
Source:  National Ports Authority online informatio n, "Port Statistics".  Viewed at:  
 http://www.transnetnationalportsaut hority.net/NPA_Port_statis tics.html;  and information provided by the 
 South African authorities.  
296. Despite the importance of the ports for trade, their operations appear to be inefficient and 
expensive.  Productivity is low, which often cr eates a backlog, and poor integration with land 
networks further undermines port efficiency.  The high cost of port operations impedes the 
development of South African trade, and thus of  SACU as whole, and undermines the customs unions 
international competitiveness.  The 2002 National Commercial Ports Policy called for increased 
investment, and improvement of the quality and speed of operations in ports to ensure effective and 
efficient services.   
297. The National Ports Act (Act No. 12 of 2005) enacted in 2005 provides for the establishment 
of the National Ports Authority and an independent National Port Regulator, and stipulates that certain 
ports should be administered by the National Ports Authority.  It is not clear which provisions of this legislation have been implemented.   In 2007, the National Port Regulator was set up to regulate the 
ports system, ensure "equal" access, and monitor Transnet NPA activities.  However, Transnet 
continues to play a dominant role in the sector;  Transnet National Ports Authority (NPA) owns and 
manages infrastructure in all major South African por ts, while Transnet Port Terminal has operations 
in various ports.
300  Tariffs are also set by Transnet.  Acco rding the authorities, Transnet does not have 
                                                           
300 Transnet (2008). WT/TPR/S/222/ZAF Trade Policy Review 
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 any exclusive operating rights and private compan ies compete with Transnet in port operations. 
Contracts to operate in a port are granted through a bidding process. 
298. The South African Maritime Safety Authority (SAMSA) is responsible for maritime safety 
issues (e.g. ship registration, marine incidents,  and vessel traffic);  in 2007/08, it registered 
1,129 ships under the South African flag.  Around 66% of SAMSA's income comes from levies on ships calling at South African ports;  the NPA charges a 2.5% fee for collecting the levies. 
299. Government policy, as outlined in the 2008 Draft Maritime Transport Strategy is aimed at  
increasing South Africa's presence in international maritime transport services, by increasing the number of vessels sailing under South Africa's nati onal flag, and providing a clear framework for 
investors. 
300. Cabotage has been allowed sin ce the release of the 1996 White Paper on National Transport 
Policy.  South Africa allows local and foreign-owne d vessels on international trade routes to carry its 
coastal cargoes.
301  
301. South Africa participates in three linear conferences.302  It is a member of the International 
Maritime Organization.  It had signed several international maritime agreements303, including the 
Indian Ocean Memorandum of Understanding (MoU) on Port State Control and the West and Central 
Africa MoU on Port State Control (Abuja MoU).304 
(c) Land transport 
302. Land transportation, including road and rail, is important in South Africa for the transport of 
passengers and merchandise.  The South African National Roads Agency Ltd. (SANRAL) is in charge 
of national road maintenance;  other roads are maintained by provincial and municipal 
governments.305  National roads comprise tolled and non- tolled roads.  Tolling provides SANRAL 
with funding to maintain and upgrade roads;  some  1,300 km of its 2,400 km tolled roads have been 
given in concession to private compani es, through public-private partnership.306  Public funds are 
allocated to SANRAL to maintain the non-tolled roads.  In 2008, the Government allocated 
R 70 billion for road maintenance and upgrading for the 2009-11 period.307  Road infrastructure is 
important as some 1.4 billion tonnes of merc handise are carried by road each year.308  Given the 
importance of cross-border transport in South Africa and for SACU as a whole, since 1998 the 
Cross-Border Road Transport Agency (C-BRTA) has been in charge of improving cross-border 
merchandise and passenger road traffic, introducing co mpetition, and reducing constraints to traffic.  
The agency is financed by fees charged for issuing cross-border permits.  The procedures to obtain a 
                                                           
301 Department of Transport (2008a). 
302 The Europe Southern African  (ESA) Conference, United St ates/Southern Africa (USSA) 
Conference, and Japan, Hong-Kong, South African Shipping (J AHOSAS) Conference. 
303 For further details, see WTO (2003). 
304 The Abuja MoU is aimed at eradicating the operation of sub-standard shipping practice, protecting 
the marine environment, and improving the working and living conditions of persons on board ships (Africa Union online information, "Conferences and Events:  Ar chives".  Viewed at:  http://www.africa-union.org/root/ 
au/index/archive1_April_2008.htm [21 April 2009]. 
305 Provincial governments, and municipalities are in charge of maintaining provincial roads and 
bridges, and local roads, respectively (Government Communication and Information System,2008).  
306 The concessions are for 30 year s.  They were granted to Bakw ena for the N3 Gauteng-KwaZulu-
Natal, N3 Toll Concession for the N3 Mpumalanga-KwaZu lu-Natal, and Trans Africa  Concessionaires for the 
N4 East (Maputo Development Corridor) (Sou th African National Road Agency, 2008). 
307 Department of Transport (2008b).  
308 The main road freight corridors are Gauteng-Durban, Gauteng-Cape Town, and Gauteng-Maputo 
(Government Communication and Information System, 2008). SACU-South Africa   WT/TPR/S/222/ZAF 
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permit were not specified.309  South Africa has signed multilate ral and bilateral agreements to 
facilitate and encourage cross-border ro ad flow of merchandise and passengers.310 
303. Some 180 million tonnes of merchandise are carried by rail annually.311  The railway sector 
continues to be dominated by the State.  The st ate-owned company Transnet Freight Rail manages the 
largest railroad system in Southern Africa;  a network (around 22,000 km) connects South Africa's ports and the hinterland with other sub-Sahara n networks;  1,500 km are heavy-haul lines.
312  Transnet 
Freight Rail operates mainly general freight busin ess and the transport of iron and coal.  Traffic 
volume and the types of merchandise carried by ra il are expected to increase as a result of the 
implementation of the 2005 National Freight Logistics Strategy.313 
304. South Africa's passenger rail companies (S outh African Rail Commuter Corporation, 
Metrorail, and Shosholoza Meyl) merged recently into the Passenger Rail Agency of South Africa 
(PRASA).314  PRASA provides commuter rail services in urban metropolitan areas, and regional and 
long-distance passenger services.  Commuter rail ser vices continue to be subsidized but remain 
insufficient.315  The Government is implementing the National Passenger Rail Plan to improve 
passenger rail infrastructure.316  In addition, the construction of the 80-kilometre Gautrain Rapid Rail 
Link, connecting Johannesburg, Pretoria, and O.R Tambo Internatioanl Airport, scheduled to be 
completed by 2011, should improve passenger rail services.317  
(v) Tourism  
305. In 2007, the travel and tourism subsector contributed 8% of GDP, employed some 
950,000 people (11.3% of total employment), and generated re venue of R 163 billion (up from 
R 104 billion in 2003).318  Government expenditure on tourism remained stable at some 0.2% of GDP 
over the 2003-07 period (Table IV.10).  Despite th e increase in foreign arrivals since 2003, the 
average amount spent by each tourist (per day) dropped from around R 1,500 in 2003 to R 880 in 2007.
319  Nevertheless, tourism remains South Africa's main service export. 
306. In 2007, South Africa received 9 million foreign visitors, mainly from other African countries 
and Europe.320  It ranked 28th as a world tourist destination (up from 32nd in 2005)321 and was the 
                                                           
309 There are 14-day, 3-month, and 1-year permits (C-BRTA, 2007) 
310 Multilateral agreements include the SADC Protocol on Transport, Communications, and 
Meteorology, and the SACU Memorandum of Understanding (MoU).  South Africa signed bilateral agreements with Mozambique, and an MoU with Namibia and Botswana (Government Communication and Information 
System, 2008). 
311 Department of Transport (2005).   
312 South Africa Information online, "South Africa's transport network".  Viewed at:  
http://www.southafrica.info/business/enconomy /infrastructure/transport.htm [April 2009]. 
313 Government Communication and Information System (2008). 
314 Department of Transport (2008b). 
315 Total subsidies amounted to R 329 million for FY  2007/08 (Department of  Transport, 2008b). 
316 Department of Transport (undated a).  
317 It will connect Johannesburg, Pretoria, and O.R Tambo International Airport.  Its construction 
involves a partnership between the Gauteng provincial government and Bombelo Concession Company (a Canadian-French-South African consortium). 
318 Estimates for 2008 indicate a contribution of 8.5% of GDP and employment of around 
1 million people (World Travel and Tourism Council, 2009). 
319 South African Tourism (2008). 
320 SADC countries remain the major source of African foreign visitors.  European tourist came mainly 
from the United Kingdom, Germany, the Netherland s, and France (South African Tourism, 2008).  
321 South African Tourism (2008). WT/TPR/S/222/ZAF Trade Policy Review 
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 leading destination in Africa, absorbing 20% of all visitors to the region.322  Leisure and business were 
the main reasons for visiting South Africa.323  Although South Africa's overall perception as a safe 
and secure tourist destination has somewhat improve d, growth in tourism could expand further if 
crime and violence were not still seen as major problems.   In this regard, the Government is taking 
measures (e.g. improvement in the police force and a wider application of hi-tech crime-detection 
methods) to improve safety and security for the 2010 FIFA World Cup.  Moreover, as result of the World Cup there will be a substantial improvement in tourism-related infrastructure and increased 
international exposure for South Africa;  these should boost tourism in the long-term.
324 
Table IV.10 
Selected travel and to urism indicators, 2003-07 
 2003 2004 2005 2006 2007 
Foreign arrivals 6,504,890 6,677,839 7,368,742 8,395,833 9,090,881 
Africa and Middle East  4,485,064 4,673,724 5,407,218 6,321,068 6,907,562 
Americas 262,496 262,496 322,099 358,096 387,379 
Asia and Australiasia 265,628 275,001 274,930 307,003 333,390 
Europe 1,319,172 1,287,057 1,308,634 1,381,881 1,413,563 
Economic contribution (R b illion) 104.0 102.3 121.6 137.6 159.6 
Direct  43.2 42.0 50.7 55.7 62.8 
Indirect 60.8 60.3 70.9 81.9 96.8 
Government expenditures in travel and tourism (% of GDP) .. 0.2 0.2 0.2 0.2 
Investment in travel and touris m (US$ billion) .. 5.3 5.8 6.8 8.3 
Employment (No.)  1,230,600  1,094,400  1,258,300  1,301,700  1,354,100 
Direct industry employment 389,600 344,800 398,900 404,800 413,100 
Economy employment 841,000 749,600 859,400 896,900 941,000 
Contribution to GDP (%) 8.2 7.3 7.9 7.9 8.0 
Contribution to total employment (%) 13.1 11.3 12.1 11.3 11.3 
Average spend per foreign tourist per day (R) 1,544 800 1,000 1,000 880 
Average length of stay (nights) 10.0 9.0 8.0 8.2 7.9 
.. Not available.  
Note: Travel and tourism includes transport, accommodation,  catering, recreation, and services for visitors.  
Source:  The Presidency Republic of South Africa (undated), Development Indicators 2008 .  Viewed at:  
 http://www.info.gov.za/view/Down loadFileAction?id=85218;  World Travel and Tourism Council (2009), Travel 
 and Tourism  Economic Impact 2009:  South Africa , March.  Viewed at:  http://www.wttc.o rg/bin/pdf/ 
 original_pdf_file/southafrica.pdf;  and S outh African Tourism (various issues), Annual Report .  Viewed at:  
 http://www2.southafri ca.net/satourism/res earch/resear ch.cfm. 
307. The Tourism Act (Act No. 72 of 1993), as amended in 1996 and 2000325, remains the main 
legislation regulating tourism and related activities.  The Act aims to regulate the subsector by 
coordinating the activities of those engaged in tour ism and establishing standards for tourism facilities 
and other services provided to tourists.  It au thorizes the Minister to establish a grading and 
classification scheme for accommodation, and schemes  for "prescribed" activities.  The Tourism 
Grading Council of South Africa assesses and ac credits accommodation and food and beverage 
outlets on a voluntary basis;  a star grading is aw arded.  The Act also established the South African 
Tourism Board (SATOUR)326, and introduced provisions on the membership and composition of the 
Board, and on training and registrati on of tourist guides.  All tourist guides must be registered in each 
                                                           
322 UNWTO (2008).  
323 Eight of its cultural and natural sites are considered UNESCO World Heritage (UNESCO World 
Heritage online information.  Viewed at:  http://whc.unesco.org/). 
324 EIU (2008). 
325 Tourism Amendment Act (No. 105 of 1996), Tourism Amendment Act (No. 8 of 2000), and 
Tourism Second Amendment Act (No. 70 of 2000).   
326 Formally known as SATOUR, it has been replaced by South African Tourism (SAT). SACU-South Africa   WT/TPR/S/222/ZAF 
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province in which they wish to work as guides.  Th ere is also a national Registrar of Tourist Guides  
in the Department of Environmental Affairs and T ourism (DEAT).  Foreigners may only register as 
tour guides if they have a valid work permit or ha ve obtained South African residency, completed the 
relevant accredited guiding training, and are register ed with the provincial registrar of tour guides in 
the province in which they wish to operate. 
308. Foreign travel agents must register (like most other businesses) under the South African 
Companies Act, and comply with any relevant re gulations including those of IATA.  Most travel 
agencies in South Africa are members of the Associa tion of South African Travel Agents (ASATA);  
membership is voluntary.  However, for a foreign-ow ned travel agent to be registered as a member, 
ASATA requires the operating enterprise to be regist ered in South Africa (under the Companies Act), 
all foreign directors to have a South African Bank Account;  and a letter of "comfort" from the parent 
company, if based outside South Africa, as a ty pe of insurance should the local-based operation 
default on its contracts. 
309. The Department of Environmental Affairs and Tourism (DEAT) is responsible for 
formulating, monitoring, and implementing the nati onal tourism policy and strategy.  It works in 
partnership with the public and the private sectors;  its partners include South African Tourism (SAT), 
which replaced SATOUR327;  the Tourism Grading Council of South Africa (TGCSA);  and the 
Tourism Business Council of South Africa (TBCSA ).  Provincial governments, through their own 
tourism organizations, are responsib le for marketing and promoting lo cal tourism.  Local governments 
are in charge of policy implementation, environm ental planning and land-u se, product development, 
marketing, and promotion.  Communities are expect ed to promote responsible tourism.  However, 
many communities, in particular in rural areas, ha ve not participated actively in tourism activities, 
despite enjoying significant tourism resources.328 
310. Given the importance of tourism for the economy , both as source of foreign exchange and of 
labour, South Africa has implemented several prog rammes to further develop tourism during the 
review period.  The 2002 Tourism Growth Strategy was revised to allow SAT to market South Africa 
more effectively329;  the third revision (2008-10) focuses on markets with short- to medium-term 
opportunities.330  The Global Competitiveness Programme for the Tourism Industry in South Africa 
(2003-05), aimed at further developing the touris m industry identified key strategic challenges 
including:  insufficient investment in infrastructure and transport (access by air and public transport);  
poor safety and security;  lack of information;  modest innovation and product development;  lack of 
involvement of SMEs in the sector;  and need to train labour and ensure quality.331  These issues have 
been addressed through, inter alia , new bilateral agreements to incr ease flight frequency, a Safety and 
Awareness Strategy, and the Tourism Support Programme  to stimulate investment in the sector.  The 
Domestic Tourism Growth Strategy launched in 20 04, focused on developing the untapped domestic 
tourism market.332  Latest data provided by the authorities indi cate that holiday trips as a percentage of 
total trips increased from 7.5% in 2006 to 16.8% in 2007, which is consistent with strategy's goals.  
                                                           
327 SAT is a DEAT statutory body.   
328 World Travel and Tourism Council (2002);  and Department of Environmental Affairs and Tourism 
(1996). 
329 For details on the objectives of the Tourism Growth Strategy, see WTO (2003).  
330 South African Tourism (undated b).  
331 Key challenges include:  transformation;  market access;  air access;  public transport;  safety and 
security;  information;  innovation;  product development, investment, and small, medium, and micro enterprises 
development;  skills development and quality assurance;  and building local clusters and the role of the Government (Department of Environmental Affairs and Tourism/Department of Trade and Industry/South 
African Tourism, 2005). 
332 Atos KPMG Consulting/Department of Environmental Affairs and Tourism/South African Tourism 
(2006). WT/TPR/S/222/ZAF Trade Policy Review 
Page 368 
 
 
 The Business Tourism Growth Strategy (2008-10) is aimed at converting South Africa into a top-ten 
business destination by 2010.333   
311. Various incentive schemes are also in place, aimed at improving tourism services 
(Table AIII.4).  In 2005, the DEAT, in partnershi p with TBCSA, issued the Tourism BEE Scorecard 
and Charter (based on the Black Economic Empowerment  strategy) to ensure that opportunities and 
benefits from tourism will extend to black South Africans.334   The Tourism Enterprise Programme 
launched in 2000335, was institutionalized in 2008 as the Touris m Enterprise Partnership, to ensure the 
sustainability of the long-term support to SMMEs.336  Financial assistance in the form of preferential 
loans is provided through the Development Bank of South Africa to SMEs involved in tourism; and 
through the Industrial Development Corporation (IDC) to medium and large tourism projects.337  IDC 
provides financing for green-field and expansion project s in the tourism sector of R 1 million or more.  
The Development Bank of Southern Africa (DBSA) funds local government investment in tourism 
infrastructure.  Due to its economic importance in  terms of job creation and contribution to GDP, 
tourism has been identified as a high-priority sector under the Accelerated and Shared Growth 
Initiative for South Africa (AsgiSA), launched in 200 6 to accelerate growth and to reduce poverty and 
unemployment.338  Three incentive programmes are also made  available to the tourism sector by the 
DTI:  the Tourism Support Programme (TSP), a targeted incentive programme to support the development of tourism enterprises that will stimulate job creation and encourage investment in 
tourism by offering grants
339;  the Cooperatives Incentive Scheme, a generic incentive scheme to 
stimulate the creation and effective operation of  cooperatives;  and the Black Business Suppliers 
Development Programme, aimed at stimulating black economic empowerment (Table AIII.4). 
312. Poor quality services and other weaknesses in Sout h Africa's tourism industry are attributed to 
a lack of skills and training.  Therefore, specializ ed institutions to train and upgrade personel engaged 
in the tourism industry, including the Tourism,  Hospitality and Sport Education and Training 
Authority (THETA), have become more relevant. 
313. South Africa is a member of the Regional Tourism Organization of Southern Africa 
(RETOSA)340, the UNWTO, the Indian Ocean Tourism Organization (IOTO), and the Africa Travel 
Association (ATA).  It signed an MOU with China in 2005, providing South African tourist guides training in basic Chinese language.  Efforts ar e also made to develop tourism through the 
India-Brazil-South Africa (IBSA) dialogue:  since tourism was identified as a key cooperation area
341, 
an action plan was agreed on capacity building in culture/heritage, joint marketing initiatives, 
eco-tourism and nature conservation, and management  of cultural festivals.  South Africa has signed 
tourism agreements with 20 countries.342 
314. Under the GATS, South Africa made commitments for hotels and restaurants;  travel agencies 
and tour operators services;  and tourist guides services. 
                                                           
333 South African Tourism (undated b). 
334 Department of Environmental Affairs and Tourism (2005a) and (2005b). 
335 The programme was launched in 2000 for four years.  It was funded by Business Trust and the 
DEAT.   
336 Department of Environmental Affairs and Tourism (2005a);  and Tourism Enterprise Partnership 
online information.  Viewed at:  http://w ww.tep.co.za/index.php [24 March 2009]. 
337 Department of Environmental Affairs and Tourism (2005a). 
338 The Presidency (2008). 
339 Department of Trade and Industry (2008c). 
340 RETOSA is the SADC body responsible for promoting and marketing tourism in southern Africa.   
341 IBSA online information, "Areas of cooperatio n".  Viewed at:  http://www.ibsa-trilateral.org/ 
index.php?option=com_content&task=section&id=2&Itemid=13 [24 March 2009]. 
342 Department of Environmental Affairs and Tourism (2005a). SACU-South Africa   WT/TPR/S/222/ZAF 
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Government Communication and Information System (2008), South Africa Yearbook 2007/08 , March, 
Pretoria. 
Government of South Africa (2008), Government Strategy Towards an Efficient National Technical 
Regulatory Framework (NTRF) for South Africa, Unpublished , March, Pretoria. 
ICASA (2007), Annual Report 2006/07 , Pretoria.   
IMF (2008), South Africa:  Financial System Stability Assessment , Washington D.C. 
Mission économique de l'Ambassade de  France en Afrique du Sud (2008a), L'électricité en Afrique du 
Sud, August, Pretoria.   
Mission économique de l'Ambassade de France en Afrique du Sud (2008b), Fiche de synthèse:  Les 
Télécommunications en Afrique du Sud , October, Pretoria. 
National Treasury (2003), Policy to Guide Uniformity in Pr ocurement Reform Processes in 
Government .  Viewed at:  http://www.treasury.gov.za/divisions/sf/sc/policy.pdf. 
OECD (2007), Communications Outlook 2007 , Paris. 
OECD (2008a), African Economic Outlook , Paris. 
OECD (2008b), Review of Agricultural Policies South Africa:  Highlights and Policy 
Recommendations , Paris 
OECD (2008c), Economic Assessment of South Africa , Paris. 
Sasol (undated), How fuel prices are calculated in South Africa .  Viewed at:  http://www.sasol.com/ 
sasol_internet/downloads/FuelPrice_ calculation_SA_07_11 70868230705.pdf. 
South African Diamond and Preci ous Metals Regulator (2008), Annual Report 08 , Johannesburg. 
South African National Road Agency (2008), Annual Report 2008 , Pretoria. 
South African Reserve Bank (2008a), Annual Report 2007/2008 , Pretoria. 
South African Reserve Bank (2008b), Monetary Policy Review , November. Viewed at: 
http://www.reservebank.co.za/internet/Pub lication.nsf/LADV/4D44067FFEB141D7422574FA0045B
7E7/$File/MPRNov08(rev).pdf. 
South African Reserve Bank (2009), Quarterly Bulletin , No. 251, March, Pretoria. 
South African Tourism (2008), 2007 Annual Tourism Report .  Viewed at:  http://www.southafrica.net/ 
research [13 March 2009]. 
South African Tourism (undated a), Business Tourism Growth Strategy 2008-2010 .  Viewed at: 
http://www.southafrica.net/research [20 March 2009]. 
South African Tourism (undated b), Gearing up to be Globally Competitive:  Tourism Growth 
Strategy 2008-2010 , Third Edition.  Viewed at:  http://www.southafrica.net/research 
[20 March 2009].  WT/TPR/S/222/ZAF Trade Policy Review 
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 State Tender Board (2000), State Tender Board General Conditions and Procedures , September.  
Viewed at:  http://www.deat.gov.za/Services/ documents/General/ST36%20Preferential% 
20Procurement%20Regulati ons.pdf [10 March 2009]. 
Statistics South Africa (2007), General Household Survey 2007/2008 , Pretoria. 
The Presidency (2008), ASGISA Annual Report 2007 , Pretoria. 
The Presidency (undated), Accelerated and Shared Growth Initiati ve for South Africa (AsgiSA):  A 
summary .  Viewed at:  http://www.thepresidency.g ov.za/main.asp?include=docs/reports/asgisa/ 
index.htm [10 March 2009]. 
Transnet (2008), Annual Report 2008 , Johannesburg. 
U.S. Department of State (2002), 2001 South Africa Report on Econom ic Policy and Trade Practices , 
February, Washington D.C. 
U.S. Energy Information Administration (2008), Country Analysis Brief:  South Africa , October, 
Washington D.C. 
UNESCO World Water Asse ssment Programme (2007), Water:  A Shared Responsibility, Section 5:  
Sharing Responsibilities:  South Africa .  Viewed at:  http://www.unesco.org/water/wwap/wwdr/ 
wwdr2/ [14 May 2009]. 
UNWTO (2008), Tourism Highlights , Madrid.  
USAASA (2008), Annual Report 2007/2008 , Pretoria.   
World Travel and Tourism Council (2002), South Africa:  The Impact of Travel and Tourism on Jobs 
and the Economy .  Viewed at:  http://www.wttc.org/bin/ pdf/original_pdf_file/southafrica2002.pdf 
[18 March 2009]. 
World Travel and Tourism Council (2009), Travel and Tourism Economic Impact 2009:  
South Africa , March.  Viewed at:  http://www.wttc.org/bin/pdf/original_pdf_file/southafrica.pdf.  
WTO (1998), Trade Policy Review:  SACU , Geneva.  
WTO (2003), Trade Policy Review:  SACU , Geneva. 
 
 APPENDIX TABLES 
 SACU-South Africa WT/TPR/S/222/ZAF 
 Page 375 
 
 
Table AI.1 
Structure of exports, 2002-08  
(US$ million and per cent) 
  2002 2003 2004 2005 2006 2007 2008 
                
Total (US$ million) 23,064.4 31,635.8 40, 263.5 46,991.0 52,601. 8 64,026.6 73,965.5 
                
  (per cent) 
                
Total primary products 38.2 42.2 42.7 43.8 47.4 48.6 48.2 
   Agriculture 14.5 13.4 11.6 11.2 9.4 8.7 9.5 
      Food 10.7 9.9 8.7 8.5 7.1 6.6 7.3 
         1121  Wine of fresh grapes (including fortified wine) 1.2 1.3 1.3 1.3 1.0 1.0 1.0 
      Agricultural raw material 3.9 3.5 2.9 2.7 2.3 2.1 2.2 
   Mining 23.6 28.8 31.1 32.6 38.0 39.9 38.7 
      Ores and other minerals 6.5 5.0 4.8 6.4 7.9 9.0 12.0 
         2816  Iron ore agglomerates (sinters, pellets, 
 briquettes, etc.) 1.8 1.5 1.4 2.0 2.2 2.4 3.2 
         2877  Manganese ores and concentrates 0.5 0.4 0.5 0.5 0.5 0.7 2.6 
         2879  Other non-ferrous base metals ores and 
 concentrates 0.4 0.3 0.4 0.6 0.8 1.0 1.3 
         2878  Ore and concentrates of molybdenum, niobium, 
 etc. 1.5 1.3 0.8 0.7 1.2 0.9 0.9 
         2891  Ores and concentrates of precious metals 0.1 0.0 0.0 0.6 0.9 0.7 0.8 
      Non-ferrous metals 4.8 14.0 17.2 15.9 20.5 20.3 17.0 
         6812  Platinum unwrought, unworked or semi-
 manufactured 0.0 10.1 11.5 11.3 15.2 15.3 13.3 
         6841  Aluminium and aluminium alloys, unwrought 3.1 2.1 2.5 2.3 2.7 2.5 1.8 
         6842  Aluminium and aluminium alloys, worked 0.8 0.9 0.9 1.2 1.2 0.9 1.0 
      Fuels 12.4 9.8 9.1 10.4 9.5 10.6 9.6 
         3212  Other coal, whether or pulverized, not 
 agglomerated 7.8 5.6 6.0 6.9 5.9 5.2 6.3 
Manufactures 61.7 57.1 56.4 55.5 52.0 50.7 51.5 
   Iron and steel 10.5 12.3 14.0 12.5 10.7 11.7 12.0 
         6715  Other ferro-alloys (excl. radio-active 
 ferro-alloys) 3.4 4.2 5.1 4.4 3.6 4.7 6.1 
         6714  Ferro-manganese 1.1 0.9 1.4 1.4 0.8 1.0 1.6 
         6753  Flat-rolled products, stainless steel, hot-rolled 1.5 1.8 1.7 0.8 1.4 1.5 0.8 
   Chemicals 9.3 7.6 7.8 8.4 7.4 6.8 7.7 
         5223  Inorganic acid and oxides 0.4 0.3 0.4 0.5 0.4 0.4 1.1 
   Other semi-manufactures 12.8 10.9 10.0 10.1 8.9 8.3 7.0 
         6672  Diamonds (excl. industrial, sorted) not 
 mounted/set 6.7 5.5 5.0 5.4 4.6 3.9 3.1 
   Machinery and transport equipment 22.8 20.7 19.7 20.4 21.5 20.9 21.9 
      Power generating machines 0.3 0.2 0.3 0.3 0.4 0.4 0.3 
      Other non-electrical machinery 7.1 6.6 6.1 6.3 7.2 7.9 7.0 
         7436  Filtering and purifying machines for 
 liquids/gases 4.1 3.7 3.5 3.5 4.6 5.0 4.2 
         Agricultural machinery and tractors 0.1 0.1 0.1 0.1 0.1 0.2 0.1 
      Office machines and telecommunication equipment 1.7 1.5 1.5 1.3 1.4 1.4 1.2 
      Other electrical machines 1.3 1.1 1.0 0.9 1.0 1.1 1.1 
      Automotive products 10.4 9.8 9.2 9.3 9.3 8.4 10.5 
         7812  Motor vehicles for the transport of persons, 
 n.e.s. 7.0 6.6 6.1 6.1 5.2 4.1 6.1 
         7821  Goods vehicles 1.0 0.9 0.6 1.1 2.0 2.0 2.2 
         7843  Other motor vehicle parts and accessories of 
 722, 781 to 783 1.8 1.7 1.6 1.3 1.3 1.4 1.2 
      Other transport equipment 1.9 1.5 1.5 2.4 2.2 1.8 1.8 
   Textiles 1.1 0.9 0.7 0.7 0. 6 0.5 0.4 
   Clothing 1.1 1.0 0.6 0.4 0.3 0.2 0.2 
   Other consumer goods 4.0 3.7 3.4 3.0 2.6 2.4 2.2 
Other 0.2 0.7 0.9 0.7 0.6 0.7 0.3 
         9310  Special transactions and commodities not 
 classified by type 0.0 0.0 4.7 5.1 3.9 2.8 3.0 
   Gold 0.1 0.6 0.8 0.7 0.3 0.6 0.2 
Source:   WTO Secretariat calculations, based on UNS D, Comtrade database (SITC Rev.3 data). WT/TPR/S/222/ZAF Trade Policy Review 
Page 376 
 
 
 Table AI.2  
Structure of imports, 2002-08  
(US$ million and per cent)  
  2002 2003 2004 2005 2006 2007 2008 
                
Total (US$ million) 26,212.0 34,543.1 47, 603.3 55,032.6 68,469. 1 79,872.6 87,593.1 
                
 (per cent) 
                
Total primary products 21.5 21.0 23.4 22.4 26.8 28.0 31.8 
   Agriculture 6.5 6.4 6.2 5.5 5.3 6.1 6.1 
      Food 5.0 5.0 5.0 4.5 4.3 5.2 5.2 
         0423  Rice, milled, semi-milled 0.4 0.5 0.4 0.4 0.3 0.4 0.5 
         0412  Other wheat (including spelt) and meslin, 
 unmilled 0.3 0.3 0.4 0.3 0.2 0.3 0.5 
      Agricultural raw material 1.5 1.4 1.3 1.1 1.0 1.0 0.9 
   Mining 15.0 14.6 17.2 16.8 21.5 21.9 25.7 
      Ores and other minerals 1.7 1.7 1.8 1.7 1.9 2.1 2.4 
         2852  Alumina (aluminium oxide) 0.9 0.7 0.9 0.8 0.9 0.8 0.7 
         2741  Sulphur (excl. 
 sublimed/precipitated/colloidal) 0.1 0.1 0.1 0.1 0.1 0.1 0.5 
      Non-ferrous metals 0.8 1.0 1.0 0.9 1.3 1.2 1.0 
      Fuels 12.5 11.9 14.4 14.3 18.3 18.6 22.3 
         3330  Crude oils of petroleum and bituminous 
 minerals 10.7 10.4 12.4 11.8 13.9 13.7 17.1 
         3212  Other coal, whether or pulverized, not 
 agglomerated 0.3 0.3 0.2 0.3 0.4 0.2 0.5 
Manufactures 69.5 69.6 68.0 68.9 65.4 64.7 61.5 
   Iron and steel 1.3 1.3 1.4 1.5 1.7 2.0 1.8 
   Chemicals 12.1 11.0 10.0 10.0 8.9 9.0 9.8 
         5429  Medicaments, n.e.s. 1.5 1.6 1.5 1.5 1.4 1.3 1.3 
         5621  Mineral or chemical fertilizers, nitrogenous 0.3 0.2 0.3 0.2 0.2 0.3 0.5 
   Other semi-manufactures 8.0 7.9 7.0 7.4 6.8 7.2 6.4 
         6672  Diamonds (excl. industrial, sorted) not 
 mounted/set 1.8 1.8 1.4 1.6 1.3 1.3 1.0 
   Machinery and transport equipment 37.5 39.4 39.6 39.4 37.8 37.3 35.0 
      Power generating machines 1.4 1.5 1.4 1.1 2.1 1.4 2.2 
      Other non-electrical machinery 11.4 11.5 10.1 9.7 9.9 10.7 10.6 
         7232  Mechanical shovels, etc., self-propelled 0.6 0.8 0.7 0.7 0.7 1.1 0.9 
         7284  Machinery and appliances for particular 
 industries, n.e.s. 0.6 0.6 0.6 0.6 0.8 0.6 0.6 
         7239  Parts n.e.s., of  machinery of 723 and 744.3 0.4 0.4 0.3 0.3 0.3 0.4 0.6 
         Agricultural machinery and tractors 0.8 0.7 0.7 0.5 0.5 0.6 0.7 
      Office machines and telecommunication equipment 11.1 10.3 11.0 11.2 10.3 9.3 8.4 
         7643  Radio or television transmission apparatus 2.6 2.3 2.4 2.7 2.4 2.0 1.7 
         7522  Data processing machines, with at least 
 processing, imput and output units 0.5 0.6 0.6 0.6 0.6 0.6 0.6 
         7599  Parts and acce ssories of 751.1,  751.2, 751.9 
 and 752 1.2 1.5 1.8 1.6 1.3 0.8 0.6 
      Other electrical machines 3.4 3.5 3.1 3.2 3.2 3.3 3.4 
      Automotive products 6.5 7.2 8.0 10.0 9.5 9.6 7.0 
         7812  Motor vehicles for the transport of persons, 
 n.e.s. 3.7 4.2 5.4 6.6 6.1 5.5 3.1 
         7843  Other motor vehicle parts and accessories of 
 722, 781 to 783 1.4 1.4 1.3 1.5 1.4 1.4 1.4 
         7821  Goods vehicles 0.6 0.7 0.7 1.0 1.2 1.7 1.3 
      Other transport equipment 3.8 5.3 6.0 4.2 2.8 3.0 3.3 
         7923  Aeroplanes, etc. (excl. helicopters), > 2 t and 
 ≤ 15 t unladen 1.1 0.9 0.4 0.4 0.3 0.3 1.0 
   Textiles 2.0 1.9 1.7 1.6 1. 4 1.3 1.2 
   Clothing 0.8 1.0 1.3 1.5 1.6 1.2 1.1 
   Other consumer goods 7.7 7.2 7.0 7.5 7.3 6.8 6.3 
Other 9.0 9.4 8.6 8.7 7.7 7.3 6.7 
         9310  Special transactions and commodities not 
 classified by type 9.0 9.4 8.6 8.7 7.7 7.3 6.7 
Source:   WTO Secretariat calculations, based on UNS D, Comtrade database (SITC Rev.3 data). SACU-South Africa WT/TPR/S/222/ZAF 
 Page 377 
 
 
Table AI.3  
Origin of imports, 2002-08  
(US$ million and per cent)  
  2002 2003 2004 2005 2006 2007 2008 
                
Total (US$ million) 26, 212.0 34,543.1 47,603. 3 55,032.6 68,469.1 79,872.6 87,593.1 
                
  (per cent) 
                
  America 15.9 14.2 13.1 12.6 12.7 13.3 13.4 
    United States 11.8 9.9 8.6 7.9 7.6 7.7 8.0 
    Other America 4.1 4.3 4.5 4.7 5.0 5.5 5.4 
      Brazil 1.8 2.1 2.1 2.4 2.0 2.1 1.9 
                
  Europe 44.6 45.3 42.3 40.2 36.5 35.7 33.1 
    EC(25) 42.4 43.4 40.7 38.1 34.7 33.7 31.1 
      Germany 15.6 14.8 14.2 14.0 12.5 11.7 11.3 
      United Kingdom 9.0 8.7 6.8 5.5 5.0 4.8 4.1 
      France 4.1 6.0 6.1 4.4 3.6 3.4 2.9 
      Italy 3.6 3.3 3.0 3.0 3.0 2.8 2.4 
      Sweden 1.2 1.3 1.3 1.4 1.3 1.4 1.8 
      Netherlands 1.8 1.7 1.5 1.5 1.6 1.6 1.4 
      Belgium 1.4 1.5 1.3 1.4 1.2 1.2 1.3 
      Spain 1.3 1.5 1.4 1.6 1.5 1.4 1.2 
    EFTA 1.9 1.5 1.1 1.4 1.0 1.1 1.1 
    Other Europe 0.4 0.4 0.5 0.6 0.8 1.0 1.0 
                
  Commonwealth of Independent States  (CIS) 0.5 0.2 0.2 0.3 0.5 0.7 0.4 
                
  Africa 3.4 3.3 4.2 4.6 6.9 7.2 8.6 
      Angola 0.0 0.0 0.6 0.5 0.5 2.1 3.1 
      Nigeria 1.3 1.2 1.7 1.2 2.0 2.2 2.2 
                
  Middle East 10.0 10.5 11.9 11.7 11.5 10.8 13.9 
      Saudi Arabia 5.0 5.7 5.6 5.5 5.3 4.5 6.3 
      Iran Islamic Rep. 3.5 3.6 5.0 4.1 3.9 3.7 3.8 
      Yemen 0.2 0.1 0.2 0.1 0.1 0.2 1.5 
                
  Asia 25.1 26.0 27.8 29.9 31.7 31.3 30.4 
    China 5.2 6.4 7.5 9.0 10.0 10.7 11.3 
    Japan 6.9 7.0 6.8 6.8 6.5 6.6 5.6 
    Six East Asian traders 7.6 7.5 8.1 8.6 9.3 8.2 7.5 
      Thailand 1.1 1.2 1.4 1.6 1.7 1.8 2.0 
      Korea, Rep. of 1.6 1.6 2.1 2.6 2.6 2.2 1.6 
      Malaysia 1.3 1.2 1.2 1.2 1.2 1.3 1.2 
      Chinese Taipei 2.0 1.8 1.7 1.6 1.7 1.4 1.2 
    Other Asia 5.3 5.0 5.3 5.6 5.9 5.8 6.0 
      India 1.1 1.2 1.5 2.0 2.4 2.2 2.6 
      Australia 2.8 2.3 2.4 2.1 2.1 1.8 1.9 
                
  Other 0.5 0.5 0.4 0.8 0.2 1.0 0.2 
Source:  WTO Secretariat calculations, based on UNSD,  Comtrade database (SITC Rev.3 data). WT/TPR/S/222/ZAF Trade Policy Review 
Page 378 
 
 
 Table AI.4  
Destination of exports, 2002-08  
(US$ million and per cent)  
  2002 2003 2004 2005 2006 2007 2008 
                
Total (US$ million) 23, 064.4 31,635.8 40,263. 5 46,991.0 52,601.8 64,026.6 73,965.5 
                
  (per cent) 
                
  America 13.4 14.3 14.1 12.8 14.2 15.2 13.4 
    United States 10.6 12.2 11.6 10.4 11.5 11.8 10.8 
    Other America 2.8 2.1 2.5 2.4 2.7 3.5 2.6 
                
  Europe 41.2 39.1 39.7 39.3 39.5 36.1 35.0 
    EC(25) 39.3 35.9 36.2 36.0 35.3 32.8 31.7 
      Germany 8.2 7.7 8.0 7.1 7.5 8.0 7.8 
      United Kingdom 10.9 10.1 10.5 10.6 8.8 7.7 6.6 
      Netherlands 5.2 4.8 4.6 5.0 5.2 4.5 4.7 
      Belgium 3.8 3.1 2.8 3.0 2.8 2.7 2.8 
      Spain 2.8 2.6 2.8 3.0 2.8 2.7 2.5 
      Italy 3.2 2.9 3.0 2.5 2.6 2.2 2.2 
      France 2.9 2.3 2.2 2.3 2.4 2.2 2.0 
    EFTA 1.2 2.6 2.9 2.8 3.4 2.5 2.4 
      Switzerland 1.0 2.4 2.8 2.7 3.2 2.1 2.1 
    Other Europe 0.7 0.6 0.5 0.6 0.8 0.7 0.9 
                
  Commonwealth of Independent States  (CIS) 0.2 0.3 0.3 0.3 0.3 0.3 0.5 
                
  Africa 18.0 16.0 14.7 15.3 14.6 14.8 17.0 
      Zambia 2.3 1.7 1.8 1.8 2.2 2.2 2.7 
      Zimbabwe 3.0 2.7 2.3 2.5 2.0 1.9 2.3 
      Mozambique 2.6 2.4 2.0 2.1 1.7 2.0 2.2 
      D.R. Congo 0.7 0.5 0.5 0.6 0.7 1.0 1.5 
      Nigeria 1.1 1.1 1.1 1.1 1.1 1.1 1.3 
      Angola 1.4 1.4 1.2 1.2 1.3 1.2 1.2 
                
  Middle East 3.9 3.5 3.5 3.8 3.7 3.6 3.3 
      Israel 2.3 1.6 1.6 1.6 1.3 1.2 1.1 
      United Arab Emirates 0.7 0.9 0.9 0.9 1.1 1.1 1.0 
                
  Asia 21.3 25.3 26.9 27.6 26.8 29.1 29.9 
    China 2.0 2.8 2.6 2.9 4.0 6.5 5.8 
    Japan 6.5 9.9 10.2 11.0 11.8 11.0 11.0 
    Six East Asian traders 7.8 7.4 8.8 6.7 5.9 6.1 6.6 
      Korea, Rep. of 2.1 1.8 1.7 1.8 1.9 1.8 2.0 
      Chinese Taipei 2.1 2.1 3.4 1.7 1.1 1.4 1.5 
    Other Asia 5.0 5.2 5.3 7.1 5.1 5.5 6.5 
      India 1.5 1.2 1.4 2.5 1.5 2.1 3.1 
      Australia 2.1 2.4 2.6 3.0 2.3 2.0 2.0 
                
  Other 2.1 1.4 0.7 0.9 0.8 0.8 0.9 
Source:   WTO Secretariat calculations, based on UNS D, Comtrade database (SITC Rev.3 data). 
 SACU-South Africa WT/TPR/S/222/ZAF 
 Page 379 
 
 
Table AII.1 
Trade-related legislation, 2009 
Area Legislation Entry into 
force 
Import and export Board on Tariffs and Trade Act (Act No. 107) 1986 
 Customs and Excise Act (Act No. 912) 1964 
 Diamond Export Levy (Administration) Act (Act No. 14) 2007 
 Diamond Export Levy Act (Act No. 15) 2007 
 Diamonds Act (Act No. 56) 1986 
 Diamonds Second Amendment Act (Act No. 30) 2005 
 International Trade Administration Act (Act No. 71) 2003 
 Value-added Tax Act (Act No. 89) 1991 
Government procurement Preferential Procurement Policy Framework Act (Act No. 5) 2000 
 Public Finance Management Act (Act No. 1) 1999 
 State Tender Act (Act No. 86) 1968 
Standards and technical requirements Abattoir Hygiene Act (Act No. 121) 1992 
 Accreditation for Conformity Assessment, Calibration, and Good Laboratory Practice 
Act (Act No. 19) 2006 
 Agricultural Pests Act (Act No. 36) 1983 
 Agricultural Pests Amendment Act (Act No. 9) 1992 
 Agricultural Product Standards Amendment Act (No. 63) 1998  
 Agricultural Products Standards Act (Act No. 119) 1990 
 Animal Disease Act (Act No. 35) 1984 
 Animal Health Act (Act No. 7) 2002 
 Animal Improvement Act (Act No. 62) 1998 
 Fertilizers, Farm Feeds, Agricultural Remedies, and Stock Remedies Act (Act No. 36) 1947 
 Foodstuffs, Cosmetics, and Disinfectants Act (Act No. 54) 1972 
 Genetically Modified Organism Act (Act No. 15) 1997 
 Hazardous Substances Act (Act No. 15) 1973 
 Health Act (Act No. 63 1977 
 International Health Regulations Act (Act No. 28)  1974 
 Liquor Act (Act No. 59) 2003 
 Liquor Products Amendment Act (Act No. 11) 1993 
 Measurement Units and Measurement Standards Act (Act No. 18) 2006 
 Meat Safety Act (Act No. 40) 2000 
 Medicines and Related Substances Control Act (Act No. 101) 1965 
 Merchant Shipping Act (Act No. 57 ) 1951 
 National Building Regulations and Building Standards Act (Act No. 103) 1977 
 National Environment Management Biodiversity Act (Act No. 10) 2004 
 National Environmental Management Act (Act No. 107) 1998 
 National Environmental Management Air Quality Act (Act No. 39) 2004 
 National Railway Safety Regulator (Act No. 16) 2002 
 National Regulator for Compulsory Specifications Act (Act No. 5) 2008 
 National Water Act (Act No. 36) 1998 
 Occupational Health and Safety Act (Act No. 85) 1993 
 Plant Breeders' Right Act (Act No. 15) 1975 
 Plant Improvement Act (Act No. 53) 1976 
 South African Maritime Safety Authority Act (Act No. 5) 1998 
 Standards Act (Act No.8) 2008 
 Trade Metrology Act (Act No. 77) 1973 
 Water Services Act (Act No. 108) 1997 
Competition Competition Act (Act No. 89) 1998 
 Price Control Act (Act No. 25) 1964 
Intellectual property rights Copyright Act (Act No. 98) 1978 
 Copyright Amendment Act (Act No. 9) 2002 
Table AII.1 (cont'd) WT/TPR/S/222/ZAF Trade Policy Review 
Page 380 
 
 
 Area Legislation Entry into 
force 
 Counterfeit Goods Act (Act No. 37) 1997 
 Designs Act (Act No. 195) 1993 
 Intellectual Property Laws Amendment Act (Act No. 38) 1997 
 Liquor Products Act (Act No. 60) 1989 
 Merchandise Marks Act (Act No. 17) 1941 
 Patents Act (Act No. 57) 1978 
 Performers' Protection Act (Act No. 11) 1967 
 Plant Breeders' Amendment Act (Act No. 15) 1996 
 Plant Breeders' Rights Act (Act No. 15) 1976 
 Registration of Copyright in Cinematographic Films Act (Act No. 62) 1977 
 Trade Marks Act (Act No. 194) 1993 
 Trade Marks Regulation (Government Notice R578) 1993 
Agriculture Agricultural Pests Act (Act No. 36) 1983 
 Agricultural Product Standards Act (Act No. 119) 1990 
 Animal Improvement Act (Act No. 62) 1998 
 Fertilizers, Farm Feeds, Agricultural Remedies, and Stock Remedies Act (Act No. 36) 1947 
 Genetically Modified Organisms Act (Act No. 15) 1997 
 Liquor Products Act (Act No. 60) 1989 
 Livestock Improvement Act (Act No. 60) 1997 
 Meat Safety Act (Act No. 40) 2000 
 Plant Breeders' Right Act (Act No. 15) 1975 
 Plant Improvement Act (Act No. 53 ) 1976 
Manufacturing Manufacturing Development Act (Act No. 187)  1993 
Mining Mineral and Petroleum Resources Development Act (Act No. 28) 2002 
 Minerals and Energy Laws Rationalization Act (Act No. 47) 1994 
Telecommunications Telecommunications Act (Act No. 103) 1996 
Financial services Anti-Money Laundering Act  2001 
 Financial Intelligence Centre Act (Act No. 38) (anti-money laundering) 2001 
 Banks Act (Act No. 94) 1990 
 Financial Institutions (Protection of Funds) Act (Act No. 28) 2001 
 Financial Markets Control Act (Act No. 55) 1989 
 Financial Services Board Act (Act No. 97) 1990 
 Mutual Banks Act (Act No. 124) 1993 
 South African Reserve Bank Act (Act No. 90) 1989 
 Stock Exchange Control Act (Act No. 1) 1985 
 Unit Trusts Control Act (Act No. 54) 1981 
Transport Merchant Shipping Act (Act No. 57) 1951 
 South African Maritime Safety Authority Act (Act No. 5) 1998 
 Aviation Act (Act No. 74) 1962 
 National Road Traffic Act (Act No. 93) 1996 
 National Railway Safety Regulator (Act No. 16) 2002 
 Aviation Act (Act No. 74 of 1962) 1998 
 National Land Transport Transition Act (Act No. 22) 2000 
Tourism Tourism Act (Act No. 72) 1993 
Source:  WTO Secretariat;  and information provi ded by the South African authorities.  SACU-South Africa WT/TPR/S/222/ZAF 
 Page 381 
 
 
Table AIII.1 
Import permits, 2009 
Tariff heading Description  Purpose of control 
 Schedule 1  
03.02 Fish, fresh or chilled Health and environment 
03.03 Fish, frozen Health and environment 
03.04 Fish, fillets, and other fish meat (whether or not mi nced), fresh, chilled or fro zen Health and environment 
03.05 Fish, dried, salted or in brine;  smoked fish, whether or not cooked before or during 
the smoking process;  fish meal fit fo r human consumption but excluding smoked 
salmon of subheading No. 0305.41  Health and environment 
03.06 Crustaceans, whether in shell or not, live, fresh, chilled, frozen, dried, salted or in 
brine;  crustaceans, in shell, cooked by steaming or by boiling in water, whether or 
not chilled, frozen, dried,  salted or in brine  Health and environment 
03.07 Molluscs, whether in shell or not, live, fr esh, chilled, frozen, dried, salted or in 
brine;  aquatic invertebrates other than cr ustaceans and molluscs;  live, fresh, chilled, 
frozen, dried, salted or in brine excluding oyster spat of subheading 0307.10.10  Health and environment 
27.07 Oils and other products of the distillation of high temperature coal tar;  similar 
products in which the mass of the aroma tic constituents exceeds that of the non-
aromatic constituents Strategic reasons 
27.08 Pitch and pitch coke, obtained from coal tar or from ot her mineral tars Strategic reasons 
27.09 Petroleum oils and oils obtained from bituminous minerals, crude Strategic reasons 
27.10 Petroleum oils and oils obtained from  bituminous minerals (excluding crude);  
preparations not elsewhere specified or included, containing by mass 70% or more 
of petroleum oils or of oils obtained from bituminous minerals, these oils being the 
basic constituents of the pr eparations;  waste oils Strategic reasons 
27.11 Petroleum gases and other gaseous  hydrocarbons but excluding butanes of 
subheadings Nos. 2711.13.10 and 2711.29.10 Strategic reasons 
27.12 Petroleum jelly;  paraffin wax;  micr ocrystalline petroleum wax, slack wax, 
ozokerite, lignite wax, peat wax, other mi neral waxes, and similar products obtained 
by synthesis or by other processes, whet her or not coloured but excluding petroleum 
jelly of subheading No. 2712.10 Strategic reasons 
27.13 Petroleum coke, petroleum bitumen and othe r residues of petroleum oils or of oils 
obtained from bituminous minerals, but ex cluding petroleum coke of subheadings 
Nos. 2713.11 and 2713.12 Strategic reasons 
27.14 Bitumen and asphalt, natural;  bituminous or oil shale and tar sands;  asphaltites and 
asphaltic rocks Strategic reasons 
27.15 Bituminous mixtures baud on natural asphalt, on natural bitumen, on petroleum 
bitumen, on mineral tar or on mineral tar pitch (e.g. bituminous mastics and cut-backs) Strategic reasons 
28.44 Radioactive chemical elements and radi oactive isotopes (including the fissile or 
fertile chemical elements and isotopes), and their compounds;  mixtures and residues 
containing these products Health and environment  
28.45 Isotopes, compounds, inorganic or organi c, of such isotopes, whether or not 
chemically defined  Health and environment 
40.03 Reclaimed rubber in primary forms or in plates, sheets or strip Environment 
40.04 Waste, patinas, and scrap of rubber (e xcluding hard rubbe r), and powders and 
granules obtained therefrom Environment 
40.11  New pneumatic tyres, of rubber (e xcluding heading Nos. 4011.90, 4011.40, and 
4011.50) Technical specification 
40.12 Retreated or used pneumatic tyres of rubbe r, solid or cushion tyres, tyre treads and 
tyre flaps, of rubber Health and environment  
63.09 Worn clothing and other worn articles Health and environment 
63.10 Used or new tags, scrap twine, cordage, rope and cables, and worn out articles of 
twine, cordage, rope or cab les, of textile materials Health and environment 
71.08 Gold (including gold plated with pl atinum) unwrought or in semi-manufactured 
forms, or in powder form Environment (Basel 
Convention) 
81.05 Cobalt mattes and other intermediate products of cobalt metallurgy, cobalt and 
articles thereof including waste and scrap Environment (Basel 
Convention) 
Table AIII.1 (cont'd) WT/TPR/S/222/ZAF Trade Policy Review 
Page 382 
 
 
 Tariff heading Description  Purpose of control 
81.07 Cadmium and articles thereof, includi ng waste and scrap Environment (Basel 
Convention) 
81.10 Antimony and articles thereof, incl uding waste and scrap Environment (Basel 
Convention) 
81.11 Manganese and articles thereof, incl uding waste and scrap Environment (Basel 
Convention) 
81.12 Beryllium chromium, germanium, vanadi um, gallium, hafnium, indium, niobium 
(columbium), rhenium and thallium, and articles of these metals, including waste 
and scrap  Environment (Basel 
Convention) 
93.02 Revolvers and pistols  Safety and security 
93.03 Other firearms and similar devices whic h operate by the firing of an explosive 
charge (for example, sporting shotguns and rifles, muzzle-loading firearms; very 
pistols and other devices designed to project  only signal flares, pistols and revolvers 
for firing blank ammunition, captive-bolt humane killers, and line-throwing guns)  Safety and security 
93.04 Other arms (for example, spring, air or gas guns  and pistols, and truncheon s) Safety and security 
93.05 Parts and accessories of articles of head ings Nos. 93.01 to 93.04 Safety and security 
93.06 Bombs, grenades, torpedoes mines, miss iles and similar munitions of war and parts 
thereof, cartridges and other ammunition and parts thereof, including shot and 
cartridge wads projectiles Safety and security 
9504.30 Other machines of games of skill or chance Technical 
specification/social reasons 
 Schedule 2   
Ex. 2903.19.10 1,1,1-Trichloroethane  (met hyl chloroform)  Montreal Protocol 
2903.30.10 Bromomethane (methyl bromide) Montreal Protocol 
2903.41 Trichlorofluoromethane (CFC 11) Montreal Protocol 
2903.42 Dichlorodifluoromethane (CFC12) Montreal Protocol 
2903.43 Trichlorotrifluoroethanes (CFC 113) Montreal Protocol 
2903.44 Dichlorotetrafluoroethanes (CFC 114) Montreal Protocol 
2903.45.10 Pentachlorofluoroethane Montreal Protocol 
2903.45.15 Tetrachlorodifluoraet hanes Montreal Protocol 
2903.45.20 Heptachlorofluoropropa nes  Montreal Protocol 
2903.45.25 Hexachlorodifluoropr opanes Montreal Protocol 
2903.45.30 Pentachlorotrifluoropr opanes Montreal Protocol 
2903.45.35 Tetrachlorotetrafluor opropanes Montreal Protocol 
2903.45.40 Trichloropentafluoropr opanes Montreal Protocol 
2903.45.45 Dichlorohexafluoropr opanes Montreal Protocol 
2903.45.50 Chloroheptafluoropr opanes Montreal Protocol 
2903.45.90 Other derivatives perhaloge nated only with fluorine and chlori ne;  other Montreal Protocol 
2903.49.01 Chlorodifluoromethane (CFC 22) Montreal Protocol 
2903.49.03 Dichlorotrifluoroethanes Montreal Protocol 
2903.49.05 Chlorotetrafluoroethanes Montreal Protocol 
2903.49.07 Dichlorofluoroethanes Montreal Protocol 
2903.49.09 Dichlorodifluoroet hanes Montreal Protocol 
2903.49.11 Dichloropentafluoropr opanes Montreal Protocol 
2903.49.19 Other derivatives of methane, ethane or propane, halogenated only with fluorine and 
chlorine Montreal Protocol 
2903.49.20 Derivatives of methane, ethane or propane, halogenated only with fluorine and 
bromine Montreal Protocol 
2903.49.90 Other Montreal Protocol 
2903.46 Bromochlorodifluoromethane (Halon 1211), bromotrifluoromethane (Halon 1301), 
and dibromotetrafluoroethanes (Halon 2402) Montreal Protocol 
3824.71 Mixtures containing acyclic hydro-car bons perhalogenated only with fluorine and 
chlorine Montreal Protocol 
3824.79 Other Montreal Protocol 
Table AIII.1 (cont'd) SACU-South Africa WT/TPR/S/222/ZAF 
 Page 383 
 
 
Tariff heading Description  Purpose of control 
 Schedule 3   
2806.10 Hydrochloric acid 1988 UN Convention 
2807.00 Sulphuric acid 1988 UN Convention 
2903.41 Potassium perma nganate 1988 UN Convention 
2903.42 Toluene 1988 UN Convention 
2903.43 Diethyl ether 1988 UN Convention 
2903.44 Acetone 1988 UN Convention 
2914.12 Methyl ethyl ketone 1988 UN Convention 
2914.31 1-Phenyl-2-propanone 1988 UN Convention 
2915.24 Acetic anhydride 1988 UN Convention 
2916.34 Phenylacetic acid 1988 UN Convention 
2922.43 Antralinic acid 1988 UN Convention 
2924.22 N-acetylanthranillic acid 1988 UN Convention 
2932.91 Isosafrole 1988 UN Convention 
2932.92 3,4 Methylenedioxyphenyl-2-propanone 1988 UN Convention 
2932.93 Piperonal 1988 UN Convention 
2932.94 Safrole 1988 UN Convention 
2933.32 Piperidine 1988 UN Convention 
2939.41 Ephedrine 1988 UN Convention 
2939.42 Pseudoepherine 1988 UN Convention 
2939.49 Norephedrine 1988 UN Convention 
2939.61 Ergometrine 1988 UN Convention 
2939.62 Ergotamine 1988 UN Convention 
2939.63 Lysergic acid 1988 UN Convention 
Note: 1988 UN Convention against Illicit Traffic in Na rcotic Drugs and Psychotropic Substances.   
Source: Government Gazette  No. 31926, 27 February 2009;  and information provided by the South African authorities.   
 
 WT/TPR/S/222/ZAF Trade Policy Review 
Page 384 
 
 
 Table AIII.2  
Technical regulations on foodstuffs, 2009 
Regulation (Government Notice No.) Product or activity  
Regulations related to powers and duties of inspector s/analysts:  final (R.328/2007) Inspectors duties  
Regulations relating to food-grade salt (R.184/2007) Salt 
Regulations relating to all bottled waters (R.718/2006) Bottled waters 
Regulations relating to objects intended for children in foodstuffs (R.28196/2005) Objects 
Regulations relating to marine biot oxins (R.491/2005) Marine toxins 
Regulations governing tolerance for fungus-produced  toxins in foodstuffs (R.1145/2004) Mycotoxins 
Regulation relating to maximum levels for metals in foodstuffs (R.500/2004) Metals 
Regulations governing the labelling of foodstuff s obtained through certain techniques of genetic 
modification (R.25/2004) GMO labelling 
Regulations relating to the prohibition of the sale of  comfrey, foodstuffs containing comfrey, and jelly 
confectionery contai ning konjac (R.1408/2003) Comfrey food 
Regulations relating to the application of the Hazar d Analysis Critical Control Point (HACCP) system 
(R.908/2003) HACCP 
Regulations regarding processed food stuffs (R.723/2003) Processed foods 
Regulations relating to the fortification of certain foodstu ffs (fortification mix suppliers) (R.504/2003)  Fortification 
Regulations governing the tolerances for certain seeds in  certain agricultural products (R.1225/2002) Toxic seeds  
Regulations governing certain solvents in foodstuffs (R.911/2001) Solvents 
Regulation relating to perishable fo odstuffs:  definition and declaration of certain perishable foodstuffs 
(R.952/1999) Perishable foodstuffs 
General hygiene requirements for food premises and th e transport of food (R.918/1999), as corrected by 
R.723/2002 and amended by R.1125/2003 Hygiene/transport 
Regulations relating to milk and da iry products (R.1555/1997) Milk/dairy 
Regulation governing microbiologi cal standards for foodstuffs and related ma tters (R.692/1997) Micro-biological standard 
food 
Regulation relating to edible fats an d oils (R.1316/1996) Edible fats/oils 
Regulation relating to food colorants (R.1008/1996) Colorants 
Regulations governing the maximum limits for pes ticide residue that may be present in foodstuffs 
(R.246/1994), as amended by R.1047/2006 Maximum residue limits 
(MRLs) for pesticide   
Labelling and advertising of foodstuffs  (R.2034/1993) Labe lling/advertising 
Regulation governing the maximum limits  for veterinary medicine and st ock remedy residues that may be 
present in foodstuffs (R.1809/1992) MRLs for vet medicines 
Regulation relating to the use of sweeteners in foodstuffs (R.3128/1991) Sweeteners 
Regulations prohibiting guar gum as a foodstuff (R.2554/1991) Guar gum 
Regulations governing the compos ition and labelling of raw boerewors, raw species sausage, and raw 
mixed-species sausage (R.2718/1990) Meat 
Regulations relating to baking powder and chemical leavening substances (R.2486/1990) Leavening substances 
Regulation governing radio activity in fo odstuffs (R.1931/1990) Radio activity 
Regulation governing em ulsifiers, stabilisers and thickeners and the amounts thereof that foodstuffs may 
contain (R.2527/1987) Emulsifiers stabilisers 
Use of certain food additives in  certain foods when wheaten products (R.2417/1987) Additives 
Regulations:  jam, conserve, marmalad e, and jelly (R.2627/1986) Jams  
Regulations relating to milking sheds and the transport of milk (R.1256/1986) Milking sheds 
Acids, bases, and salts:  amounts thereof that  foodstuffs may contain (R.115/1986) Salts 
Regulations relating to mayonnaise and othe r salad dressings (R.92/1986) Mayonnaise 
Regulations:  soft drinks (R.1769/1985) Soft drinks 
Regulations relating foods for infants, young child ren, and children (R.1130/1984), as amended by 
R.734/2006 Children's food 
Regulations relating to irradiated foods tuffs (R.1600/1983) Irradiated foodstuffs  
Regulation relating to anti-caking agents:  amounts that may be used in foodstuffs (R.2507/1982) Anti-caking agents 
Regulations governing substances in wine, other fe rmented beverages, and spirits:  additives, amounts, 
and tolerances (R.2870/1981) Wine/spirits additives 
Regulations:  preservatives and antioxidant s (R.965/1977) Preservatives/antioxidants 
Table AIII.2 (cont'd) SACU-South Africa WT/TPR/S/222/ZAF 
 Page 385 
 
 
Regulation (Government Notice No.) Product or activity  
Regulation:  mineral hydrocarbons in foodstuffs (R.230/1977) Hydrocarbons 
Regulations:  restriction on the sale of food additives containing nitrite a nd/or nitrate and other substances 
(R.219/1975) Nitrite/nitrate additives  
Regulation:  marine food (R.2064/1973) Marine food 
Regulations relating to food and water vessels (Act  No. 36 of 1919) (R.1575/1971) Food/water vessels 
General regulations promulgated in terms of the Public Health Act, 1919 (Transportation of Meat) (180 of 
1967) Transport of meat 
Regulations (R.575/1930)  
Edible gelatine  Gelatine 
Unwholesome or poisonous substances in food  Packaging 
Ice-cream and ice-cream products  Ingredients 
Meat and fish, and their preparations:  ed ible fats and edible oils  Meat/fish 
Tea  Tea 
Coffee, coffee mixtures, and preparations of coffee  Coffee 
Chicory  Chicory 
Cocoa and chocolate  Cocoa and chocolate 
Sugar, confectionary, dextro se, and icing sugar Sugar 
Note: Enforcing bodies are provinces for im ports and municipalities for local production.  
Source: Department of Health online informa tion, "Food legislation".  Viewed at:  http://www.doh.go v.za/department/ 
foodcontrol/legis.html [9 March 2009];  and informa tion provided by the South African authorities. WT/TPR/S/222/ZAF Trade Policy Review 
Page 386 
 
 
 Table AIII.3 
Export permits, 2009 
Tariff heading  Description  Controlling 
authorities 
 Schedule 1   
1209.99.10 Wattle seeda W 
2530.90 Lithium ore;  sugulite (also known as lavulite or lazulite), unworked or simply  sawn or roughly shaped M 
2607.00 Lead ores and concentrates I 
2611.00 Tungsten ores and concentrates I 
26.13 Molybdenum ores and concentrates I 
2615.90 Tantalum ores and concentrates I 
2710.11.02 Petrol M 
2710.11.01 Aviation spirit M 
2710.11.09 Power kerosene M 
2710.11.15 
2710.11.26 Illuminating kerosene M 
2710.11.30 Distillate fuel for use in compression ignition inte rnal combustion piston engines (diesel or semi-diesel); 
and residual fuel oils  M 
2711.13 Butanes M 
3002.90.90 Human blood and preparations thereof H 
4403.99 Sawn logs of yellowwood (Podocarpus Falcat us, Podocarpus Henkelii, Podocarpus Latifolius), 
stinkwood (Ocotea Bullata), a nd blackwood (Acacia Melanoxylon) W 
4407.99 Sawn yellowwood (Podocarpus Falcatus, Podo carpus Henkelii, Podocarpus  Latifolius), stinkwood 
(Ocotea Bullata), and blackwood (Acacia Melanoxylon) W 
47.07 Recovered (waste and scrap)  of paper or paperboard I 
7103.10 "Tigers' eye", including its relate d varieties and any articles consisting wholly or partly of tiger's eye or 
its related varieties, but excluding properly fini shed, and finally and completely polished cabochons, 
beads, eggs, spheres, tumbled stones, and carvings cut therefrom or otherwise processed or tumbledb M 
7103.10 Sugulite (also known as lavulite or lazulite),  unworked or simply sa wn or roughly shaped M 
72.04 Ferrous waste and scrap;  reme lting scrap ingots of iron or steel I 
7403.12 
7403.13 
7403.19 Refined copper:  wire bars;  billets;  and other than cathodes and sections of cathodes I 
7403.21 Copper-zinc base alloys (brass) I 
7403.22 Copper-tin base alloys (bronze) I 
7403.23 Copper-nickel base alloys (c upro-nickel) or copper-nickel-zinc base alloys (nickel silver) I 
7404.00 Copper waste and scrap I 
7503.00 Nickel waste and scrap I 
7602.00 Aluminum waste and scrap I 
7801.10 Lead ingots I 
7802.00 Lead waste and scrap E 
78.04 Lead plates, sheets, strip, and fo il;  and lead powders and flakes  I 
7805.00 Lead tubes, pipes, and t ube or pipe fittings (e.g. c ouplings, elbows, and sleeves) I 
7806.00 Other articles of lead I 
7902.00 Zinc waste and scrap I 
8002.00 Tin waste and scrap I 
81.01 Tungsten (Wolfram) and articles th ereof, including waste and scrap I 
81.02 Molybdenum and articles thereo f, including waste and scrap I 
81.03 Tantalum and articles thereo f, including waste and scrap I 
8104.20 Magnesium waste and scrap I 
81.07 Cadmium and articles thereof, including waste and scrap E 
8110.00 Antimony and articles ther eof, including waste and scrap E 
8111.00 Manganese and articles ther eof, including waste and scrap E 
81.12 Beryllium, chromium, germanium, vanadium, galliu m, hafnium, indium, niobium (columbium), and 
articles of these metals, including waste and scrap (but excluding Rhenium and Thallium) E 
Table AIII.3 (cont'd) SACU-South Africa WT/TPR/S/222/ZAF 
 Page 387 
 
 
Tariff heading  Description  Controlling 
authorities 
87.02 
87.03 
87.04 Motor cars and other motor vehicles principally desi gned for the transport of persons and goods, but 
excluding vehicles exported by dipl omatic and foreign representatives  and new vehicles exported by 
local manufacturers or their appointed agents (e xcluding sub-headings No. 8702.10.10, 8703.10.10, 
8703.21.23, 8703.21.60, 8703.21.70, 8703.31.80, 8704.10, 8704.21.10, 8704.21.40, 8704.22.10, 
8704.22.20, 8704.23.10, 8704.23.20,. 8704.31.30, 8704.31.50, 8704.32.10, 8704.90.05, and 8704.90.30) I 
 Schedule 2   
2903.19.10 1,1,1-Trichloroethane (methyl chloroform) E 
2903.39 Bromomethane (methyl bromide) E 
2903.41 Trichlorofluoromethane (CFC 11) E 
2903.42 Dichlorodifluoromethane (CFC 12( E 
2903.43 Trichlorotrifluoroethanes (CFC 113) E 
2903.44 Dichlorotetrafluoroethanes (CFC 114) E 
2903.45.05 Chlorotrifluoromethane E 
2903.45.10 Pentachlorofluoroethane E 
2903.45.15 Terachlorodifluoroethane E 
2903.45.20 Heptachlorofluoropropane E 
2903.45.25 Hexachlorodifluoropropane E 
2903.45.30 Pentachlorotrifluoropropane E 
2903.45.35 Tetrachlorotrifluoropropane E 
2903.45.40 Trichloropentafluoropropane E 
2903.45.45 Dichlorohexafluoropropane E 
2903.45.50 Chloroheptafluoropropane E 
2903.45.90 Other derivatives perhalogenated only with fluorine and chlorine; other E 
2903.46 Bromochlorodifluoromethane (Halon 1211) , bromotrifluoromethane(Halon 1301) and 
dibromotetrafluoroethanes(Halon 2402) E 
2903.49.01 Chlorodifluoromethane E 
2903.49.03 Dichlorotrifluoethanes E 
2903.49.05 Chlorotetrafluoroethanes E 
2903.49.07 Dichlorofluoroethanes E 
2903.49.09 Dichlorodifluoroethanes E 
2903.49.11 Dichloropentafluoropropanes E 
2903.49.19 Other derivatives of methane, ethane or pr opane, halogenated only with  fluorine and chlorine E 
2903.49.20 Derivatives of methane, ethane or prop ane, halogenated only with fluorine and bromine E 
2903.49.90 Other E 
3808.91.10 Containing bromomethane (methy l bromite) or bromochloromethane E 
3808.92.30 
3808.93.81 
3808.94.85 
3808.99.10 Other, containing bromomethane (methy l bromite) or bromochlorometane E 
3813.00.17 Other, containing bromochlor odifluoromethane, bromotrichlorometh ane or dibromotetrafluoroethane E 
3813.00.19 Other, containing methane, ethane or propane hydrobromofluorocarbons (HBFCs) E 
3813.00.21 Other, containing methane, ethane or  propane hydrochlorofluorocarbons (HCFCs) E 
3813.00.23 Other, containi ng bromochloromethane E 
3814.00.10 Containing methane, ethane or propane chlorofl uorocarbons (CFCs), whether or not containing HCFCs E 
3814.00.20 Containing methane, ethane or pr opane HCFCs but not containing CFCs  E 
3814.00.30 Containing carbon tetrachloride, bromochlorometha ne or 1,1,1-trichloroethane (methyl chloroform) E 
3824.71 Containing CFCs, whether or not containing HCFCs, perfluorocarbons (PFCs) or hydrofluorocarbons 
(HFCs) E 
3824.72 Containing bromochlorodifluor omethane, bromotrifluoromethane or dibromotetrafluoroethane E 
3824.73 Containing HBFCs E 
3824.74 Containing HCFCs, whether or not contai ning PFCs or HFCs but not containing CFCs E 
3824.75 Containing carbon tetrachloride E 
3824.76 Containing 1,1,1-trichloroethane (methyl chloroform) E 
Table AIII.3 (cont'd) WT/TPR/S/222/ZAF Trade Policy Review 
Page 388 
 
 
 Tariff heading  Description  Controlling 
authorities 
3824.77 Containing bromomethane (methyl bromide) or bromochloromethane E 
3824.78 Containing PFCs or HFCs, but not containing CFCs or HCFCs E 
3824.79 Other E 
 Schedule 3c,d  
2806.10 Hydrochloric acid P 
2807.00 Sulphuric acid P 
2841.61 Potassium permanganate P 
2902.30 Toluene P 
2909.11 Diethyl ether P 
2914.11 Acetone P 
2914.12 Methyl ethyl ketone P 
2914.31 1-Phenyl-2-propanone P 
2915.24 Acetic anhydride P 
2916.34 Phenylacetic acid P 
2922.43 Anthranilic acid P 
2924.23 N-acetylanthranilic acid P 
2932.91 Isosafrole P 
2932.92 Methylenedioxyphenyl-2-propanone P 
2932.93 Piperonal P 
2932.94 Safrole P 
2933.32 Piperidine P 
2939.41 Ephedrine P 
2939.42 Pseudoephedrine P 
2939.49 Nerophedrene P 
2939.61 Ergometrine P 
2939.62 Ergotamine P 
2939.63 Lysergic acid  P 
a Acacia mearnsii De Willd, formerly known as Acacia mollissima  Wild (commonly known as Black Wattle);  acacia decurrens 
 (Wendl. Willd) (commonly know as Green Wattle);  acacia pycnantha Benth;  and acacia syanophylla Lindl. b Definitions:  (1) cabochon shall mean a stone of which the top forms:  (a) a symmetrically cu rved convex or concave surface;  or 
 (b) flat surface, provided the stone is eith er round or oval or crescent,  heart, cross or tear shap ed;  the base may be convex , 
 concave or flat;  (2) bead shall mean a stone of any shape of a mass not exceeding 50  gr which has been drilled in such a way that 
 it can be strung in a necklace;  (3) egg shall mean a symmetri cally egg-shaped stone;  (4) sphere shall mean a symmetrically 
 sphere-shaped stone;  (5) tumbled stone shall mean an uncut , unsawn stone of irregular shape of a mass not exceeding 50 gr 
 which has been properly tumbled to such an extent that it has a pebble-like appearance;  (6) carving shall mean a cabochon, be ad, 
 egg, sphere or tumbled stone as defined in these regulations which has been artistically carved or sculptured;  and (7) polish  shall 
 mean the process commonly accepted in the lapidary trade whereby fine abrasives a nd polishing powders are used to smooth a 
 stone to a perfect mirror-like appearance without applying any l acquer or varnish. 
c 1988 UN Convention against Illicit Traffic in Na rcotic Drugs and Psychotropic Substances. 
d The salt and optical isomers of all substances included in this table, where the existence of su ch salts is possible, with th e 
 exception of the salts of hydrochloric acid and sulphuric acid. 
Note:  I: International Trade Administration Commission. 
 M: Department of Minerals and Energy. 
 H: Department of Health. 
 E: Department of Environmental Affairs and Tourism.  W: Department of Water Affairs and Forestry. 
 P: South African Police Service.  
Source:  Government Gazette  No. 31145, 20 June 2008. SACU-South Africa WT/TPR/S/222/ZAF 
 Page 389 
 
 
Table AIII.4 
Incentive schemes, 2009 
Scheme:  objective Criteria  Type of incentive 
Investment support    
Black Business Supplier Development 
Programme (BBSDP):  provide majority 
black-owned enterpri ses with access to 
business development services  Majority black-owned (51% shareholding) 
enterprises;  a significant representation of 
black managers in the management team; maximum annual turnover:  R 12 million; 
minimum trading history of one year;  if 
the enterprise is regi stered for less than a 
year, but has been operating previously, 
registration with local municipality and 
VAT registration or invoices must be submitted to confir m trade activity; 
compliance with commercial regulatory 
requirements  Maximum grant of R 100,000; 
requested amount must not exceed 25% of 
the enterprise's previous year's turnover; enterprises select service providers from at 
least three competitive bids obtained in the 
selection process; enterprises do not have to select the lowest 
cost service provider.  If a higher quote is 
selected, a good motivation letter from the grant applicant has to be provided  
90:10 cost sharing grant;  the DTI 
contributes 90% and the enterprise contributes 10% 
Bridging Finance Scheme:  address the short-term financing needs of entrepreneurs that have secured firm contracts (except 
construction contracts) with the 
Government and/or the private sector Entrepreneurs awarded tenders by the 
Government;  with secured contracts to supply services/products to established big, 
blue-chip companies;  and with an annual 
turnover greater than R 1 million Minimum financing of R 500,000;  
short-term loans (maximum 18 months); interest rates are competitive, risk related, 
and based on the prime bank overdraft rate 
Business Process Outsourcing and 
Offshoring (BPO and O)a:  create 
employment opportunities Incentive is offered to local and foreign 
investors in projects aimed to serve 
offshore clients; the applicant:  must be a registered legal entity in South Africa;  must be a taxpayer 
in good standing and;  must have an 
accepted  investment project; the project:  can involve the start up or an 
expansion of an existing operation;  apply 
and be approved prior to the start of commercial operations;  and establish an 
operation that creates employment for at 
least 200 people by the end of its 2
nd year 
in operation Investment grant ranging between 
R 37,000 and R 60,000;  and a training  
grant to a maximum of R 12,000 per agent 
Cooperative Incentive Scheme (CIS):  help cooperative enterprises to acquire competitive business development services  Incorporation and registration in South 
Africa under the 1991 Co-operatives Act; operate (or to operate) in an emerging 
sector;  must be an emerging cooperative 
owned by historically disadvantaged persons (HDPs);  be established in rural or 
semi-urban areas;  employ women, youth, 
and people with disability Maximum grant of R 300,000;   
90:10 matching grant;  the DTI contributes 90% and the enterprise contributes 10%  
Critical Infrastructure Programme (CIP):  
support the construction of infrastructure to 
enable investment project or to expand existing  investment in infrastructure or for 
new investment Private sector and public sector enterprises 
Private/public partnership (PPP) Non-refundable cash grant;  cover between 
10% and 30% of the total development 
costs of the qualifying infrastructure 
Empowerment Finance:  assist emerging industrialists/entrepreneurs to acquire a stake in formal business Emerging industrialists interested in small- 
to medium-sized ventures:  the business must be profitable;  the entrepreneur should 
have a meaningful role in the management 
of the concern;  minimum deal size of R 5 million and maximum of 
R 100 million;  and a minimum cash 
contribution of 10% of the purchase price is required from the entrepreneur Medium-term finance (loans, equity, and 
quasi-equity) for management buy-ins, management or leverage buy-outs, and 
strategic equity partnerships 
Table AIII.4 (cont'd) WT/TPR/S/222/ZAF Trade Policy Review 
Page 390 
 
 
 Scheme:  objective Criteria  Type of incentive 
Enterprise Investment Scheme (EIP):  
stimulate growth and employment;  and 
broaden participation.  two 
sub-programmes:  (i) Manufacturing Investment Programme (MIP) to stimulate 
growth;  and (ii) Tourism Support 
Programme (TSP) to stimulate employment  and broaden participation Local and foreign-owned entities Invest ment grant of 15% to 30% towards 
qualifying investment in plant, machinery 
and equipment, and customized vehicles 
required for establishing or expanding production facilities or upgrading 
production capacity in clothing and textiles 
operation or to ensure that tourism projects create employment and promote tourism in 
new areas; 
investment of less than R 5million qualifies for a 30% grant;   investment of R 5 million-R 30 million for 30%-15%;  
and investment of 
R 30 million-R 20 million for 15% grant; maximum qualifying investment:  
R 200 million;  maximum qualifying grant:  
R 30 million  
Equity Fund:  fund joint ventures;  expand re-capitalization of company;  and buy out 
existing shareholders 
 SMMEs with a net asset value of not less 
than R 500,000 
Applicants must be able to demonstrate 
that they are viable in the medium to long-term, and that investors can anticipate an 
adequate rate of return Provide grants for SMMEs that need to 
expand their activities, enter into joint 
ventures, re-capitalise the company or buy 
out the existing shareholders 
Foreign Investment Grant:  assist foreign investors in investing in manufacturing  by compensating them for the cost of 
relocating new machinery and equipment 
to South Africa from abroad   Majority foreign-owned company investing 
in South Africa for the first time, provided it is a registered incorporated legal entity in 
South Africa Maximum grant of R 10 million;  grant 
cannot exceed the actual cost of relocation, or 15% of the value of the new machinery 
and equipment relocated from overseas  
Industrial Development Zones Programme:  promote the competitiveness of the 
manufacturing sector 
 All industries (zones to be designated first) 
Located next to an international port  A Customs controlled area to provide 
support for customs and VAT 
requirements; world-class industrial support 
infrastructure; 
international port of entry;  duty suspension on imports for production-
related raw materials (including machinery 
and assets used in production with the aim of exporting the finished products);  
VAT exemptions under specific conditions 
for supplies procured in South Africa 
Risk Capital Facility (RCF):  develop 
entrepreneurial skills, particularly in small 
and medium-sized businesses  Black Economic Empowerment 
(BEE)-owned businesses with minimum 
ownership of 25,1% by historically disadvantaged persons (HDPs) in the SME 
sector; 
investments with high developmental impact (e.g. job creation, regional reach, 
and rural development) Clients receive business support to solve 
short-term problems and are provided with 
long-term assistance; the Industrial Development Corporation 
pays part of the cost of business support 
and structures a loan facility for clients to pay the balance of the costs when they are 
in a financially sound position 
Sector Specific Assistance Scheme 
(SSAS):  develop an industry sector and new export markets;  broaden the export 
base;  and propose solutions to factors 
inhibiting export growth, stimulating the participation of SMEs, promote black 
economic empowerment and women 
empowerment in the export sector Non-profit business organizations in 
sectors and subsectors of prioritized industries;  eligible applicants are export 
councils, industry associations and joint 
action groups  Reimbursable cost-sharing grant scheme 
Spatial Development Initiatives:  provide 
high-level support in areas where 
socio-economic conditions require concentrated government assistance and 
where inherent economic potential exists .. .. 
Table AIII.4 (cont'd) SACU-South Africa WT/TPR/S/222/ZAF 
 Page 391 
 
 
Scheme:  objective Criteria  Type of incentive 
Strategic Investment Support for 
Programme (SIP):  support for strategic 
investments in manufacturing;  programme 
terminated on 31 July 2005 Minimum investment of R 50 million in 
manufacturing of food products (excl. 
tobacco and related products) and 
consultancy in computer hardware, software, and data based processing  Tax allowance of up to 100% (maximum of 
R 600 million per project) of the cost of 
buildings, plant, and machinery  
Small business development    
Emerging Entrepreneur Scheme  Conditions are mentorship  of the loan;  the 
scheme enables the entrepreneur to have 
access to funds to establish, expand or buy an existing business Provide up to R 120,000 with the fee 
payable at 4% p.a. in advance; 
duration:  24 months initially but can be extended for three periods of 12-months  
Empowerment Scheme:  promote emerging industrialists/entrepreneurs Businesses must have one of the following 
qualifying criteria in relation to the nature, purpose for the business or its effect on 
SMMEs:  substantial job creation in an area 
where there is very little economic activity;  labour-intensive projects;  an economic 
empowerment transaction that entitles the 
borrower to acquire a controlling interest in the SMME within two years from the date 
the facility is granted by the bank;  
management buy-out that entitles the borrower to acquire a controlling interest in 
the SMME within a period of two years 
from the date the facility is granted by the bank;  sub-contracting;  outsourcing transactions;  or any similar economic 
empowerment venture Medium-term finance (loans or equity) for 
buyouts or leveraged buy outs, and strategic 
equity partnerships; 
for ventures worth R 1-100 million; 
provide cover up to R 5 million of bank facility at 60%, with the fee payable at 
2.5% p.a. in advance; 
duration:  36 months initially but can be extended twice, for periods of 12 months  
Individual Guarantee:  enable an entrepreneur to access funding from a 
participating bank or  other financial 
institution 
 Individual entrepreneurs Fac ilities secured under the Khula 
guarantee scheme include term loans, bank 
overdraft, revolving credit, instalment sale, 
bank guarantees as well as construction performance guarantees; 
assessment of all applications is done by 
the bank;  upon conformity of the applications, the bank approaches Khula 
for a guarantee, if it needs cover beyond 
what the client can provide 
Institutional Guarantee:  cater for 
institutions that lend to the SMMEs and are 
able to source such capital from the commercial banks Retail financial institutions lending to 
SMMEs Business must be conducted within 
South Africa and benefit South African 
citizens; guarantees limited to 70% of the financing 
provided by the bank, not to exceed 10% of 
Khula capital 
Khula Equity Fund:  promote SMMEs with 
potential for growth;  and fund joint 
ventures and buyouts SMMEs with minimum value of 
R 500,000;  proof of viability required .. 
 
KwaZulu Rehabilitation Trust Fund:  cover 
lack of collateral for businesses wishing to 
reinstate their operations Entrepreneurs in KZN  whose businesses 
were adversely affected by the unrest up to 
1994;  other qualifying criteria as per the Individual Guarantee Scheme agreements held with the various banks Loans 
Land Reform Credit Facility:  stimulate 
and encourage private- sector participation 
and involvement in the land reform process .. .. 
Table AIII.4 (cont'd) WT/TPR/S/222/ZAF Trade Policy Review 
Page 392 
 
 
 Scheme:  objective Criteria  Type of incentive 
Micro-Credit Outlets (Khula Start):  
promote greater access to micro-credit in 
rural areas, in particular to assist women to 
start and expand their small businesses;  at least 70% of the loans should be given to 
women Loans given to groups not individuals;  
individuals create groups of 3-10 members, 
that need to meet the criteria established for 
group participation Loans disbursed on incremental basis from 
R 300 to R 3,500 per member within a 
group;  
based on the activity of the individual businesses, the group decides how much 
each member has to receive and will 
subsequently stand surety for the full amount owed by the group as a whole; 
initiated through existing NGOs or 
community based organizations (CBOs) 
Regional equity funds:  support SMEs  SMEs, in particular those sponsored by 
historically disadvantaged entrepreneurs Investment between R 250,000 and 
R 2.5 million in enterprises that have high potential growth and returns 
Retail Financial Intermediaries (RFIs):  lend to entrepreneurs for business purposes  Only companies that want to become RFI 
can apply to Khula Business and capitalization loans provided 
by Khula; entrepreneurs must approach RFIs directly 
and not Khula 
SEDA Technology Programme:  develop 
and support innovative technology-based 
platforms that result in the creation and 
development of sustainable, globally competititive SMMEs  Consortiums within a given sector  
including academia, private sector, 
provincial or local government, science 
councils, NGOs, financial institutions that establish and support SMMEs Cash grants to establish and support 
technology business centres over a period 
of three years 
Small and Medium Enterprises 
Development Programme (SMEDP):  create wealth;  generate employment;  develop entrepreneurship;  promote 
empowerment;  utilize local raw material;  
ensure sustainability of projects receiving incentives in the long run;  and reduce 
investment lost for small and medium 
investors 
 Local and foreign firms with maximum 
investment of R 100 million in land, buildings, plant, and equipment in new projects or expansion of existing projects; 
legal entities, and sole proprietors and 
partnerships (excl. trusts) engaged in qualifying manufacturing, high-value 
agricultural projects and agri-processing, 
aqua culture, bio-technology, tourism information, communication technology 
investments, recycling, culture industry, 
and business service  
 Incentive package provides for:  (i) an 
investment grant for two years on approved qualifying assets calculated as follows:  first R 5 million investment:  10% p.a.;  
next R 10 million investment:  6% p.a.;  
next R 15 million investment:  4% p.a.;  next R 20 million investment:  3% p.a.;  
next R 25 million investment:  2% p.a.;  
and next R 25 million investment:  2% p.a.;  and (ii) an additional investment payable in 
the third year based on the ratio of human 
resource remuneration expressed in terms of manufacturing cost must be a minimum 
of 30%; 
incentives are tax-exempted 
Standard Scheme  
 Applicant must be South African citizen, 
must be an owner/manager of the business, 
live in South Africa, must provide at least 10% own contribution;  the business must 
be financially viable Provide cover up to R 1 million of the bank 
facility at 80%, with the fee payable at 3% 
p.a. in advance;  duration:  36 months, but can be extended 
twice for periods of 12 months  
Technology Transfer Guarantee Fund 
(TTGF):  provide loan guarantees for 
SMEs to acquire local or foreign 
manufacturing technology  SMEs with an approval certificate from the 
Council for Scientific and Industrial 
Research for a technology evaluation on 
the proposed technology to be transferred before applying to a financial institution for 
a TTGF guarantee TTGF will guarantee 90% of the 
technology transfer transaction to a 
maximum of R 1 million; 
maximum term for guarantee:  five years; Khula will levy the standard indemnity fee 
of 3% p.a. on the facility as guaranteed, 
payable annually in advance 
Table AIII.4 (cont'd) SACU-South Africa WT/TPR/S/222/ZAF 
 Page 393 
 
 
Scheme:  objective Criteria  Type of incentive 
Industrial Development Zone (IDZ)   
Customs Controlled Area (CCA):  South 
African Revenue Service (SARS) customs officials provide support with customs and 
excise requirements .. Duty-free imports of production-related 
raw materials, including machinery to be used in producing goods for exports; 
zero-rating on VAT for supplies procured 
in South Africa; accessibility to most government incentives 
that will contribute to lowering the cost of 
production;   a one-stop shop centre to prepare all 
required documents to invest; 
reduced red tape; provision of efficient services 
Export Marketing and Investment Assistance Scheme   
Individual exhibitions and in-store 
promotions: assistance granted to exhibit 
products at recognized exhibitions where the DTI does not provide for a national 
pavilion Individual exporters Cost sharing reimbursable grant 
Individual inward bound mission:  
organized by individual entrepreneurs 
where prospective buyers or investors seek 
to conclude export orders or attract FDI South African entities that organize export 
oriented activities Cost sharing reimbursable grant  
Inward buying trade missions:  the DTI 
provides assistance to organizers of inward 
buying trade missions, which seek to 
enable the conclusion of export orders between South African exporters and 
prospective foreign buyers.  Missions are 
organised by export councils, chambers of commerce , PIPAs or the DTI Organizers of "inward buying" trade 
missions for prospective foreign buyers to 
contact South African exporters and 
companies who fall under the services sectors 
the group mission must be organized by a 
qualifying organization, export council or the DTI Cost sharing reimbursable grant  
National pavilions:  assistance provided to 
introduce South African products into foreign markets by participating in foreign 
exhibitions South African manufacturers of products 
including SMMEs, historically disadvantaged individuals (HDIs); 
South African trading house (representing 
at least three SMMEs or HDI entities, Commission agents (representing at least 
three SMMEs or HDI entities; 
South African export councils, industry associations and joint action groups 
(representing at least five South African  
entities) Cost sharing reimbursable grant  
Outward selling trade missions:  the DTI 
provides assistance to South African 
exporters who seek to  conclude export 
orders with foreign buyers.  Missions are 
organized by export councils, chambers of 
commerce, provincial investment promotion agencies (PIPAs) or the DTI South African exporters who wish to make 
contact with foreign buyers or investors;   
the group mission must be organized by a qualifying organization, export council or 
the DTI Cost sharing reimbursable grant  
Primary export market research:  assistance 
provided for costs incurred in finding and 
entering new exporting markets Partially compensate exporters Co st sharing reimbursable grant 
Table AIII.4 (cont'd) WT/TPR/S/222/ZAF Trade Policy Review 
Page 394 
 
 
 Scheme:  objective Criteria  Type of incentive 
Innovation/technology, and 
competitiveness   
Down Stream Aluminium Centre for 
Technology (DACT):  provide 
infrastructure and access to equipment, raw 
material, technical expertise, and managerial assistance, to start up 
businesses in the aluminium casting 
industry;  and provided mentorship and administrative management to increase the 
success rate of fledgling businesses, 
assisting them in securing sales and adhering to qualitative production 
standards Entrepreneurs who have viable ideas on 
starting their own enterprises, provided 
they are investing in aluminium casting  Training provided for entrepreneurs to 
develop and maintain skills; 
entrepreneurs receive support from DACT 
to get funding from other institutions; DACT supports the  entrepreneurs until 
they can survive on their own 
Fund for Research into Industrial 
Development Growth and Equity 
(FRIDGE):  .. .. .. 
FURNTECH:  globally competitive 
furniture production .. .. 
GODISA:  help South Africans to be more 
innovative .. .. 
IDC's Venture Capital Strategic Business 
Unit (SBU):  povide funding to 
entrepreneurs/SMEs to facilitate the development and commercialization of South African intellectual property into 
globally new/unique technology-based 
products Business must be in the start-up stage 
Product must be new/unique from a global 
perspective; ownership of the intellectual property (IP) must vest and remain vested in the 
company invested in 
businesses must create/develop their own IP; 
IP should preferably be patentable, but if 
not should provide some form of sustainable competitive advantage; 
businesses should be viable; 
management teams must include people with all the required key competencies Funding is in the form of equity (shares 
plus shareholder loans) of between 
R 1 million and R 30 million per project (first round funding limited to R 15 million) for a significant minority 
equity stake (between 25% and 50%)  
Innovation Fund:  encourage research 
community .. Grant of R 1-5 million over three years 
Innovation and Technology:  enhance 
industrial development and 
competitiveness through technology support measures .. .. 
Mpumalanga Stainless Initiative (MSI):  
assist emerging entrepreneurs during the start-up of their small business involving 
stainless steel;  equip them with the 
necessary technical skills and technology know-how to develop viable products for 
commercialization;  train them in business 
skills to successfully manage their business;  and assist them with establishing their businesses and marketing their 
products Emerging entrepreneurs Provide rental space at a minimal rent per 
month  
National Fibre, Textile, and Clothing (NFTCC):  promote growth and global 
competitiveness  .. .. 
National Technology Transfer Centre 
(NTTC):  facilitate technology transfer and 
diffusion to SMMEs SMMEs .. 
Table AIII.4 (cont'd) SACU-South Africa WT/TPR/S/222/ZAF 
 Page 395 
 
 
Scheme:  objective Criteria  Type of incentive 
Research and Development:  promote 
research and innovation .. Tax deduction for operating costs related to 
R&D of 25% of the cost of capital 
expenditure approved by the Council for 
Scientific and Industrial Research 
Sector Partnership Fund (SPF):  promote collaborative projects to enhance productivity and competitiveness of the 
manufacturing and agri-processing 
industries Available to partnership of five or more 
organizations that puts forward a qualifying project  Cover 65% of costs of projects up to a 
maximum of R 1. 5 million  
Support Programme for Industrial 
Innovation (SPII):  support innovation 
through the Matching Scheme, the Partnership Scheme (PII), and the Product 
Process Development Scheme  Matching Scheme:  only SMEs 
PII:  all companies 
Product Process Development Scheme:  small enterprises  Matching Scheme:  a 50% taxable non-
repayable grant up to a maximum of 
R 1.5 million with no payback for innovative development of new 
products/processes;  BEE participants 
receive between 65% and 75% of support;  depending on the BEE  shareholding in the 
applying entity; 
PII:  a 50% taxable grant and a payback mechanism based on levy on sales of the 
new product/process. Minimum grant  is 
R 1.5 million; Product Process Development Scheme:  a 
taxable non-repayable grant between 65% 
and 85% of the total qualifying costs incurred in specific development projects up to a maximum grant of R 500,000 per 
project  
Techno-Industry Development Finance:  
develop and expand technology intensive 
business in the IT, telecom, electronic, and 
electrical industries An economically viable business plan 
Minimum financing requirement of 
R 1 million Equity, equity-related, and loan finance for:  
expanding techno business;  new techno 
ventures with strong local or foreign 
technology partners and proven technology;  and takeovers, buy-ins, and 
management buy-outs; 
interest rates are competitive and based on the prime bank overdraft rate 
Technology and Human Resources for Industry Programe (THRIP):  enhance the competitiveness of industry through 
developing skills and technology, and 
encouraging long-term strategic partnerships between industry, research and 
educational institutions, and the 
Government Research groups in natural sciences, 
engineering, and technology within educational institutions, in collaboration 
with private company or consortium of 
companies Industry and Government contribute to 
finance the research efforts providing that projects involve training of students; 
R 1 for every R 2 from industry, and if 
certain criteria are met R 1 for every R 1 from industry could be granted 
Technology Linkages:  keep industry 
well-informed about global technology 
development trends .. .. 
Work Place Challenge:  improve South 
Africa's competitiveness and employment 
creation by improving industrial performance and productivity South African firms  .. 
Sector specific   
Sector (overall)   
Depreciation Allowance:  investment in 
new and used assets  All taxable entities under South African 
income tax legislation Depreciation allowed to calculate income 
tax   
National Industrial Participation Programme:  support the development of South African industry by effective 
government procurement Targeted at South African industries, 
enterprises, and suppliers of goods and services to government/parastatals, where 
the imported content of such goods and 
services equals to or exceed US$10 million Mandatory on all government and 
parastatal purchases or lease contracts (goods and services) with an imported 
content equal to or exceeding 
US$10 million 
Table AIII.4 (cont'd) WT/TPR/S/222/ZAF Trade Policy Review 
Page 396 
 
 
 Scheme:  objective Criteria  Type of incentive 
Strategic Industrial Projects (SIP):  
encourage investment in Maputo Corridor, 
Gauteng special economic zone, and Wild 
Coast and Fish River .. R 3 billion available for investors in 
strategic industrial projects until 2001; 
tax allowances of 50% to 100% of an 
approved investment 
Tax Threshold for Small Businesses:  encourage development of SMMEs Small business corporations (SBCs) with 
gross income not exceeding R 14 million; all shareholders or members of the SBC 
must be natural persons 
shareholders or members of the SBC may not hold any shares or interest in equity of 
any other company; 
a SBC may not be an employment company or a personal service company Taxed on the basis of a progressive rate 
system; 0% of the first R 54,200 of taxable income;  
10% on taxable income in excess of 
R 54,200 but not exceeding R 300,000;  and R 24,580 plus a rate of 28% on taxable 
income in excess of R 300,000; 
accelerated write-off allowance for depreciable assets (other than 
manufacturing assets) acquired on or after 
1 April 2005 at 50% of cost in the year of assessment in which it was brought into 
use;  30% in the second year of assessment, 
and 20% in the third year 
Agriculture   
Agro-industries Development Finance:  develop and expand the agriculture, food, beverage, and aquaculture sectors An economically viable business plan; 
minimum financing requirement of R 1 million Medium-term finance in the form of loans, 
equity, and quasi-equity to establish permanent infrastructure  in the agriculture 
sector and aquaculture, and new or 
expanding undertakings in food and 
beverage sector; interest rates are competitive and based on 
the prime bank overdraft rate  
Orchards schemes:  encourage job creation  Support the development of horticulture;  
focuses on labour-intensive activities  Discounts provided on interest rates, and 
more flexible repayment terms 
Mining   
Entrepreneurial Mining and Beneficiation 
Finance:  develop small and medium-sized 
mining and beneficiation activities and 
jewellery manufacturing An economically viable business plan; 
minimum financing requirement of 
R 1 million (debt finance) and R 5 million  
(equity)   Medium-term finance in the form of loans, 
equity, and quasi-equity to establish or 
expand junior mining houses;   acquire 
mining assets by HDPs;  undertake mining-related activities such as contract 
mining;  and establish or expand jewellery 
manufacturing activities; interest rates are competitive, risk related, 
and based on prime ba nk overdraft rate 
Manufacturing   
Accelerated Depreciation Allowance:  
promote acquisition of new assets Assets acquired after 1 March 2002  Allo wance to write off manufacturing asset 
over four years:  +40% for cost in first year 
and +20% for next three years 
Assistance by Individual Primary Steel 
Producers:  rebates determined between 
producer and exporter on an individual basis .. Primary steel producers offer price rebate 
scheme to exporters of secondary steel 
products 
Chemicals and allied industries:  support 
and promote entrepreneurship, industrial 
development, and strategic partnership by building competitive industries and 
enterprises (upstream and basic chemicals;  
ceramic, concrete and stone products;  cosmetics and detergents;  fine and 
speciality chemicals;  glass products;  
recycling;  rubber products;  and plastic products) An economically viable business plan;  
for chemicals and allied industries: 
minimum loan of R 1 million at a prime linked interest rate; 
minimum equity amount of R 5 million at a 
minimum of 8% real after internal rate of return (IRR) tax Shareholders expected to make 35% of 
total assets and 45-50% for start-ups, 
depending on the industry norms and risk profile 
Table AIII.4 (cont'd) SACU-South Africa WT/TPR/S/222/ZAF 
 Page 397 
 
 
Scheme:  objective Criteria  Type of incentive 
Finance for textiles, clothing, leather, and 
footwear industries:  develop and expand 
the sectors by providing finance for the 
creation of new or additional production capacity; setting up distribution channels;  
working capital, and pre- and post 
shipment trade finance for exports An economically viable business plan; 
a financial contribution of at least 35-50% 
(depending on the nature of the business) 
by the promoters (10% to 20% for historically disadvantaged persons 
(HDPs));  
minimum financing requirement of R 500,000 Medium-term finance in the form of loans, 
suspense sales, equity, and quasi-equity; 
interest rates are competitive, risk related, 
and based on the prime bank overdraft rate 
Finance for the Expansion of a 
Manufacturing Sector:  develop and expand 
the manufacturing sector by providing 
finance for the creation of new or additional capacity An economically viable business plan;   
a meaningful financial contribution of at 
least 33% by the promoters (10% to 20% 
for HDPs);   minimum financing requirement of 
R 1 million Medium-term finance in the form of loans, 
suspensive sales, equity, and quasi-equity 
or creation of new or additional production 
capacity;   interest rates are competitive and are based 
on the prime bank overdraft rate 
Food, beverage, and agri-industries 
(horticulture primary agricultural, food 
processing, agro-industrial, beverage, and 
fishing and aquaculture) An economically viable business plan  Sh areholders expected to make 35% of 
total assets and 45-50% for start-ups, 
depending on the industry norms and risk 
profile 
Foreign Investment Grant:  assist foreign 
investors in investing in new 
manufacturing businesses by compensating them for the cost of relocating new 
machinery and equipment to South Africa 
from abroad Any company, provided it is a registered 
incorporated legal entity in South Africa Cash incentive plan;   
grant not exceeding R 3 million nor the 
actual cost of relocating, or 15% of the value of the new machinery and equipment 
relocated from overseas 
Fund for the Committee on Secondary 
Manufacture:  encourage the use of primary 
steel in the manufacture of secondary steel 
products for export ..  Financially supported by primary steel 
producers 
Metal, transport, and machinery (basic iron, 
steel and non-ferrous fabricated metal 
products, plant, machinery and equipment, motor vehicles, components and 
accessories; and diverse transport products 
(e.g. boats, planes, and trains):   An economically viable business plan;  
shareholders financial contribution 
expected to make up at least 35-50% (depending on the nature of the business) 
and 10-20% for HDPs;   
minimum financing requirement of R 1 million Medium-term finance in the form of loans,  
equity, and quasi-equity or creation of new 
or additional production capacity;  interest rates are competitive and are based 
on the prime bank overdraft rate 
Motor Industry Development Programme 
(MIDP)b:  increase competitiveness and 
productivity Motor vehicle assemblers, and component 
manufacturers and exporters Enable local vehicle and component 
manufacturers to increase production; encourage rationalization of the number of 
models manufactured for export and 
complementing imports of vehicles and components; 
rebates  are not in excess of the full rate of 
duty 
Motor Industry Development Programme 
(MIDP) Productive Asset Allowance:  
encourage fixed capital investment and rationalization of model ranges, in 
particular light vehicles Motor vehicle assemblers, and component 
manufacturers Duty credit calculated at 20% of the value 
of expenditure on productive assets;  
credit against import duties and spread equally over five years 
Partnership in Industrial Innovation:  stimulate industrial re search and innovation .. Reimbursive grant for up to 50% of 
development cost of product;   amount based on commercial success of 
product 
Table AIII.4 (cont'd) WT/TPR/S/222/ZAF Trade Policy Review 
Page 398 
 
 
 Scheme:  objective Criteria  Type of incentive 
Public Private Partnerships (PPP):  
facilitate the provision of bulk industrial 
infrastructures in electricity generation, 
transmission, and distribution;  telecom; transport; and bulk water and waste 
treatment An economically viable business plan; 
every project considered on its own merits 
but preference given to projects that have 
significant social and financial impact;   
 minimum loan of R 10 million at 
competitive lending rate;   
smaller projects with  funding from the Industrial Development Corporation of at 
least R 1 million also considered Equity contributions of 15% to 25% typical 
for such projects;  all projects evaluated on 
economic merit with a 8% rate of return 
after tax considered 
Wood, paper, and other industries (forestry, 
pulp and paper, furniture, saw milling, 
board production, and renewable energy industries) An economically viable business plan;  
minimum loan of R 1 million; 
compliance with international environmental standards Reasonable financial contribution from 
owners, generally 33% (of total assets) for 
going concerns and 45% for start-ups, depending on the industry norms and risk 
profiles 
Services   
Location Film and TV production Incentive   Rebate available to foreign-owned 
qualifying productions with qualifying 
South African production expenditure (QSAPE) of R 12 million and above Rebate calculated as 15% of QSAPE;   
maximum rebate capped at R 10 million 
Franchising:  traditional and non-traditional 
areas (e.g. fast food/restaurants;  communication and IT;  health and beauty;  
speciality stores;  travel;  retail;  petroleum; 
and hardware/equipment rental) An economically viable business plan; 
minimum facility amount of R 1 million  Financing for a maximum of six years; 
repayments tailored to  suit the borrower's 
cash flow 
Health care and education (manufacturing of medical equipment, medical schemes 
administration and management, medical 
and dental practices activities, clinics and related services, hospital services, human 
health services) An economically viable business plan; 
minimum financing requirement is 
R 1 million; 
compliance with the international environmental standards Shareholders/owners expected to make a 
significant financial contribution, generally 
35% of total assets for going concerns and 
45%-50% for start-ups, depending on the industry norms and risk profile  
Media and motion pictures (motion pictures, broadcasting, printing, post-
production, publishing, advertising, and 
music) An economically viable business plan 
Minimum financing requirement:  
R 1 million  
South African Film and TV production and 
Co production Incentive Rebate available to qualifying; 
South African production and official 
treaty co-productions with total production budgets of R 2.5 million and above Rebate calculated as 35% of first 
R 6 million of the QSAPE;  thereafter 25% 
for the remainder; rebate is capped at R 10 million 
Financial services   
Business Linkage Challenge Fund:  link businesses to ensure transfer of knowledge, 
technology, skills, information, and market 
access required for global competitiveness of particular benefit to the poor .. On bidding basis; 
must have private-sector partner; 
projects compete on global basis for 
available funds;  grants range from R 50,000 to R 1 million  
Business Loans for Retail Finance Intermediaries (RFIs):   provide finance for RFI to finance .. Less experienced:  loans between R 1 and 
R 10 million More experienced:  loans from R 5 to 
R 100 million 
Capacity Building Support for Retail 
Finance Intermediaries:  provide capacity building support to new RFIs to initiate a 
loan portfolio and assist existing RFIs to 
expand their loan portfolios To qualify, an RFI must:  be legally 
constituted;  have clearly defined SMME target markets;  have sound accounting and 
financial systems;  have sound internal 
organizational guidelines, policies, and procedures;  have capacity to carry out 
current and proposed projects;  and have 
clear and achievable short and medium term objectives Support will be structured around the 
capacity needs to the RFIs; grants range from R 10,000 to R 500,000 
Table AIII.4 (cont'd) SACU-South Africa WT/TPR/S/222/ZAF 
 Page 399 
 
 
Scheme:  objective Criteria  Type of incentive 
Financial Deepening Challenge Fund:  
support financial-sector capacity 
development .. Cover costs of expansion of financial 
service products and extension of services 
to poor; 
cost-sharing grants range from R 50,000 to R 1 million 
Khula Credit Guarantee:  promote SMMEs and RFIs through provision of guarantees 
for securing bank loans SMMEs and RFIs Provide maximum guarantee of R 600,000 
over three years for SMMEs;  
firm must have net asset value of at least 
R 2 million and meet bank's normal lending requirements 
Seed Loans for Retail Finance Intermediaries (RFIs):  provide initial capital to new organizations to initiate their 
portfolio, and to fund operational expenses 
over a predetermined period To qualify an RFI must: be legally 
constituted;  have clearly defined SMME target markets;  have sound accounting and 
financial systems;  have sound internal 
organizational guidelines, policies, and procedures;  have capacity to carry out 
current and proposed projects;  have clear 
and achievable short and medium-term objectives;  and have matching funds of at 
least 15% of envisaged operating expenses Amount between R 50,000 and 
R 20 million; seed loans converted to grants once 
mutually agreed performance criteria are 
met 
Wholesale Finance:  wholesale funding to intermediaries for on-lending to individual 
entrepreneurs Franchises and other applicants must have:  
a good record of business development;  a 
strong financial position;  
developed/acquired a training and mentorship programme;  require financing for on-lending to at least ten projects (at 
least 60% HDPs); and minimum financing 
requirement of R 1 million Medium-term loan (max. six years); 
interest rates are competitive, risk related, 
and based on the prime bank overdraft rate 
Transport   
Transport promotion:  promote 
entrepreneurship, facilitate transport links and access to financial services in transport 
services (road freight, logistic, maritime, 
aviation, and bus sector) An economically viable business plan;  
minimum loan of R 1 million; minimum of R 500,000 for bridging 
facilities;  and R 5 million for 
equity-related transactions .. 
Tourism   
International Tourism Marketing 
Assistance Scheme:  promote the marketing of the South African tourism 
industry .. Partial compensation of businesses for 
predetermined costs incurred in promotion of products related to tourism 
Tourism Development Finance:  develop 
and expand the tourism industry by 
providing finance for commercial projects 
in the medium to large sector of the tourism industry;  increase participation in 
projects related to the 2010 Soccer World 
Cup An economically viable business plan with 
adequate financial support from 
shareholders;  
minimum financing requirement of R 1 million Medium-term finance in the form of loans, 
equity, and quasi-equity for the creation or 
upgrading and renovation of tourist 
facilities (including hotels, and conference and convention centres); 
interest rates are competitive, risk related, 
and are based on the prime bank overdraft rate  
Tourism Schemes:  develop tourism, in particular eco-tourism .. Capital for development of new or existing 
tourism facilities 
Table AIII.4 (cont'd) WT/TPR/S/222/ZAF Trade Policy Review 
Page 400 
 
 
 Scheme:  objective Criteria  Type of incentive 
Tourism Support Programme:  offer a grant 
up to 30% of an investment to establish or 
expand existing operations in South Africa Applicant must be a registered legal entity 
in South Africa in terms of the Companies 
Act; 
available to local- and foreign-owned enterprises, and granted for qualifying 
investment costs of furniture, equipment, 
vehicles, land, and buildings of up to R 200 million Maximum:  R 30 million 
.. Not available. 
a Effective from 6 December 2006 to 31 March 2011. 
b Will be replaced by the Automotive Production and Development Programme (APDP) from 2013. 
Source:  Department of Trade and Industry online information, "O fferings:  Incentives and Deve lopment Finance".  Viewed 
 at:  http://www.dti.gov.za [20 Februa ry 2009];  Department of Trade and I ndustry online information, "Offerings:  
 Information, Advice, a nd Facilitation:  National Industrial Part icipation Programme".  Viewed at:  
 http://www.thedti.gov.za/offerings/ offering.asp?offeringid=127 [6 March 2009];  Mbendi Information Service 
 online information, "Sout h Africa:  Incentives".  Viewed at:  http://www.mbendi.com /land/af/sa/p0027.htm 
 [20 February 2009];  and Industrial Development  Corporation  online information.  Available at:  
 http://www.idc.co.za/default.asp [29 January 2009];  a nd South Africa Info online information, "Spatial 
 Development Initiatives".  Viewed at:  http://www .southafrica.info/doing_business/economy/development/sdi.htm 
 [24 February 2009];  DATC online information, "The  Programme".  Viewed a t:  http://www.dact.co.za/ 
 programme.asp;  TradeInvest South Africa online informat ion, "Foreign Investment Grant (FIG)".  Viewed at:  
 http://www.tradeinvestsa.co.za/in centives/983081.htm [6 March 2009];  TradeInvest South Africa online 
 information, "Film Industry Rebate Scheme".  Viewed at:  http://www.tr adeinvestsa.co.za/incentives/983076.htm 
 [6 March 2009].  WTO (2003), Trade Policy Review:  SACU , Geneva;  Department of Trade and Industry online 
 information, "Regulatory Environment:  Industrial De velopment Zones".  Viewed at:  http://www.dti.gov.za/ 
 investing/regulatoryenvironment.htm [4 March 2009];  Department of Trade and Industry online information, 
 "Export Marketing and Investment Assistance Scheme".  Viewed at:  http:// www.dti.gov.za/offerings/ 
 offering.asp?offeringid=204 [20 February 2009];  and info rmation provided by the South African authorities.