BRAND SOUTH AFRICA Nation Brand Performance Presentation · The Gautrain rapid rail system links...

BRAND SOUTH AFRICA

Nation Brand Performance

Presentation

Vision 2030 Summit

Dr Petrus de Kock – General Manager, Research

20/6/17

1

Public Service

Announcement

Otherwise This May Happen…

Buckle

Up!

Keep Your

Limbs

Inside the

Vehicle at

All Times!2017/06/20 1 2

Imagine….

2017/06/20 1

Alien surfs the Interplanetary

DeepSpaceInterWeb and finds

out he is looking at

PLANET EARTH

BUT…

● All scientists and learned people concerned with the inner workings of the Universe point out that there is no such thing as up or down in space!

● This means, North is not necessarily “UP”, and South also not always “DOWN there…”

● This means, as our alien parks off on the moon, checking out Earth

below, he sees, WOW!, –

there’s a country called South Africa at the top of the world!

2017/06/20 1

This is where Brand South Africa comes into our story!

Vision 2030 Summit – 21 June 2017

Main thoughts

1. Creation and realisation of the vision of a democratic society

2. Global economic and geopolitical context of realising the national

vision

3. The positioning and profile of the Nation Brand viewed through

the lens of Nation Brand Performance

4. Transformation and imagination – the case of agrarian and land

reform in 21st century South Africa (Old Mutual Breakaway session)

2017/06/20 1

The following presentation provides an overview of Brand South Africa’s

Nation Brand Performance Monitoring.

Focussing on three realms of governance – global, political and

economic/corporate – it aims to profile the competitive strengths,

advantages and challenges of the Nation Brand.

In addition to sketching South Africa’s investment profile, it includes

perspectives on country performance from a number of indices, such as

the WEF Global Competitiveness Index; the Ibrahim Index of African

Governance; the World Bank Doing Business Index, and the UNDP Human

Development Index to name a few.

Please note that the full pack of slides profiling the Nation Brand consists

of the following: Global Governance; Political Governance; Corporate &

Economic Governance; Nation Brand performance SWOT Analysis; and

Nation Brand profiling.

Introduction

Contents

Executive Summary


Global Governance

Political Governance

Corporate & Economic Governance

South Africa’s inbound & outbound

investment profile

Nation Brand Index – Reputation

International Investor Perceptions Research

Domestic Perceptions Research

7

Executive Summary

● In terms of both reputation (Nation Brand Index), and competitiveness (WEF), the Nation Brand improved during the 2016/17 FY;

● However, in the Ibrahim Index of African Governance, a particular challenge is emerging in terms of perceptions of governance capability – 6/52;

● Nation Brand Performance furthermore finds that the profile of South Africa as recipient, and source of FDI on the African continent, is a strength and can be leveraged to advance national strategic objectives on creating deeper inter-linkages at regional and continental levels;

● Challenges to be aware of: deteriorating perceptions of governance capability; perceptions of crime and corruption and reputation inhibitors – need nuanced evidence based communications; Ease of Doing Business – in terms of e.g. Starting a business.

Executive Summary

● In terms of Investor Perceptions – notable differences between regions and markets, however, consistent concern on crime and corruption as inhibitors;

● Geographical position, infrastructure, a diverse economy, stand out as attractiveness features;

● In terms of investor perceptions, ASIAN markets present the biggest challenge in terms of over-all familiarity, and reputation. Given the growing significance of Eastern economies in a global shift of economic power, it necessitates closer investigation;

● The African environment is by far the most positive towards South Africa as investment destination and trade partner.

● NOTE: In addition to the Nation Brand Performance presentation Brand South Africa is also sharing with IMC:

– 16 per market Research Notes analysing data from the Investor Perceptions and Nation Brand Index studies

NATION BRAND PERFORMANCE


● Governance plays a critical role in shaping the reputation of the

Nation Brand

● For this reason the Brand South Africa Nation Brand Performance

presentation is anchored by perspectives on governance in 3

realms of activity:

Governance

Global

Political Corporate

GLOBAL GOVERNANCE


Nation Brand Performance – Global Governance

The Nation Brand’s global and domestic reputation is to a large extent

shaped by perceptions of efficient internal governance, while the

nation brand’s contribution to global governance has a direct bearing

on international perceptions

Global Governance Contribution

Peaceful internally negotiated

political settlement

Active role in transforming OAU to

AU & contribution to Peace &

Security on the African continent

Served 2 terms as non-permanent

member of the UN Security Council

Champion of New Partnership for

Africa’s Development

Plays an active role in the G20 Included as fifth member of BRICS

POLITICAL GOVERNANCE


Nation Brand Performance – Political Governance

Constitution of the Republic of South Africa

Preamble

We, the people of South Africa,

Recognise the injustices of our past;

Honour those who suffered for justice and freedom in our land;

Respect those who have worked to build and develop our country; and

Believe that South Africa belongs to all who live in it, united in our diversity.

We therefore, through our freely elected representatives, adopt this Constitution as the

supreme law of the Republic so as to

• Heal the divisions of the past and establish a society based on democratic values, social

justice and fundamental human rights;

• Lay the foundations for a democratic and open society in which government is based on the

will of the people and every citizen is equally protected by law;

• Improve the quality of life of all citizens and free the potential of each person; and

• Build a united and democratic South Africa able to take its rightful place as a sovereign state

in the family of nations.

May God protect our people.

Nkosi Sikelel’ iAfrika. Morena boloka setjhaba sa heso.

God seën Suid-Afrika. God bless South Africa.

Mudzimu fhatutshedza Afurika. Hosi katekisa Afrika.

Snapshot of key performance indicators

Governance Indicators

WEF – Institutions = 40/138 (2016)

WEF – Financial Market Development = 11/138 (2016)

IMD – Government Efficiency = 40/60 (2016)

Open Budget Index = 3/102 (2015)

World Press Freedom Index = 39/180 (2016)

Nation Brand Performance: Political Governance

The Mo Ibrahim Index of African Governance 2016

● An annual assessment of quality of governance in every African country

● South Africa ranks 6th out of 54 countries overall

● Scores in the Top 10 in all four categories


Safety &

Rule of Law

Sustainable

Economic

Opportunity

Participation

& Human

Rights

Human

Development

2nd 6th5th7th

Source: Mo Ibrahim Foundation, 2016 IIAG, Index Report

Human & Social Development Indicators

● Since the dawn of democracy, and regardless

of economic challenges in recent years, SA

has been making steady progress on the

front of human & social development

Source: UNDP, Human Development Report 2015

2010

(2011 HDR)

2011 2012

(2013 HDR)

2013

(2014 HDR)

2014

(*2015 HDR)

Rank 123 (/187) 123 (/187) 121 (/186) 118 (/187) 116 (/188)

HDI Value 0.643 0.651 0.659 0.663 0.666 é

SA’s HDI trends 2011-2015


● The UNDP’s Human Development Index (HDI) charts SA as having progressed

as follows:

CORPORATE & ECONOMIC

GOVERNANCE


WEF Global Competitiveness Report 2016/17

Nation Brand Performance:Corporate Governance

● SA ranks 47th out of 138 economies, SA & Mauritius are top African performers

● 12 competitiveness pillars:

Institutions Labor market efficiency

Infrastructure Financial market development

Macroeconomic environment Technological readiness

Health and primary education Market size

Higher education and training Business sophistication

Goods and market efficiency Innovation

Strengths: Financial market development (11), Market Size (30), Institutions (40), Business sophistication (30), Goods and market efficiency (28)

Improvements: Technological readiness (50 to 49), Innovation (38 to 35), Labour market efficiency (107 to 97), Macroeconomic environment (85 to 79), Health & Primary education (126 to 123), Infrastructure (68 to 64), Labour Market Efficiency (107 to 97)

Challenges: Higher Education & Training (83 to 77)

Starting a business Protecting investors

Dealing with construction permits Paying taxes

Getting electricity Trading across borders

Registering property Enforcing contracts

Getting credit Resolving insolvency

World Bank Doing Business Index 2017

● SA ranks 74th out of 190 economies

● 10 topics:

Nation Brand Performance:Corporate Governance

Strengths: Protecting investors (22/190), paying taxes (51/190), resolving insolvency (50/190), Getting credit (62/190)

Improvements: Resolving insolvency (51 to 50/190)

Challenges: Starting a Business (131), Registering Property (105), Trading across Borders (139), Getting Electricity (111), Enforcing Contracts (113), Dealing with construction permits (99)

Source: World Bank (2016): Doing Business 2017: Equal Opportunity for All

SOUTH AFRICA’S INBOUND &

OUTBOUND INVESTMENT PROFILE


Infrastructure (1)

Road and Rail Transport

A massive motorway improvement scheme has seen extra

lanes added, a sophisticated electronic toll system

introduced and interchanges drastically renovated

The Gautrain rapid rail system links the OR Tambo

International Airport with stations in Johannesburg and

Pretoria

South Africa has world-class infrastructure, including an excellent transport

network, low-cost energy and sophisticated telecommunications facilities

Infrastructure

Indicators

WEF – Quality of roads = 29/138 (2016)

WEF – Quality of railroad infrastructure = 40/138 (2016)

IIAG – Overall Infrastructure 6/54 (2016)

SA Investment Profile

Infrastructure (2)

Ports

Most advanced port infrastructure on the African continent

Saldanha Bay in the Western Cape is the largest natural

anchorage with the deepest water, 60 nautical miles

northwest of Cape Town

The Durban port in KZN handles the greatest volume of sea-

going traffic of all SA ports

The Richards Bay Port in KZN can handle a total of 1 782

ships with a gross tonnage of 65 994 515 in a year

The Port Elizabeth Port in the Eastern Cape handled a total

of 976 ships during the 2015 calendar year

The Cape Town Port in the Western Cape competes with

Alexandria for recognition as the most famous port in Africa

Infrastructure

Indicators

WEF – Quality of port infrastructure = 37/138 (2016)

IMD – Reliable infrastructure = key attractiveness factor of the economy


Infrastructure (3)

Air Transport

OR Tambo International caters for 19 million passengers

annually

Airports Company of South Africa (ACSA) operates 9 airports,

which handle more than 200 000 aircraft landings

The numbers all add up to ACSA being Africa’s premier airports

authority

Infrastructure

Indicators

WEF – Quality of air transport infrastructure = 10/138 (2016)

WEF – Available airline seat km/week, millions* = 28/138 (2016)

IIAG – Air transport = scores 97/100 (2016)


EY – Africa Attractiveness Survey (2016)


Source: EY Africa Attractiveness Survey 2015 & 2016

Inbound:

• Notable in this regard is that EY

indicates investment flows

favoured Africa’s more

diversified markets. This means

South Africa’s economic profile

and diversification remains a

key attractiveness feature.

• EY furthermore indicates that

South Africa experienced an

increase of 6.9% in FDI flows to

the market in 2016.

• EY notes that, “Even as its

economy remains under

pressure, South Africa retains its

appeal as a Launchpad for

growth across the continent.”

Outbound:

• In 2016/7, SA is the 6th largest

global investor into the African

economy

Inbound:

• South Africa continues to attract

the bulk of FDI projects destined

for the continent with a share of

20.6%, Egypt at 11.7%, Morocco

at 12%, Nigeria at 7.5%, and

Kenya at 5.9%.

• The sector that dominates:

Consumer Products & Retail –

projects more than doubled from

19 in 2015 to 41 in 2016.

EY Attractiveness Survey 2017 – Sources of FDI into African

Economy

Source: EY Africa Attractiveness 2016


AT Kearney FDI Confidence Index 2017

The AT Kearney Future Outlook

for South Africa

Challenges:

● Governance

● Exchange rate volatility

● Decreased trust in political

leaders

● The unemployment rate of

26.5%

Opportunities:

● To capitalise on its improving economy and regional role.

● GDP growth is expected to reach 0.8% in 2017 and double to 1.6% in 2018.

● With renewed improvements in infrastructure and education, investors view the country poised to lead one of the world’s next major manufacturing hubswith a primary source of global population growth in the coming decades.

AT Kearney FDI Confidence Index 2017

Intra-SADC investment


• South Africa plays pivotal role in the

economic revival of the continent

• Contributes 68% of SADC GDP

• SA invested USD1,4b in 75 new FDI

projects in Africa (2012)

• Created 50,000 jobs Africa-wide

Source: Inside Southern Africa, September 2015

World Bank Logistics Performance Index 2016

● The LPI is an interactive benchmarking tool created to help countries identify

the challenges and opportunities they face in their performance on trade

logistics and what they can do to improve their performance

Source: World Bank Logistics Performance Index 2016, lpi.worldbank.org

● South Africa ranks 20th out of 160 countries overall

LOGISTICS PERFORMANCE INDEX

South Africa’s Performance

Overall

Rank

Customs Infrastructure International

Shipment

Logistics Quality

& Competence

Tracking &

Tracing

Timeline

2014 34 42 38 25 24 41 33

2016 20 18 21 23 22 17 24


NATION BRAND INDEX

Brand Reputation

ExportsTourism

Governance

Culture and Heritage

PeopleSkills and openness

Investment Potential and

attractiveness to outsiders

Commercial and cultural

products and sporting prowess

Competency fair

governance, human

rights, international

contribution

Potential attractiveness

and economical

contribution

Level of

satisfaction with

country’s products

and services

Investment &

immigration

South Africa’s Performance on the Nation Brand Index

33

Brand Reputation: International Perceptions

Source: Anholt-GfK Roper Nation Brand Index

How South Africa ranks overall on the six pillars the NBI (2014)

37/50

Investment &

Immigration

37Tourism

37Exports

36

People

37Culture

29

Governance

39

•Science & Technology

35

•Buy Products35

•Place36

•Competent & Honest40

•Rights & Fairness39

•Peace & Security37

•Environment34

•Poverty42

•Sports20

•Cultural Heritage35

•Contemporary Culture36

•Welcoming36

•Close Friend30

•Employability33

•Visit if money is no object

38

•Natural Beauty20

•Historic Buildings40

•Vibrant City39

•Work & Life38

•Quality of Life39

•Educational Qualifications35

• Invest in Business36

•Equality in Society38

38/50

Investment &

Immigration

39


•Science & Technology

35

•Buy Products35

•Place36

•Competent & Honest38

•Rights & Fairness41

•Peace & Security38

•Environment35

•Poverty43

•Sports16

•Cultural Heritage36

•Contemporary Culture35

•Welcoming36

•Close Friend31

•Employability32

•Visit if money is no object

38

•Natural Beauty18

•Historic Buildings42

•Vibrant City39

•Work & Life38

•Quality of Life40

•Educational Qualifications35

• Invest in Business35

•Equality in Society38

Exports

36

Governance

39 Culture

30

People

36

Tourism

36


ExportsTourism

Governance

Culture

People

Investment &

Immigration

35/50

36

36 36

33

30

37

• Science & Technology

35

• Buy Products34

• Place36

• Competent & Honest

38

• Rights & Fairness

38

• Peace & Security

34

• Environment29

• Poverty38

• Sports16

• Cultural Heritage

35

• Contemporary Culture

37

• Welcoming33

• Close Friend32

• Employability

33

• Visit if money is no object

38

• Natural Beauty

21

• Historic Buildings

43

• Vibrant City38

• Work & Life35

• Quality of Life38

• Educational Qualifications

34

• Invest in Business36• Equality in

Society37

SA INC PROJECT & INTERNATIONAL

INVESTOR PERCEPTIONS

Brand Reputation

38

Regions covered in the survey

BRAND SOUTH AFRICA INVESTOR PERCEPTIONS RESEARCH

Europe

Africa & Middle East

Asia

Americas

39

Africa and Middle East

Asia Europe

Americas

Methodology overview:Democratic Republic of Congo

Ghana

Kenya

Nigeria

Senegal

United Arab Emirates

n=51

n=50

n=52

n=56

n=51

n=50

Translation into French

Translation into French

n=310 n=100

n=152n=250

Brazil

United States of America

Translation into Portuguese

n=50

n=50

China

India

Japan

Russia

Singapore

n=50

n=50

n=50

n=50

n=50

Questionnaire length:40-45 minutes

France

Germany

United Kingdom

n=52

n=50

n=50

2016:

n=812


40

Country Reputation Index: Total Level

60

38

19

28

0

10

20

30

40

50

60

70

80

90

100

Total Africa Total Americas Total Asia Total Europe

South Africa

South Africa has a better reputation index amounts fellow Africans, this is in comparison to the Americas, Asia and Europe who rated South Africa lower


41

Country Reputation Index: Africa

60 59 56

25

69 7180

-100

-80

-60

-40

-20

0

20

40

60

80

100

Total DRC Ghana Kenya Nigeria Senegal UAE

South Africa


42

Country Reputation Index: Americas

3848

28

-100

-80

-60

-40

-20

0

20

40

60

80

100

Total Brazil USA

South Africa


43

Country Reputation Index: Asia

19 20

48

1

48

-20

-100

-80

-60

-40

-20

0

20

40

60

80

100

Total China India Japan Russia Singapore

South Africa


44

Country Reputation Index: Europe

28

48

1420

-100

-80

-60

-40

-20

0

20

40

60

80

100

Total France Germany UK

South Africa


45

Familiarity

75%

Q1. How well do you feel you know the following countries on a scale of 1 to 5, where 1 is Never heard of, 2 – Only know the country by name, 3 – Know a little, 4 – Fairly well and 5 – Extremely well?

Top 2 Box

58%37% 35%

Africa & ME Americas Asia Europe

n=310 n=100 n=250 n=152


79% 57%53% 48%

Africa & ME Americas Asia Europe

n=310 n=100 n=250 n=152Top 2 Box

Favourability

Prepared by Brand SA Research

Contact:

Dr Petrus de Kock, GM – Research

[email protected]

Leigh-Gail Petersen, Research Manager

[email protected]

Readers are welcome to use the data

contained in this report for their own

purposes provided they acknowledge the

source as: Brand South Africa, Research &

Nation Brand Performance Presentation,

October 2015, available at:

www.brandsouthafrica.com

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