South Africa Culture of Business

By | July 24, 2022
Basic data
Capital Pretoria
Population 60.67 million
Language English (most widely used), Afrikaans, isiZulu, isiNdebele, isiXhosa, Sependi, Sesotho, Setswan
Religion Christianity (81%), Islam (1.4%), Hinduism (1.2%), Traditional African Cults (0.3%), Judaism (0,
State system parliamentary republic
Head of State Cyril Ramaphosa
Head of government Cyril Ramaphosa
Currency name South African Rand (ZAR)
Travel
Time shift +1 hour (in summer +0 hours)
Economy 2021
Nominal GDP (billion USD) 878.8
Economic growth (%) 4.9
Inflation (%) 4.6
Unemployment (%) 34.8

Despite the social and economic challenges it has been going through in recent years, the Republic of South Africa, with its more than 60 million inhabitants, remains by far the most developed and diversified economy in Africa and a relatively advanced democracy. The country is a major international political player and an informal spokesperson for African countries in multilateral forums.

South Africa is a parliamentary republic, although unlike most such republics, the president is both head of state and head of government and depends on the confidence of parliament to act. In the South African Republic, the traditional democratic separation of powers is applied. The executive, legislature and judiciary are subject to the constitution and high courts have the power to strike down executive actions and decisions of parliament if they are unconstitutional.

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The ruling ANC has been in power since the mid-1990s. The decade of previous President Jacob Zuma’s rule had a very destructive impact on the South African economy and society. Under his watch, all key departments, institutions and state-owned enterprises were taken over by his loyal followers, plunging the country into unprecedented corruption and public administration chaos due to their greed and incompetence. In 2018, the current president Cyril Ramaphosa inherited South Africa from his predecessor in a very desolate state. Objectively, it can be said that the president’s cabinet is trying to reform the South African economy, but its room for maneuver is greatly limited by the ideological fragmentation of its party, the ANC. The opposite of President Ramaphosa’s efforts is the populist faction of the party known by the acronym RET, i.e. Radical Economic Transformation,

The country is struggling with long-term low economic growth, which did not exceed 1% on average in the decade preceding the covid-19 pandemic and the war in Ukraine. The low rate of GDP growth is related to the high rate of unemployment, which has already exceeded 35%, and among young people it is at an alarming 50%. In terms of unemployment, the South African Republic thus ranks unflatteringly first on a global scale, while the South African Republic is also the country with the highest so-called Gini coefficient, which reflects social differences.

Considering the relative maturity of the South African economy and its high degree of diversification, opportunities for Czech companies can be seen across the vast majority of all traditional economic sectors, but a high level of competition from foreign companies must be taken into account here. In this sense, key industries include, among others, the automotive, chemical, mining, mining and oil industries. Then there is the engineering industry, healthcare and also the ICT industry.

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However, South Africa’s banking system, with its central bank, the SARB, remains robust and well-regulated, South Africa’s capital markets are highly liquid, and South Africa remains among the top three destinations with the highest levels of foreign direct investment on the continent.

From the point of view of the culture of business dealings, the Republic of South Africa is in no way fundamentally different from the “Western-type” business environment we are familiar with. There is no excessive emphasis on the formality of the meeting. Therefore, negotiations often take place in a popular restaurant or on the golf course.

Culture of business dealings

Subchapters:

  • Introduction
  • Addressing
  • Business Meeting
  • Communication
  • Recommendations
  • Public holidays

Introduction

Local business practices do not differ much from European standards. The business environment of South Africa is very well established and it is no exaggeration to say that here you will encounter competition, companies, brands and services that you are used to from fully developed “western-type” countries. The JAR has a very diverse demographic composition. In addition to the original black or white population, you will encounter here the largest Indian minority outside of India, and considering that South Africa can be considered the “gateway to Africa”, groups of almost all nations of the world are represented here – in this regard, the more significant the economic the relationship between the given country and the South African Republic, the more members of the given country reside here temporarily or permanently. It is not for nothing that South Africa is nicknamed the “rainbow nation”.

Addressing

In terms of approaching potential partners, there are no guaranteed or best practices. The most common means of communication everywhere in the world is certainly e-mail for business communication, but of course nothing compares to personal contact, which in the JAR almost always takes place on a rather less formal friendly level. Although in Europe, traditional trade fairs are less and less important, in South Africa they are undoubtedly a very good way to make initial contact. Online conferences and networking events are also increasingly popular. Given the good accessibility of South Africa and also the fact that in business hubs such as Johannesburg or Cape Town you will come across infrastructure and amenities that you would not expect in Africa, there is nothing better than simply buying a plane ticket and for personal negotiations, ideally in connections with the relevant fair,

Business meeting

Here, too, we cannot talk about any customs or expected ways of arranging meetings. The first meeting most often takes place at the company headquarters of the South African partner and is followed by a joint lunch or dinner. Meetings in an informal environment are often the most productive, for example when a business partner invites you to his home for a so-called braai or to play golf, which is very popular in South Africa. As for the composition of the negotiating team, it should ideally include so-called decision makers, i.e. executive management and above. Arranging meetings with the top management of South African companies is not a problem, but this can be different if it is only a subsidiary of a multinational conglomerate. It should be taken into account that in most cases you will not succeed in making an appointment on a Saturday, Sunday or holiday. It is best to make an appointment for Tuesday, Wednesdays and Thursdays, namely outside rush hour, i.e. between 9:00 a.m. and 2:00 p.m. In South Africa there is no excessive emphasis on formal attire. In many cases, a person is therefore sufficient to be dressed in so-called smart casual. South Africans don’t like to say no. Therefore, sometimes they can promise follow-up negotiations and then not hear back, create unrealistic expectations in the business partner, etc. It is therefore necessary to take the results of business negotiations realistically and verify the results of the meeting with a subsequent phone call or email. In the public sector, the degree of reliability of partners is usually lower, and it is therefore advisable to arrange negotiations with the public sector through the representative office of the Czech Republic in Pretoria. Gifts are not customary, but they are sure to please. Alcohol, especially famous South African wine, is commonly consumed during meetings in restaurants. However, the consumption of alcohol must of course be avoided, if your partner is a follower of the Muslim minority. Although South Africa consists of nine provinces, no fundamental cultural, ethnic or religious differences can be observed in this regard.

Communication

South Africa has 11 official languages, but for normal communication and contact with the authorities, you only need English, which applies without exception to all business negotiations. If you want to surprise a business partner, then a few phrases from Afrikaans or one of the original languages ​​can refresh business negotiations. As mentioned above, e-mail communication is a common basis for any information exchange. A very effective and widespread phenomenon of JAR WhatsApp, which in many cases replaces and speeds up e-mail communication. It is not possible to talk about explicit thematic taboos in South Africa, but it is recommended to avoid the topic of apartheid or racial issues in general. Visit Allunitconverters for more information about South Africa culture and traditions.

Recommendation

South Africans are noticeably warmer and friendlier than us Czechs. In this regard, it is good to emphasize so-called small talk, i.e. to devote the initial part of the meeting to getting to know each other and not be so surprised when South Africans ask you how you are or what you like to do. It is advisable to repeat the questions asked. When negotiating about the business itself, try not to put the other party in the position of a passive listener, and rather conduct the negotiations in an interactive spirit and do not be afraid to joke, and keep in mind that arrogance and impatience will not achieve anything in JAR.

Public Holidays

Overview of public holidays:

  • January 1 – New Year’s Day
  • March 21 – Human Rights Day
  • Good Friday
  • Easter Monday (Family Day)
  • April 27 – Freedom Day
  • May 1 – Workers Day
  • June 16 – Youth Day
  • August 9 – National Womens Day
  • September 24 – Heritage Day
  • December 16 – Day of Reconciliation
  • December 25 – Christmas Day
  • December 26 – Day of Goodwill

If a public holiday falls on a Sunday, the following Monday is a day off. Usual working hours are from 8.00 to 16.00/17.00 with a break for lunch. Shops are usually open from 9:00 a.m. to 6:00 p.m. On weekends, most shops have limited opening hours, and on Sundays they are mostly closed, with the exception of shopping centers. There is a ban on the sale of alcohol in supermarkets on Sundays after 2:00 p.m. Banks are open on weekdays from 9:00 a.m. to 4:00 p.m., and on Saturdays usually until 11:00 a.m.

South Africa Culture of Business