Class XVI international seminar trip Reports February 15-27, 2014

South Africa has long depended on the mining industry as a driver for economic growth since the discovery of diamonds in 1867 and the discovery of gold a few years later marking the beginning of a large and diverse mining industry. South Africa mining industry accounts for only 18 percent of GDP but accounts for more than 60 percent of exports and employees almost 600,000 people. South Africa’s mining industry accounts for 77 percent of the world’s platinum production and the world’s third largest coal exporter. South Africa also produces large quantities of kyanite (used in ceramic products) and other materials, chromium, palladium (mostly used in catalytic converters), vermiculite (used for parts in aluminum smelting because its ability to standup to high temps), vanadium (mostly used as a steel additive), zirconium (mainly used in the production of opacifier’s), manganese (mainly used in stainless steel production), rutile (used in coloring paints and pigments), ilmenite (used in coloring paints and pigments), gold, and fluorspar (used as a flux for smelting).

Agriculture is a major part of the South African economy accounting for about 10 percent of employment and 2.6 percent of GDP. However, agriculture accounts for less of South Africa’s economy than other Africa nations. This is substantial considering that only 13 percent of South Africa’s land area is considered arable. The main constraint on the agricultural industry in South Africa is a lack of water. South Africa has a very diverse agricultural industry ranging from high intensive crop production in areas with abundant rain fall and sheep herding in arid regions. Corn is the number one crop but South Africa produces many other agricultural commodities including poultry, beef cattle, wheat, milk, fruit, vegetables, and sugar cane. With this wide variety of agricultural production South Africa is not self-sufficient in the production of most staple crops. However, South Africa exports many crops, such as pineapple, and is able to export more crops then it needs to import. One aspect of agriculture that is sometimes overlooked, but South Africa is uniquely suited for, is game farming. South Africa has a wider variety of game species than many countries. Another growing agricultural industry in South Africa is aquaculture. Some of the species grown are mussels, trout, tilapia, catfish, oysters, and waterblommetjies (which is a flowering watering plant). South Africa also leads the world in ostrich products with 65% of world sales including leather, meat and feathers. Farmers in South Africa take advantage of a large number of agricultural cooperatives to help improve competiveness.

South Africa manufacturing industry is a major contributor to the South African economy providing 13 percent of the jobs and 15 percent of GDP. The manufacturing industry has an advantage in the fact that labor costs are low but not as low as other comparable markets. The cost for transportation and general living also negatively impacts South Africa’s ability to compete in the global manufacturing industry. One of South Africa’s most important manufacturing sectors is the automotive assembly. The automotive industry accounts for about 10 percent of South Africa’s manufacturing exports. South Africa’s automotive manufacturing assembles vehicles and parts for local markets and other important markets in Africa. Despite their distance from major markets they are able to produce quality products that are price competitive with other assembly centers. South Africa is working to grow their automotive vehicle and part assemble sector. They already have production plants for BMW, Ford, Volkswagen, Daimler-Chrysler and Toyota along with many vehicle parts manufactures. The South African automotive industry produces about half a million vehicles annually and employees over 30,000 people. South Africa other major manufacturing industry are agri-processing, chemical manufacturing, ICT and electronics, metals, textiles clothing, and footwear.

South Africa’s tourism sector consists of several key areas of adventure and exploration, culture and heritage, safari and nature, entertainment and lifestyle, and relaxation. South Africa has over 860,000 visitors monthly of which 210,000 are from outside Africa. Tourism is a major contributor to the South African economy supporting 10 percent of jobs and adding $102 billion to the economy. In South Africa, the tourist industry is targeted as one of the key industry to help to drive the economy for the next two decades. In the past, the majority of businesses catering to tourism were owned by the white minority. In recent years, the government has started to support programs that support and promote the growth of black owned tourism enterprises. Their main efforts have been aimed at growing these businesses on the small scale.

The exchange rate to Rands, the South African currency, is about 10 rand or zar to the dollar. It is very easy to exchange money. Exchanges can be done at the airport and in most of the larger cities in South Africa. However, the best way to make the exchange is to do it at your local bank to receive the best rate of exchange. Money should only be exchange with reputable vendors. Exchanging money on the street in most cases is illegal and not worth the risk of getting robbed. It is also a good idea to contact you credit card company to inform them that you will be traveling to South Africa. This will insure that they do not stop payment making your card unusable in an effort to stop fraud. Visa and Master Card are the most accepted cards; however, credit cards should not be solely relied upon because they may not be excepted everywhere. There will also be opportunities to use ATMs in the large cities for a fee that will vary depending on the bank. Traveler checks in US Dollars are accepted in Africa and can be replaced if stolen but to cash them you have to find a bank that is willing to take them. Cash should always be carried and US Dollars may be accepted in some places. However, some places that take US dollars they will only accept ones printed after 2003 because they are harder to counterfeit. Money belts are the safest way to carry money but also a bag or wallet is useful for carrying money you will spend that day and are easily given up if robbed.

Economic overview

http://en.wikipedia.org/wiki/South_Africa#Economy

http://en.wikipedia.org/wiki/Economy_of_South_Africa

http://www.southafrica.info/business/economy/sectors/agricultural-sector.htm#.UrjehjOx7I

http://www.southafrica.net/country/us/en/

http://www.arc.agric.za/Pages/Home.aspx

http://goafrica.about.com/od/africatraveltips/a/money.htm

Non Internet

GeoJouranl. Transforming the South African tourism industry

There are a few key pieces of information we should grasp before looking at the two specific areas. The current government, known as the African National Congress (ANC), is generally understood to represent the Black majority. Agricultural activities range from intensive crop production, fruit production and mixed farming to cattle-ranching and sheep-farming. Only about 12 percent of the surface area of the country can be used for crop production. In 2012 the population was 51 million and GDP was $384.3 billion with a growth in GDP of 2.5 percent. GDP is still recovering from the crash in 2009. Inflation was 5.4 percent in 2012 compared to one percent in the US.

One of the most controversial issues within the country, especially with farmers, is that of land redistribution. The apartheid system began about 100 years ago. Apartheid by definition is a “segregated political system.” It was in place from 1948 through 1994. With the passage of the Native Land Act in June 1913, atrocities against South Africa’s native population were legalized. In the land reserved for blacks, various tribal groups were forcibly settled in a segregated area. Many times they were used as labor with little or no pay. It was similar to the share cropping experience of Black Americans just after slaves were freed.

South Africa has long been characterized as an economy that has built a comparative advantage in resource based products. While South Africa has significant cost advantages in many products, they are generally also characterized by large scale economies which mean high levels of concentration and market power. This is especially true given their transportation costs and lack of regional competition. This is not a bad thing, although it is often characterized that way.

To get the most from our visit, we must understand the cultural differences and how they impact the workforce. Because agriculture is disproportionately land based, we must understand land redistribution in order to see the potential impact. And finally, we must see the obstacles to development. As I researched this paper I found that we will be visiting an incredibly interesting country with a corrupt and crime laden government.

Now US Citizen farming in SW Kansas

Personal Interview – Mathew Johnson, Seaboard Farms

Frequent South African Travel and Business

Rebranding the Democratic Alliance, Mail and Guardian, Series 2, April 23, 2013,

2013/2014 Budget Speech, President Jacob Zum




Transportation, Communications and Infrastructure
Jamie Doyal

Steve Alspach

Casey Sharber


South Africa

Transportation, Communications, and Infrastructure

Steve Alspach, Jamie Doyal, Casey Sharber
Transport Infrastructure of South Africa

This report will focus on the infrastructure in place throughout South Africa that is used to transport the diverse agricultural commodities produced in the country. It will focus on 4 primary modes of transport 1) Rail, 2) Roads, 3) Shipping and 4) Air transport.

South Africa is populated by approximately 51.2 million people (approx. 110/sq. mi.) while the states of Texas, California and Pennsylvania have approximately 77 million people (approx.. 160/sq. mi.).

The first rail line in South Africa was completed in 1860 so the rail industry there lagged behind the industry in the United States by about 30 years. There are approximately 12,000 miles of track in the South African rail system. Tracks stretch over nearly the entire country but the highest concentration of lines are around the Johannesburg and Pretoria area found in the northeastern part of the country. The transport system is government owned and is operated by a government owned corporation called Transnet. The rail system is operated by a division of Transnet called Transnet Freight Rail. Freight shipping on the rail system is somewhat limited by the fact that the majority of the rail lines are constructed of narrow gauge track. Narrow gauge track is 14.5 inches narrower than standard gauge which reduces its’ usefulness for hauling freight. The current capacity for rail freight is approximately 200 million tons per year. This accounts for approximately 12 percent of the freight moved in South Africa. In 2012, South African President Zuma announced a major capital investment plan designed to increase the freight rail capacity to 350 million tons per year. The plan is designed to reduce the cost of doing business within the country and to create jobs. Commuter traffic is a very large portion of the rail system in South Africa. Approximately 2.2 million people per day travel by rail within its’ borders. There is only one high speed train, the Gautrain, servicing Johannesburg, Pretoria and Tambo International Airport. Approximately 40,000 people use this service daily.