Class XVI international seminar trip Reports February 15-27, 2014
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- South Africa and Oklahoma Comparisons
- Exchanging American Currency or Travelers Checks for South African Currency
- Credit Card Purchases
- Spending Money Needed
- Works Cited
South Africa. Revenue Service. South African Trade Statistics for December 2012. Pretoria: SARS, 2013. Print. South Africa Research Topics Rusty Roush This section examines various topics loosely relating to economics that will be practical for us as we embark on our trip to South Africa. These topics include a quick comparison of South Africa to our home state of Oklahoma, information about exchanging U.S. currency or checks for South African Currency, making purchases with a credit cards, value added tax, and information on spending money needs. South Africa and Oklahoma Comparisons Below in figure 1 is a chart comparing Oklahoma to South Africa. Keep in mind, South Africa is over 6 1/2 times the size of Oklahoma (see figure 2 below for a visual representation) and has over 13 times the population. Interestingly, a higher percentage of the land in Oklahoma is used for agriculture while a higher percentage of the population in South Africa is involved in Agriculture to earn a living. South Africa produces much more corn and soybeans than the state of Oklahoma, but Oklahoma produces much more wheat and slightly more canola. South Africa produces fifteen times the amount of red meat of that produced in Oklahoma. As you can see, South Africa's GDP outpaces that of Oklahoma by almost 2 1/2 times, but by calculating per capita GDP Oklahoma you see that Oklahoma's GDP on an individual basis is over 5 1/2 times that of South Africa. (USDA-NASS, World DataBank) 
Land Size Comparison South Africa Comparison Chart (USDA-NASS, World DataBank) Exchanging American Currency or Travelers' Checks for South African Currency The currency exchange rate as of 12/12/2013 is .0962 dollars for 1 Rand or 10.3959 Rand for 1 dollar. This is as inexpensive as the Rand has been since 2009. It reached a high of around .15 in 2011 and has been steadily decreasing ever since. Although there are other factors that impact the price of goods and services, the fact that the Rand has been decreasing in value makes for a more favorable exchange, and will allow for greater purchasing power while on our trip to South Africa. Please see figure 3 below for historical prices for the South African Rand. Exchange Rate Chart 
(SouthAfrica.info) South Africa's unit of currency is called the Rand, which is divided into 100 cents. Bills come in denominations of 10, 20, 50, 100 and 200 Rand; and coins come in 5, 10, 20, 50 cents as well as 1, 2 and 5 Rand. There are two 5 Rand coins in circulation, both of which are legal currency. All transactions are rounded down to the nearest 5 cents. (SouthAfrica.info) According to southafrica.info banks are typically open from 8:30am or 9am to 3:30pm on Mondays to Fridays, and 8:30am to 11am on Saturdays. Many banks in larger towns, and especially those in shopping areas, have extended these hours, and some are open on Sundays. Branches at airports adjust their hours to accommodate international flights. Automatic Teller Machines (ATMs) are also prevalent at most branches. ATMs are linked to all major international networks, and it is possible to draw currency from them. They accept Cirrus or Maestro cards as well as all major credit and debit cards. You will not be charged any fees over and above those levied by your own bank. To exchange checks for cash at foreign exchange dealers, you must present a valid passport. Thomas Cook and American Express travelers' checks can be cashed at all banks, bureau de change and at some hotels. According to the foreign travel advice from gov.uk, South Africa has a very high level of crime and crime has increased with the influx of visitors and tourists due to the events resulting from the recent death of former South African president Nelson Mandela. As always you should use caution and be aware of your surrounding when exchanging money or using the ATM. Also, remember that all money transactions that involve foreign exchange must be done by authorized dealers. In terms of exchange control regulations, it is illegal to buy or sell foreign currency to anyone except an authorized dealer. Authorized dealers include the four major credit card companies American Express South Africa, Diners Club South Africa, MasterCard South Africa and Visa South Africa as well as South Africa's four major banks Absa Bank, First National Bank, Nedbank and Standard Bank. For a list of all Department of Finance-authorized foreign exchange dealers in South Africa as well as websites, please see the following Figure 4. Authorized Exchange Dealers and websites (SouthAfrica.info) Credit Card Purchases Most major credit cards can be used in South Africa. MasterCard and Visa are the most widely accepted. Remember to call your bank or Credit Card Company prior to leaving. Notify them of your travels so that once you start using your card in South Africa they will not think the transactions are suspicious and deactivate your card. Also talk to them about charges for using the card abroad. See what fees will apply and inquire about the possibility of avoiding any fees. I called customer service for my MasterCard and was told that no transaction fees would be added to the purchases that I make while in South Africa. (SouthAfrica.info) Taxes All South Africans pay Value Added Tax (VAT) as it included in the price of most goods and services. It is currently set at 14%. Visitors are not exempt from paying it, but if you are a foreign passport holder you can claim it back on the items you are taking out the country if their value is more than 250 Rand. Be sure to request a tax invoice when buying goods. If you do not have a tax invoice, you will not receive a refund. A request for a refund can be made at the VAT refund office in the airport upon departure from South Africa. Your refund will be given as either a Rand check or a Visa cash card also in Rand. (SouthAfrica.info) Spending Money Needed To gage how much spending money to bring on our trip to South Africa you must first examine several factors. First of all the exchange rate is somewhat favorable so most purchases will be less expensive than in the United States. Secondly, you must examine the types and frequency of purchases you will be making in South Africa. For this take a look at the itinerary for our trip. Of course all hotel expenses will be taken care of by OALP. The itinerary states that some meals will also be included in our package, however, according to my count we will be responsible for 11 meals. Entrance fees such as Kruger National Park will be taken care of by OALP. You will need to bring money for tips for bus drivers, tour guides, bell hops, and housekeeping. The recommended tip for couch tour guides and bus drivers is usually 10 Rand per person on a day tour and 15 Rand per person per day on overland and local coach tours. The money is split between the tourist guide and the driver. For private tours, 50 Rand per person per half-day tour and 80 Rand per person per day for a full-day tour is the norm. At hotels it is customary to leave 50 Rand per person per day for housekeeping. If a porter assists with your bags, it's normal to tip the porter 15 Rand per movement, assuming about two normal-size bags per person. (South Africa: Tipping & Etiquette) Also, any transportation and entertainment outside of the scheduled events are expenses you are likely to incur at some point during or trip so plan accordingly. Lastly, think about money for any souvenirs you plan to buy and other potential shopping you may do while on our journey. Below in Figure 5 is a list of typical expenditures and their median amounts in both Rand and U.S. Dollar. Examples of the Cost of Common Purchases (Cost of Living) Works Cited: USDA-NASS, Oklahoma Field Office, comp. "Oklahoma Agricultural Statistics 2013."Oklahoma Agricultural Statistics 2013 (2013): 1-75. Print "SouthAfrica.info." Banks and Foreign Exchange in SA. Web. 11 Dec. 2013. 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