South Africa 5 years on

Given where it was coming from - years of apartheid - I always felt that you needed to cut South Africa some slack in terms of its development goals. Now, having just been there again it's really struck me how much has developed in even the last 5 years since I wrote this post.

Traffic used to be a word you barely ever heard in South Africa - such great roads and so few people who could afford cars but now Johannesburg is packed with cars. Buildings are going up everywhere, smart office buildings and business parks stretch from Sandton through Four Ways and up to Mid Rand - the economy and the stock markets are booming.


South Africa has always had extremely strong mining companies and in recent years SAB has become a global force in brewing. But there are several really strong businesses being grown from Joburg now, including two of Africa's largest cell phone operators - Vodacom and MTN - and several very strong banks including ABSA (recently acquired by Barclays for £3bn) and Standard Bank. Investec has been a phenomenal success story in the last 5 years as well.

There are great retail businesses like Truworths, Pick'n'Pay and Nandos has taken its brand of fast-casual food global. In technology great businesses have been built like Dimension Data, Thawte (bought by Verisign) and now Mark Shuttleworth and Ubuntu are making major waves in the open source community.

There has been a lot of talent which has left South Africa and been instrumental in building some great businesses Web businesses like Elon Musk (PayPal) and Roelof Botha (PayPal, YouTube). Douglas at Extate has started his business in the UK but has produced a South African version as well. Many have stayed (or left roots behind) and are building important projects and some great businesses. There is a thriving Internet scene in South Africa - in fact today marks Cape Town's first OpenCoffee Club meeting.

One of South Africa's hidden jewels is also Naspers. This is probably one of the most interesting media companies on the planet right now, not just because of how much they are dominating their home markets but mainly because of their strategy which drives a super imaginative and shrewd approach to investing in the Internet. This company most people have never heard of are quietly building a portfolio of some of the most incredible Internet assets in emerging markets including 36% of Tencent (QQ is a phenomenon) and a recent acquisition of 30% of Mail.ru.

China and Russia - as well as Africa - are markets experiencing hypergrowth. For all our railing on Africa, there are a million new cellphone customer signing up a week. Europe is often a strange, strange land to US companies and investing outside the mainstream in emerging markets is even scarier but going to places, off the beaten track, but where there is high growth is great strategy.


South Africa is hosting the World Cup in 2010 - not 5 years this time to wait, but its going to fascinating to see the growth between now and then and also perhaps the realization in the rest of the world that Africa, and South Africa, is more than just rugby, cricket, amazing nature and wildlife, but is starting to produce some economic world champions as well.