Doing Business in South Africa

Are you currently doing business in South Africa, or are you planning to in the near future? Consider this…

  • Twenty-five languages are spoken in South Africa, and the country has eleven official languages: Afrikaans, English, Ndebele, Northern Sotho, Sotho, Swazi, Tswana, Tsonga, Venda, Xhosa, and Zulu. Most South Africans of European origin speak Afrikaans, with Zulu and Xhosa the more widely spoken languages for native South Africans. Almost 57 percent of South Africans speak some English as a second language.
  • South Africa consists of diverse ethnic groups: 79.4 percent black African, 9.2 percent white, 8.8 percent coloured (a mixed-race group of white, Khoi, San, Griqua, Chinese, and Malay who were originally brought in by the Dutch and speak Afrikaans), and 2.6 percent Indian or Asian. Black Africans are further divided into a variety of ethnic groups speaking different Bantu languages; including Zulu and Xhosa, nine of these are official national languages.
  • South Africa has the largest economy on the African continent and the twenty-eighth largest in the world. The country is ranked as an upper-middle-income economy by the World Bank, making it one of only four upper-middle-income economies on the Africa continent. (The others are Botswana, Gabon, and Mauritius.)
  • The major industries of South Africa include mining, automobile assembly, metalworking, machinery, textiles, iron and steel, chemical production, fertilizer production, foodstuffs, and commercial ship repair. The country is the world’s largest producer of chromium, manganese, platinum, and gold as well as the world’s third-largest coal exporter. In addition, South Africa is one of the world’s top five producers of chicory roots, grapefruits, and cereals.

With a diverse culture influenced by various ethnic groups in combination with strong economic power, South Africa is attractive to foreign businesses. However, South Africa has many social and cultural differences when compared to the United States. Here are some tips for successful business relationships!

Important tips

  • Even though apartheid (a racial segregation involving political, economic, and legal discrimination against non-whites) ended in 1993, remnants of its hierarchy still exist in business, government, and other sectors.
  • With the exception of whites speaking English as their mother tongue, South Africa is a patriarchal society. Many husbands consider housework to be their wives’ domain. Sometimes, foreign businesswomen are referred to as “girls.”
  • There are various greeting styles in South Africa based on ethnic groups, but the most common way to greet a business contact is by shaking hands. However, because some women do not shake hands with men, you should wait until a South African woman extends her hand first.
  • Address people using their title in a business setting. Only close friends or family members call each other by their first names.
  • Do not give a gift to someone before you have established a personal relationship. Otherwise such gifts may be considered a bribe. In addition, South Africans of Chinese descent usually decline gifts three times before accepting because they consider it avaricious to take a present the first time it is offered. Keep asking them to accept the gift.
  • Feet are considered an unclean part of the body, so don’t touch anything with your feet. In addition, the left hand is considered unclean among Hindus and Muslims. Don’t touch people or anything with your left hand.
  • In South Africa “café” means a convenience store. These stores are open seven days a week and sell almost everything except alcohol.
  • When you travel in South Africa, be aware of potential dangers: townships or poor areas known locally for violence and crimes; the bush which is home to potentially dangerous wildlife; poisonous snakes and insects that have been known to cause disease and/or death; overexposure to the sun.
  • South Africa has the world’s top HIV infection and death rates. At least 5 million people are infected with HIV, and more than 1 million people have died of AIDS.
  • South Africa’s unemployment rate is at 25 percent.

Appointments

  • Appointments should always be made ahead of time.
  • When going to a business meeting, be on time but prepared to wait patiently.
  • If you are invited to a social event, ask what time you are expected to show up. Do not be more than half an hour late.
  • Because of hot temperatures, South Africans start their workday before 8:00 a.m. In addition, since South Africa has such great weather for outdoor sports, few people work weekends.

Negotiations

  • Most South African businesspeople are from English- or Afrikaans-speaking groups. They pursue “win-win situations” in which each party gets something out of a deal.
  • Usually white South Africans prefer to discuss business topics without small talk. However, other ethnic groups spend more time getting to know their potential business partners.
  • South Africans might cancel deals if you put too much pressure on them or rush them. Do not show your frustration if putting together a deal takes time.
  • Usually white South Africans’ ancestors were miners or farmers. However, many Indian and Chinese people came to South Africa as merchants and some still work in trade and thus Indian and Chinese businesspeople can be more aggressive in deal-making.

Entertaining

  • Business lunches and dinners are commonly at restaurants. However, executive levels might talk business at an early morning at tee time when they play golf.
  • South Africans enjoy entertaining in their homes and ask others to drop by anytime. However, check a host’s availability by phone before you visit. South Africans prefer to gather with their own ethnic groups. They like to have barbecues, braais (Afrikaans for “grilled meat”), around the pool.
  • Always prepare a gift when you are invited to a South African’s home. Candy, flowers, and wine are usual gifts.
  • Don’t discuss business when you are invited to someone’s home. However, it can still be a good opportunity to develop professional relationships.

 

Morrison, Terri, and Wayne A. Conaway (2006). Kiss, Bow, or Shake Hands, 2nd edition. Massachusetts: Adams Media Corporation.



 
 

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