MT business travel: Why do business in ... Johannesburg

Johannesburg isn't nicknamed 'eGoli' ('Gold') for nothing. Although the mining sector now contributes only about 10% of the city's wealth, it is still very much a mining town: fast, cosmopolitan, edgy and exciting. It's the destination of choice for corporations looking to establish a sub-Saharan HQ. An inner-city revitalisation programme helped push up central business district office rentals by 30% in 2007. It's home to more than 3.5 million people.

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Last Updated: 09 Oct 2013

WHY YOU SHOULD

The 2007 Customer Satisfaction Survey by the Bureau of Market Research, University of South Africa, showed an increase of 6 index points in business confidence in the city, taking it from 58 to 64.

Johannesburg (usually just Joburg or Jozi) contributes 17%-plus to the country's GDP, with R120bn (£8.3bn). Its drive to halt urban decay means that any taxpaying, property-owning individual or entity can claim tax benefits under Urban Development Zone incentives.

The Big Four national banks - Absa, FirstRand, Nedcor and Standard Bank - are headquartered in Johannesburg. Between them, they own 70% of the total assets of the sector, estimated at more than R2,156bn (£149bn). There are a dozen or more branches of foreign banks and financial and business services employ 22% of the workforce and tend to take the cream of the employment pool. But the fast-growing sector is manufacturing, the gross annual output of which is more than R50bn in the province of Gauteng, employing 20% of the city workforce.

For business in the rest of Africa, Joburg's OR Tambo International is the continent's best airport, handling 22 million passengers annually.

WHY YOU SHOULDN'T

Johannesburg averages 12 hours of sunlight a day, but with rolling power cuts from public utility firm Eskom, you're still potentially in the dark for half the time. State-owned Telkom has kept the costs of telecoms high and slowed the delivery of broadband, a major peeve of the media companies. A second operator is in the wings but has been delayed by bureaucratic wrangling.

Poor public transport means you have to own a car - making you a potential carjack victim. Most carjackings take place in wealthier suburbs, and burglaries are rising. Violent crime has fallen from its 1990s peak, but levels are still high. The need for barred windows and private security guards can be a shock for newcomers.

Rentals in desirable areas such as Melrose Arch are high: two and three-bedroom units go for as much as R40,000 (£2,770) per month. You can buy a 16,000 sq m home on Coronation Road, Sandhurst, with eight en suite bedrooms, a tennis court, pool and pavilion, for R105m (£7.3m). A detached three-bed house in a good suburb costs about R4m (£275,000). Prime mortgage rates run at about 14.5%.

Government regulation around tax and labour laws, especially for smaller enterprises, is excessive. And then there is affirmative action, or Black Economic Empowerment compliance. The codes of good practice for Broad-Based Black Economic Empowerment are not enforced in the private sector, but they will be among state-owned and public companies. If you don't comply, you could handicap yourself.

IN CONCLUSION

Johannesburg is a vibrant city, populated by sub-Saharan entrepreneurs and refugees, a sprinkling of European and US expats, merchants from the Indian subcontinent, and Asian traders, plus the locals - a mix of cultures, generations, political bents and global aspirations. The place has wealth, and the people like to show it. And if you can handle the traffic congestion and work on a mobile, this is the place to be. In its survey of the world's expensive cities, Swiss bank UBS ranked Johannesburg at 51. (London was 1st, Mumbai 58th and Nairobi 63rd.) But it's not just the price of a beer that makes the difference.

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