SOUTH AFRICA
Since April 2006
Since April 2021
Since April 2021
Pillar Foreign Direct Investment (FDI) in sectors relevant to digital trade |
Indicator Maximum foreign equity share
Electronic Communications Act No. 36 of 2005
Digital Sound Broadcasting Services Regulation, 2021
Digital Sound Broadcasting Services Regulation, 2021
According to Art. 64.1 of the Electronic Communications Act, South Africa has imposed restrictions on foreign control of commercial broadcasting services. A foreign entity is prohibited from directly or indirectly exercising control over a commercial broadcasting licensee or holding a financial interest, or any interest in voting shares or paid-up capital, in a commercial broadcasting licensee exceeding 20%.
As defined in Art. 1 of the Act, "broadcasting" refers to any form of unidirectional electronic communication intended for reception by: (a) the public; (b) sections of the public; or (c) subscribers to any broadcasting service. This communication may be conveyed by means of radio frequency spectrum, any electronic communications network, or a combination.
Furthermore, under Art. 4 of the Digital Sound Broadcasting Services Regulation, existing sound broadcasting service licensees are permitted to simulcast their current sound broadcasting programme(s) on both analogue and digital platforms.
As defined in Art. 1 of the Act, "broadcasting" refers to any form of unidirectional electronic communication intended for reception by: (a) the public; (b) sections of the public; or (c) subscribers to any broadcasting service. This communication may be conveyed by means of radio frequency spectrum, any electronic communications network, or a combination.
Furthermore, under Art. 4 of the Digital Sound Broadcasting Services Regulation, existing sound broadcasting service licensees are permitted to simulcast their current sound broadcasting programme(s) on both analogue and digital platforms.
Coverage Broadcasting sector
Sources
- https://web.archive.org/web/20220727123819/https://www.gov.za/sites/default/files/gcis_document/201409/a36-050.pdf
- https://web.archive.org/web/20231001215855/https://www.gov.za/sites/default/files/gcis_document/202104/44469gen215.pdf
- https://web.archive.org/web/20231031093938/https://www.state.gov/reports/2022-investment-climate-statements/south-africa/
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SOUTH AFRICA
Since January 2008
Pillar Foreign Direct Investment (FDI) in sectors relevant to digital trade |
Indicator Maximum foreign equity share
Broadband Infraco Act No. 33 of 2007
The State of South Africa exclusively owns Broadband Infraco, a state-licensed telecommunications company. The State is the only shareholder and member of Infraco, as stipulated in Art. 3 of the Broadband Infraco Act No. 33 of 2007. As a result, the Minister has the power to act on behalf of the State and exercise all the rights and benefits associated with Infraco's ownership, including shareholder and membership rights, to the exclusion of other stakeholders.
Coverage Telecommunications sector
SOUTH AFRICA
Since April 2006
Since April 2021
Since April 2021
Pillar Foreign Direct Investment (FDI) in sectors relevant to digital trade |
Indicator Nationality/residency requirement for directors or managers
Electronic Communications Act No. 36 of 2005
Digital Sound Broadcasting Services Regulation, 2021
Digital Sound Broadcasting Services Regulation, 2021
According to Art. 64.2 of the Electronic Communications Act, not more than 20% of the directors of a commercial broadcasting licensee may be foreigners. Additionally, according to Art. 4 of the Digital Sound Broadcasting Services Regulation, existing sound broadcasting service licensees may simulcast their existing sound broadcasting programme(s) on analogue and digital platforms.
Coverage Broadcasting services online
SOUTH AFRICA
Since December 1998
Since February 2019
Since February 2019
Pillar Foreign Direct Investment (FDI) in sectors relevant to digital trade |
Indicator Screening of investment and acquisitions
Competition Act No. 89 of 1998
Competition Amendment Act No. 18 of 2018
Competition Amendment Act No. 18 of 2018
It is reported that merger and acquisition-related FDI is scrutinised closely for its impact on jobs and local industry. Sections 13-14 of the Competition Act of 1998 set out the approval mechanism for mergers. In addition, Section 14 of the Competition Amendment Act of 2018 amends Section 18A of the Competition Act, adding a screening in case the implementation of a merger involving a foreign acquiring firm may have an adverse effect on the national security interests of the Republic. National security interests are defined broadly, including "critical infrastructure" sectors.
Coverage Horizontal
Sources
- https://web.archive.org/web/20231003075342/https://www.gov.za/sites/default/files/gcis_document/201409/a89-98.pdf
- https://web.archive.org/web/20221007014724/https://www.gov.za/documents/competition-amendment-act-18-2018-englishafrikaans-14-feb-2019-0000
- https://sim.oecd.org/Simulator.ashx?lang=En&ds=STRI&d1c=tc&d2c=zaf
- https://web.archive.org/web/20230321132129/https://www.gov.za/documents/protection-investment-act-22-2015-15-dec-2015-0000
- https://web.archive.org/web/20230919071254/https://ustr.gov/sites/default/files/2022%20National%20Trade%20Estimate%20Report%20on%20Foreign%20Trade%20Barriers.pdf
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SOUTH AFRICA
Since April 2009
Pillar Foreign Direct Investment (FDI) in sectors relevant to digital trade |
Indicator Commercial presence requirement for digital services providers
Companies Act No. 71 of 2008
According to Art. 23.1 of the Companies Act, any external company, defined in the law as an entity incorporated outside the country conducting business within South Africa, must register with the Commission within 20 business days after it begins to conduct business in the country. Additionally, according to Art. 23.3 of the law, each company must maintain at least one office in the Republic and register the address of its office or its principal office if it has more than one office. A company falls under the definition of "external company" when holding a meeting or meetings of the shareholders or board of the foreign company or otherwise conducting the internal affairs of the company; establishing or maintaining any bank or other financial accounts; establishing or maintaining offices or agencies for the transfer, exchange or registration of the foreign company’s securities; creating or acquiring any debts, mortgages or security interests in any property; securing or collecting any debt, or enforcing any mortgage or security interest; acquiring any interest in any property; and entering into contracts of employment.
Coverage Horizontal
Sources
- https://web.archive.org/web/20231012185459/https://www.gov.za/sites/default/files/gcis_document/201409/321214210.pdf
- https://sim.oecd.org/Simulator.ashx?lang=En&ds=STRI&d1c=tc&d2c=zaf
- https://web.archive.org/web/20180218191234/http://www.cipc.co.za/index.php/register-your-business/companies/register-external-foreign-company/register-external-company/
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SOUTH AFRICA
ITA signatory?
I
II
Pillar Tariffs and trade defence measures applied on ICT goods |
Indicator Effective tariff rate on ICT goods (applied weighted average)
Effective tariff rate to ICT goods (applied weighted average)
1.58%
Coverage rate of zero-tariffs on ICT goods (%)
74.97%
Coverage: ICT goods
Sources
- http://wits.worldbank.org/WITS/
- https://www.wto.org/english/news_e/brief_ita_e.htm#:~:text=ITA%20participants%3A%20Australia%3B%20Bahrain%3B,%3B%20Jordan%3B%20Korea%2C%20Rep.
- https://www.wto.org/english/res_e/booksp_e/ita20years_2017_full_e.pdf
- https://web.archive.org/web/20220120054410/https://trade.ec.europa.eu/doclib/docs/2016/april/tradoc_154430.pdf
- https://www.wto.org/english/tratop_e/inftec_e/itscheds_e.htm
SOUTH AFRICA
N/A
Pillar Tariffs and trade defence measures applied on ICT goods |
Indicator Participation in the WTO Information Technology Agreement (ITA) and 2015 expansion (ITA II)
Lack of participation in the Information Technology Agreement (ITA) and in ITA Expansion Agreement (ITA II)
South Africa is not a signatory of the 1996 World Trade Organization (WTO) Information Technology Agreement (ITA) nor the 2015 expansion (ITA II).
Coverage ICT goods
Sources
- https://www.wto.org/english/news_e/brief_ita_e.htm#:~:text=ITA%20participants%3A%20Australia%3B%20Bahrain%3B,%3B%20Jordan%3B%20Korea%2C%20Rep.
- https://www.wto.org/english/res_e/booksp_e/ita20years_2017_full_e.pdf
- https://web.archive.org/web/20220120054410/https://trade.ec.europa.eu/doclib/docs/2016/april/tradoc_154430.pdf
- https://www.wto.org/english/tratop_e/inftec_e/itscheds_e.htm
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SOUTH AFRICA
Since August 2006
Pillar Public procurement of ICT goods and online services |
Indicator Surrender of patents, source code or trade secrets to win public tenders/Restrictions on technology standards for public tenders
Policy on Free and Open Source Software (FOSS) Use for South African Government
Section 2 of the Policy on Free and Open Source Software (FOSS) Use for the South African Government, published by the Department of Public Service & Administration, mandates that the government prioritise FOSS over proprietary software unless the latter is demonstrably superior. When FOSS and proprietary software offer comparable benefits, FOSS must be chosen for new projects, and any decision to use proprietary software requires justification. Additionally, the policy requires the migration of existing proprietary software to FOSS, where equivalent alternatives exist. Furthermore, all new software developed for or by the government must adhere to open standards, follow FOSS principles, and be licensed under FOSS whenever feasible.
Coverage Software
SOUTH AFRICA
Reported in 2003, last reported in 2023
Pillar Public procurement of ICT goods and online services |
Indicator Other limitations on foreign participation in public procurement
Local agent requirement for tenders
It is reported that foreign firms can only bid through a local agent.
Coverage Horizontal
SOUTH AFRICA
Reported in 2013, last reported in 2023
Pillar Public procurement of ICT goods and online services |
Indicator Other limitations on foreign participation in public procurement
Local content requirement for tenders
The National Industrial Participation (NIP) programme, approved by Cabinet in September 1996, mandates that suppliers providing goods and services to the government with an import content of USD 10 million or more must engage in domestic economic activities. Specifically, the supplier is required to participate in activities amounting to at least 30% of the import content of the total goods or services purchased under the government contract. These activities should align with key objectives of the NIP, such as increasing production capacity, promoting exports, collaborating on research and development (R&D), and facilitating technology transfer and acquisition. While the NIP programme stems from a Cabinet decision, there is no formal legislation or act of parliament regulating it. Further details can be found in the NIP Revised Guidelines 2013.
Coverage Horizontal
SOUTH AFRICA
Since February 2000
Since January 2004
Since November 2022, entry into force in January 2023
Since January 2004
Since November 2022, entry into force in January 2023
Pillar Public procurement of ICT goods and online services |
Indicator Other limitations on foreign participation in public procurement
Preferential Procurement Policy Framework Act of 2000
Broad-Based Black Economic Empowerment (B-BBEE) Act of 2003
Preferential Procurement Regulations, 2022
Broad-Based Black Economic Empowerment (B-BBEE) Act of 2003
Preferential Procurement Regulations, 2022
Section 2 of the Preferential Procurement Policy Framework Act (PPPFA) of 2000 establishes a framework for implementing preferential procurement policies in South Africa. The PPPFA requires government entities to set criteria for evaluating tenders to protect and benefit "persons, or categories of persons, historically disadvantaged by unfair discrimination on the basis of race, gender, or disability".
In order to enforce the PPPFA, the Broad-Based Black Economic Empowerment (B-BBEE) Act was passed in 2003. Under Section 10 of the Act, a certain percentage of government contracts must be awarded to black-owned businesses. However, the exact percentage is not specified in the agreement because it is formula-based. The Act uses a scorecard system to measure the level of black economic empowerment (B-BBEE) of companies. It requires that government institutions give preference to companies with higher B-BBEE scores when awarding contracts.
In 2017, the Minister of Finance introduced more detailed Preferential Procurement Regulations, which include pre-qualification criteria for preferential procurement and specific procurement policies for designated sectors and tenders. However, the Constitutional Court struck down some provisions of these regulations in February 2022. As a result, the government published a new draft of the Preferential Procurement Regulations in November 2022, which came into effect in January 2023. Under the 2022 regulations, preference points continue to be awarded based on the offered price (80 or 90 points out of 100), with additional preference points (20 or 10 points) granted based on the achievement of specific goals set in the tender invitation, rather than solely on the B-BBEE score. These goals include contracting with historically disadvantaged individuals and implementing the Reconstruction and Development Programme (RDP). Furthermore, the 2022 regulations eliminate the use of 'prequalification criteria' in tenders, providing more discretion for state organs in applying their procurement policies. These regulations are placeholders until a new public procurement bill is finalised.
In order to enforce the PPPFA, the Broad-Based Black Economic Empowerment (B-BBEE) Act was passed in 2003. Under Section 10 of the Act, a certain percentage of government contracts must be awarded to black-owned businesses. However, the exact percentage is not specified in the agreement because it is formula-based. The Act uses a scorecard system to measure the level of black economic empowerment (B-BBEE) of companies. It requires that government institutions give preference to companies with higher B-BBEE scores when awarding contracts.
In 2017, the Minister of Finance introduced more detailed Preferential Procurement Regulations, which include pre-qualification criteria for preferential procurement and specific procurement policies for designated sectors and tenders. However, the Constitutional Court struck down some provisions of these regulations in February 2022. As a result, the government published a new draft of the Preferential Procurement Regulations in November 2022, which came into effect in January 2023. Under the 2022 regulations, preference points continue to be awarded based on the offered price (80 or 90 points out of 100), with additional preference points (20 or 10 points) granted based on the achievement of specific goals set in the tender invitation, rather than solely on the B-BBEE score. These goals include contracting with historically disadvantaged individuals and implementing the Reconstruction and Development Programme (RDP). Furthermore, the 2022 regulations eliminate the use of 'prequalification criteria' in tenders, providing more discretion for state organs in applying their procurement policies. These regulations are placeholders until a new public procurement bill is finalised.
Coverage Horizontal
Sources
- https://web.archive.org/web/20240220034819/https://www.gov.za/documents/acts/preferential-procurement-policy-framework-act-5-2000-03-feb-2000
- https://web.archive.org/web/20240311131910/https://www.gov.za/sites/default/files/gcis_document/201409/a53-030.pdf
- https://www.gov.za/sites/default/files/gcis_document/202211/47452gon2721.pdf
- https://www.webberwentzel.com/News/Pages/new-preferential-procurement-regulations-a-placeholder.aspx
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SOUTH AFRICA
Since March 2020
Pillar Public procurement of ICT goods and online services |
Indicator Other limitations on foreign participation in public procurement
Practice Note on Local Content for Electronic and Information Technology Goods
Annex A of the Practice Note on Local Content for Electronic and Information Technology Goods published by the Department of Trade and Industry defines guidelines on local content for electronic and information technology goods in public tenders. The note requires a certain percentage of the value of ICT products to be of local origin. The local content requirement varies depending on the product and can range from 30% to 100%.
Coverage Electronic and information technology goods
SOUTH AFRICA
Reported in 2023
Pillar Public procurement of ICT goods and online services |
Indicator Other limitations on foreign participation in public procurement
Lack of transparency in tenders
It is reported that the Preferential Procurement Regulations have created uncertainty regarding the criteria for identifying "specific previously disadvantaged groups" eligible for preference margins in procurement processes. Although the regulations do not mandate the use of the Broad-Based Black Economic Empowerment Act of 2013, state entities may still consider it alongside other objectives, such as employment equity, green procurement, and local content. While these regulations offer more flexibility, there are ongoing concerns that the allocation of preference points may not be fair, equitable, or transparent.
Coverage Horizontal
ZIMBABWE
N/A
Pillar Online sales and transactions |
Indicator UNCITRAL Model Law on Electronic Signatures
Lack of adoption of UNCITRAL Model Law on Electronic Signatures
Zimbabwe has not adopted national legislation based on or influenced by the United Nations Commission on International Trade Law (UNCITRAL) Model Law on Electronic Signatures.
Coverage Horizontal
