South African dominance slipping.

Author:Ford, Neil
Position:Africa's Top 200 companies
 
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Most readers would guess that South African companies would dominate our table of the Top 200 companies in Africa. With the biggest economy and some firms of global standing in their respective fields, this is hardly surprising.

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Yet there are some real signs of progress in the rest of the continent, as Nigeria's much vaunted banking reforms push its financial services companies up our table and steady growth in North Africa allows Egyptian and Moroccan firms to break the South African monopoly at the top.

As far as the top of the table is concerned, South Africa's mining giants remain in charge, as rising global demand for all major commodities continues to push up prices. In particular, China's well documented economic boom is soaking up an increasing proportion of the South African mining industry.

However, the picture is somewhat convoluted in African terms by the strong South African presence of companies that are dually listed in London or elsewhere in the world, plus their complicated corporate structure.

As a result, we have decided to include Anglo American plc in our survey but have excluded BHP Billiton, which is listed both in the UK and in Australia as well as South Africa. Were BHP Billiton to be included, however, then it would vie with Anglo American plc for the title of the biggest company operating in Africa. Both firms, plus Anglo American Platinum have strong roots in South Africa and comprise a large proportion of the country's GDP, but as last year it is Anglo American plc that heads our table with market capitalisation of $77.8bn.

However, South African mining stocks have suffered in recent weeks because of the severe power supply crisis. Despite pleas from power utility Eskom for more money to build new power plants over the past few years, Pretoria consistently reined in the company's demands.

Now, however, the government has admitted that it was wrong to deny funding as severe power cuts have affected most areas of the national economy and also neighbouring states that rely on exported electricity from Eskom.

Many mines were closed for a time in January and the main mining corporations have been forced to reduce output for the foreseeable future. Mothballed coal-fired facilities are being brought back on stream and new gas fired plants are being developed on the coast but it seems likely that supply problems will continue for several years yet.

Index dragged down by falling mining shares

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