In Western Cape Province, the area around Cape Town, 75,000 copies of the paper are being printed daily. But in five months it will be launched nationally in the Johannesburg and Pretoria provinces with extensive changes for local editions.
The newspaper is called the Daily Voice, but in certain circles it is already being dubbed the Daily Vice — and, despite protests from religious groups, it has its own Page 3 girls.
If South Africa were looking for signals to confirm its economic revival after a decade of democracy and the creation of a new generation of workers, it may have found them in the early success of the Daily Voice and two rival tabloids, Die Son and the Daily Sun.
The company behind the launch of Daily Voice is Independent News & Media (INWS), the £1.2 billion international newspaper group that is already the country’s dominant player with a stable of 16 national titles and 14 local ones. It also publishes GQ, Glamour and Home & Garden under licence.
Gavin O’Reilly, INWS’s chief operating officer, said the paper aims to “attract the lower market consumer who has no experience of reading newspapers but is becoming more economically relevant”.
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In South Africa there is still a huge divide between rich and poor, but a new black middle class is emerging and driving a consumer boom.
INWS has done well from the resurgence of the South African economy. It took a big gamble when it bought a stake in two local newspaper groups a year before apartheid ended.
The investment has paid off. INWS has taken 1.6 billion rand (£131m) of cash from the business, more than covering its 900m rand investment. Revenues generated from its South African operation now account for nearly 14% of the group’s €1.5 billion (£955m) sales.
New publications are planned. Its other recent success has been the Isolezwe paper for Zulu readers in South Africa’s KwaZulu-Natal region. Plans are also afoot to bring more consumer magazines into the country and talks have already been held with Richard Desmond, owner of OK magazine.
Local economists say that despite 40% unemployment, South Africa is enjoying the most sustained period of growth since the 1960s. Interest rates seem high at 10.5% but they are at the lowest level for 24 years and the economy is expected to grow 4% this year and next. The consumer is driving the economy — house prices are growing at the fastest rate in the world.
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South Africa still has plenty of potential. Foreign investors such as Kodak and Barclays are returning to the country, and big American value investors such as Capital and Fidelity are building up stakes in local infrastructure companies.
There is still suspicion about black empowerment. This was introduced to transfer wealth and ownership to the black community but it has enriched only a few.
David Roberts, head of international retail and commercial banking at Barclays, which is acquiring a £2.8 billion majority stake in the country’s largest retail lender Absa, said: “There are two economies in South Africa, and the challenge the government has is to connect them. It is a partly developed county and partly a developing one. Developing countries face a choice: do we try and grow our way to a sustainable, more prosperous country and do we try and engineer that through state intervention? Over a period of time the (South African) government has concluded that a market economy is the best way of achieving long-term growth, although it does need to play a big role in providing the infrastructure.”
Goolam Aboobaker, deputy head of the president’s policy unit, said that in the past four decades jobs had been lost as firms invested in more capital-intensive technology. He said the country needed to attract companies that use more labour.
Economist Azar Jamine said the “mismatch of skills represents the single-biggest constraint on much faster economic growth”.
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O’Reilly is more critical and said that compared with Brazil, India and China, the efforts of South Africa to attract foreign direct investment were “paltry” and “embarrassing”.
To address criticism such as this, President Thabo Mbeki has set up the International Investment Council. Its members include O’Reilly’s father Sir Tony, chief executive of INWS, Jürgen Schrempp of Daimler Chrysler, and Niall FitzGerald, chairman of Reuters.
One of the biggest signs that the financial markets now believe in the country’s stability is the way they have reacted to the corruption scandal surrounding Jacob Zuma, who was sacked from his post of deputy president. In previous years the stock market would have fallen sharply but this time it barely moved.