Changing trade patterns create additional risks

ENCOURAGING businesses to participate in international trade is important for South Africa, which is why solutions to assist new entrants are crucial, says Steven Matthews, CEO of First National Bank (FNB) International Banking. “With South Africa’s focus on entrepreneurial businesses being the force that will lead to growth in the economy and job creation, the role of the commercial importer or exporter has started to become far more significant, but it can be complicated and risky for a firm entering the field for the first time,” says Matthews. SA’s major trading partnerships are changing and the balance of trade is turning towards newer world trading powers such as China. “While Germany has been our major source of imports for many years, second place had been taken by China – up from eighth place in 1999 – and the UK dropped down in the list.” With China making considerable progress in a relatively short time, this trade shift can be linked to the South African government’s repositioning to form trade partnerships. “For example, in 1999 Brazil was rated 24th in terms of its exports to SA and it is now 11th. India, which was 23rd, is now rated our 13th biggest export avenue,” says Matthews. There is a similar picture developing in terms of South Africa’s exports and this demonstrates that there is a shift in this country’s trade both in terms of where we source goods and the nations to which we export. This correlation between imports and exports is a natural trend, in Matthews’ view. “For example, if S outh Africa imports a lot from a particular country, it will want its exports to rise in consequence,” he adds. “This pattern is likely to strengthen as more emerging markets such as Brazil, China, Russia and India and, to some extent, the African continent, come to the fore. Although we will still have strong ties with our traditional markets, trade with new players will become increasingly important.”