In light of the concerns expressed over the strength of the rand, 2003 saw the first decline in exports to Africa since the end of apartheid, in rand terms. It was quite substantial as well - down by 12.4% from the 2002 level.
In dollar terms however, South Africa’s exports have grown steadily over the last six years, whatever the level of the rand versus the dollar. Exports in 1998 amounted to US$3.61bn, while in 2003 they had grown to US$5.1bn. However, it’s difficult to gauge the actual impact as trade in the region is done in both rands and dollars depending on client relationships.
The Chinese alternative
What could be interesting
is the impact that the relatively strong Rand has had on our competitiveness vis-ˆ-vis trade from China.
That currency maintained at an artificially low level, and this could well have impacted on exports not only from South Africa but other major exporters to the region.
Non-SADC markets
make impact
Another interesting point - and a good one from South Africa’s perspective - is the growing importance of markets outside of the SADC region. SADC traditionally accounted for close to 80% of our exports in the early nineties, but this dropped to less than 70% for the first time in 2003.
The initial reaction that this is because of the problems in Zimbabwe does not really stack up. That country remains the number one destination for South African exporters, although the only country to have shown a slower rate of growth in imports from South Africa over the period from 1998 to 2003 was the DRC.
Two traditional markets - Mauritius and Malawi- have been slipping down the rankings in the last three years, from 5th to 7th and 6th to 9th spot respectively. This is largely as a result of growing exports to Nigeria (8th to 5th) and Kenya (7th to 6th) since 2001.
It is interesting to note, that exports to Ghana, up 13.6% over 2002, Madagascar, a huge 81% and Cameroon (38.6%) all bucked the overall trend last year, and placed these countries just outside the top ten destinations. The country in this next bracket that showed the worst performance was Morocco, where our exports declined by over 56% year-on-year, having exceeded the R1bn mark for the first time in 2002.
Oil producers
In terms of looking for future trends, it is notable that exports to the traditional oil producers and those with new oil industries in West Africa have grown by over 315% since 1998 - obviously much of it to Angola and Nigeria, but with growing amounts to Cameroon, Chad, Equatorial Guinea and others.
This group accounted for 18% of our exports in 2003, up from 8% in 1998. The growing belief that there are large reserves of oil and gas in East Africa - from Ethiopia to South Africa’s coast - should be good news for local companies in the next three to five years. This includes landlocked countries such as Uganda, as well as inland areas of Tanzania and Kenya.
The fact that Cape Town is beginning to emerge as a hub for the oil services sector should assist South African companies in developing their business in this area, especially as oil majors are now looking to source more of their inputs locally and regionally.
From a product perspective, the key exports remain unchanged, although as the table below indicates, most of the key product groups showed a decline in rand terms. The exception to this was exports of base metals and articles, with exports of these goods growing in Angola (up 15%), Nigeria (67%), Kenya (13.5%), Tanzania (41%) and DRC (9%), amongst the top ten destinations.
The top ten destinations for SACU exporters account for 80% of the total export market to Africa. The table below shows how the key products exported to each market fared in 2003 compared to 2002.
