Growth calls for reliable data

Government policies and programmes to support export growth should be informed by reliable data, says Nicola van der Merwe, lecturer: Commerce at Eduvos in Potchefstroom. Her recently completed master’s thesis dealt with “Keeping the momentum in South Africa’s intensive export growth margin”. “The South African National Development Committee’s goal of achieving 6% annual export growth by 2030 requires a more focused approach to export promotion. “SA often focuses on discovering new markets or products (the extensive margin), but this can overlook the latent value embedded in existing trade flows (the intensive margin). “Although the main focus of the national exporter development programme is on export-led growth within the extensive margin (export diversification), a substantial portion of South Africa’s export growth momentum is concentrated in the intensive margin,” she says. Numerous studies have identified the importance of the intensive margin for export survival and depth, building expertise and especially keeping the export growth momentum in developing countries going. However, there are vital gaps in SA’s export data. “Between 2002 and 2022, the country exported over 148 000 product–country combinations (intensive margin), yet it remains unclear which of these holds more trade potential. Without clear prioritisation, policy efforts risk being spread too thin, missing out on ‘low-hanging fruit’ that could significantly contribute to export growth,” she says. One of the main recommendations of the study is to focus on understanding and deepening existing trade relationships where South Africa holds competitive advantages. In a trade environment constrained by limited resources, high entry costs for new markets and complex global dynamics, South Africa needs a more balanced export strategy, she says. The key markets include Western Europe and Asian markets – especially Germany, China, the Republic of Korea and India. “Our models show that there is still a very high but underutilised margin for expansion in these markets,” she told Freight News. Underutilised sectors include minerals, fruits and vegetables, food products and “interestingly, the transport parts sector”. In many cases the opportunity lies in adding value. “Targeted export promotion strategies should not be limited to primary commodities but should include value-added and niche industrial products. “The emergence of high- potential combinations across a diverse range of sectors signals that targeted export promotion strategies should not be limited to primary commodities but should include value-added and niche industrial products.” ER