Growth sustainability depends on financial health of trading partners

While imports and
exports have registered
double-digit growth for
Safmarine this year, the growth
comes with a word of caution
from Africa region executive
Jonathan Horn.
“Clearly the financial crisis is
tapering off but is still playing
out to some extent, especially
in the large consuming nations
of Europe and the USA.
Unemployment continues to be
a problem, households are still
shedding debt and banks are
still faced with write-offs, Final
recovery ultimately depends on
consumption growing,” says
Horn.
The trend in South Africa
has however mirrored that of
Africa, says Horn. “While the
rate of growth recovery has been
somewhat surprising between
late 2009 and mid 2010, the
sustainability of this needs to be
looked at with some caution.
“Rates in Africa have
increased over 2009, but on
average remain some way below
2008 levels. Clearly there is
variation across locations and
trades but we believe that rate
levels on average remain some
way below where they need to be
to ensure sustainable profitability
for shipping lines.”
Export volumes from East
and West Africa grew in
2009, despite the recession.
And this trend has continued
through 2010, with the largely
commodity-driven exports from
this region delivering doubledigit
growth.
“South African exports,
however, were well down last
year, reflecting the difficult
trading conditions experienced
by most of our customers. In
2010 however, this has turned
around in line with the economic
recovery and we have seen a
return to growth.”
From an import perspective,
Safmarine experienced volume
growth in 2009 in both East and
West Africa – and this trend has
continued into 2010 In South
Africa there was a contraction
in volumes last year in line with
the market, but this year imports
have delivered strong growth,
much of it fuelled by the 2010
World Cup.”
Overall, Africa remains
import dominant, with imports
comprising roughly two thirds of
the container flows. South Africa,
typical of an economy which
has higher levels of value add,
reflects a more balanced situation
between imports and exports, he
said.