China coins 15.9% of total trade with the continent
South African companies
are expanding into
rapidly growing African
economies and capturing
a relatively large portion of the
continent’s global trade without
much regional competition.
But a potential threat to the
country’s trade gateway status
could rise in future with major
port and road developments
linking trade regions on the
continent, as countries improve
their global trade links, according
to analysts.
Senior economist at NKC
African Economists, Christie
Viljoen, said that while Nigeria
was the second largest regional
exporter after South Africa,
it couldn’t compete with the
country’s diverse exports, as its
trade was mostly oil related, and
Egypt came in as a distant third
competitor.
Viljoen said the country’s
automotive export industry was
thriving on the continent.
“South Africa’s exports of
vehicles – cars, trains, aircraft –
into Africa have seen the largest
growth rates over the past five
years. The local automotive
industry is currently struggling
in terms of domestic sales
but thriving when it comes to
exporting units to Africa and the
rest of the world,” Viljoen said.
“The strong export growth
trend is due to the quality of
locally produced vehicles under
licence from the world’s largest
automotive companies, the number
of middle-class citizens in fastgrowing
economies expanding at
a rapid pace, as well as the lack of
manufacturing facilities elsewhere
on the continent to service the
growing demand,” Viljoen said.
African countries recording
some of the fastest growing
imports – such as Mozambique,
Zambia and Zimbabwe – were
right on South Africa’s doorstep,
he said.
“There are many opportunities
for South African companies to
expand their footprint into Africa,
starting with neighbouring states,”
Viljoen said.
However, he said Asia continued
to be the favoured supplier of
manufactured consumer goods.
Associate director of Frontier
Advisory Deloitte, Hannah
Edinger, said according to the
United Nations Conference on
Trade and Development (Unctad)
China remained Africa’s largest
trading partner, coining 15.9%
of total trade with the continent,
excluding SA. The US accounts for
6.6%, India for 6.1%, South Africa
for 4.5%, and EU countries for
35%.
“SA has notable trade and
investment activity in Africa, with
SA product supply chains following
key investors in sectors including
mining, construction and retail
amongst others,” she said.
According to Unctad, SA’s
exports to the continent with the
highest growth rate between 2012
and 2014 range from coin, other
than gold, pulp and waste paper
to leather manufactured goods,
metalliferous ores and telecoms
and sound recording apparatus.
been a gateway to the continent
for multinationals, with
headquarters and operational
centres in SA enabled by relative
attractiveness vis-à-vis its African
peers in terms of infrastructure
development and institutional
performance, including a strong
banking sector, the continent’s
largest stock exchange, regulatory
environment and business
sophistication,” she said.
However, Edinger added
that barriers to trade on the
continent such as transport and
logistics challenges, the spaghetti
bowl effect of regional groups
and related tariff structures,
remained. Customs and poor
cross-border infrastructure, with
slow implementation of one-stop
border posts and corruption,
bribes and red tape – almost
now accepted as a cost of doing
business – were other challenges,
she said.
CAPTION
South Africa’s exports of vehicles – cars, trains, aircraft – into
Africa have seen the largest growth rates over the past five years.
Photo: Transnet Port Terminals
