The best kept secret – SA exports to Africa up 35% in first quarter

Too many people in SA business are too busy whingeing about the current economic crisis, and ignoring the wealth of opportunity right on our own doorstep, according to trade consultant Duncan Bonnett of Whitehouse & Associates. What triggered this reaction was an article in FTW’s electronic sister publication, Cargo Info News, in which the independent research institute, CPB Netherlands Bureau for Economic Policy Analysis, revealed that world trade volume during the first quarter of 2009 had declined by 11.3% compared to the fourth quarter of 2008. According to the institute, the fall amounted to an annualised drop of 38%, making it the most severe fall since it began to keep records in 1991. “Dismal news along with all the other dismal trade estimates and forecasts with which we’re currently inundated,” said Bonnett. “The World Trade Organisation (WTO), as an example, has forecast trade will contract by 9% this year. “But one of the things that is not being talked about is that South Africa's exports – in value terms at least – rose by 35% to the rest of Africa in the first quarter this year.” Our performances with our other trading partners joined the “dismal” brigade. The only other region of growth for SA companies was Asia. But it was only up 4% in the first quarter – from R39-billion to R41-bn – which Bonnett suggested wasn’t a “real” increase. Exports to Europe were down by 17% from R46-bn in the first quarter of last year to R38-bn this year. For the Americas, exports plunged by 29%, from R18.5-bn to R13-bn. Right at the bottom of the league was Australasia – where export trade absolutely nose-dived by 50%. On the contrary, exports to Africa were bumped up by a healthy 35%, from R18-bn to R24.3-bn – in themselves tidy totals compared to the other trading partners’ off-takes. “Given all this,” said Bonnett, “it has to be apparent that Africa represents a huge, and ever growing, outlet for SA-manufactured and valueadded products. “And our exports to the rest of Africa now generally account for 20%-plus of our total exports – which underlines its status as a trading partner.” If you look at our overall trade stats for the first quarter, you get back into that dismal frame-of-mind. In the first quarter of 2009, our total exports contracted by 4%. “With inflation, currency exchange rates etcetera taken into account,” said Bonnett, “you’d say they remained flat.” We’re all too busy gazing at the navel of the developed world, Bonnett added, when it’s the developed world’s performance that is stunting any growth in our total export trade. “But there, right on our doorstep and what should be a captive market, is the rest of Africa,” he told FTW. “And I don’t think that SA companies are exploiting it as they should be.” Where Africa is vital to SA is because a lot of valueadded goods go into the rest of the continent. “The Southern African Development Community (SACD) is our second-biggest market for capital equipment after Europe – and it’s right there, just over the borders.” And, if you look at the list of the value-added goods manufactured in SA, Bonnett added, they comprise more than 50% of our exports into the rest of Africa. Also, SA capital goods exports into Southern Africa increased by 18% in the first two months of this year compared to minus figures for the rest of the world. “It just has to be recognised by SA business that Africa remains SA’s guarantee of any future prosperity.”