South Africa is likely to
experience stagnant
import growth due
to the weakened
rand, rising interest rates and
lowered consumer and business
confidence, analysts have
forecast for 2016.
Econometrix economist Dr
Azar Jammine said imports
were expected to grow by
2.2% in 2016 partly due to
low oil and commodity prices
depressing real import values.
“Economic growth is not
expected to be strong and
capital investment is expected
to be weak because of a lack of
business confidence, so there
won’t be a big demand for
machinery and other importintensive
goods,” he said.
Consumer spending was also
likely to take strain with less
spending on imported durable
goods such as vehicles and
appliances, he said.
“Consumers are likely to
be under pressure given the
drought conditions, the fact
that interest rates have risen
and are likely to rise further,
and employment prospects are
weak,” he said.
Jammine said the business
sector was concerned about
survival and refraining from
major investment projects to
conserve cash to survive the
low growth environment, while
parastatals were cash-strapped
and reluctant to spend on nonessential
capital investments.
Factors impacting
confidence included the
government’s constantly
changing policies that were not
conducive to investment – such
as the new labour and visa
regulations and the proposed
energy regulations, he said.
Import volumes grew in the
first two quarters of 2015 by
4.8% and 7.1% respectively,
Jammine said, but were
expected to slow in the second
half to a forecasted 5.4% overall
rise for the year. However, value
growth was expected to be up
0.5% in 2015 with some growth
in the import of intermediate
goods expected in 2016.
Imports into SA came
mainly from Asia (45.5%),
Europe (29.5%) Africa (13.4%),
North and South America
(10.1%) and Oceania (1,3%) in
2015.
DAL Agency general
manager Malte Kersten
said the company expected
marginal growth in imports
in the automotive sector in
2016, with a lack of business
confidence
hampering
import
growth
generally.
“We don’t
expect times
to be better
next year –
maybe only
in 2017 – but
exports are
strong and on
the reefer side
there is a strong demand for
grapes from the Western Cape,”
he said.
“There is a lot of
competition, tight margins
and over-capacity in the
shipping industry and that
is not easy to deal with,”
he added.
SA Association of
Freight Forwarders
Harbour Carriers’ division
chairwoman, Sue Moodley,
said the weaker rand would
have a “huge negative
impact”.
“Food will be more
expensive (and) this will lead
to higher inflation and interest
rates. Our imports will
become more expensive.
The weak rand is
also going to affect
the government’s
multibillion rand
infrastructure as
well as nuclear
build programmes,
which will affect
import prices
and
volumes,” Moodley said.
However, she said
import opportunities still
existed for goods ranging
from pharmaceuticals to
treat TB and malaria to
security equipment such
as cameras and electronic
devices, and sim cards for the
telecommunications sector.
“With the expansion of
port infrastructure, there
is potential to import steel
and other products from
various countries. There are
opportunities for import in the
nuclear industry (and) the
opportunity to revamp existing
cities is huge and presents an
opportunity to various import
sectors,” she said.
INSERT & CAPTION 1
We are expecting
marginal growth
in imports in the
automotive sector in
2016.
– Malte Kersten
INSERT & CAPTION 2
Imports are expected
to grow by 2.2% in
2016, partly due to
low oil and commodity
prices depressing real
import values.
– Dr Azar Jammine
