Economist spotlights need
to boost new exports,
writes Ray Smuts
IT'S NEVER a good idea to place all one's eggs in a single basket as the Eastern Cape discovered 30-odd years ago through its single-minded focus on the motor industry, an admonition the Western Cape need well heed.
This in essence is the belief of top economist Wolfgang Thomas, who urges that more attention needs to be given to the province's non-agricultural exports, this despite two years of bumper growth.
Thomas, chief economist of Wesgro, the trade promotion and investment agency in the Western Cape, believes metals, crafted products and hi-tech sectors could all make an important contribution to the province's exports. They only constituted 8,4% of the country's total exports in 1999.
Exports as a percentage of the province's gross regional product were relatively low at 12% compared with about 20% for South Africa as a whole.
Up till now the province has traditionally concentrated on the primary product sector, that is, fruit vegetables and fish, but globalisation and uncertain climatic trends are increasing the potential risk of these products.
Thomas says in the four years up to 2000 Western Cape exports (excluding petroleum products) increased by 72,8% from R9.26 billion to R16 billion.
In terms of South Africa's national resources endowment, these figures highlight the need to boost Western Cape exports either in the conventional product range or in new products.
The ten fastest growing export categories with increases above 20% between 1996 and 1999 include none of the of the established export leaders, with the largest volumes coming from base metals, vehicle parts, dairy products, cosmetics/essential oils, articles of stone and processed cereals.
The Western Cape's latest Exporters' Directory shows the region exported with a relatively high share in national exports - fish/animal products (69,1%), prepared food and beverages including wine (40,3%), hides and skins (31,1%), footwear (26%) and textiles (22,8%).
Thomas says the ten fastest growing Western Cape export markets suggest a distinct widening of the geographic spread to include Slovenia in Eastern Europe, Nigeria and Benin in Africa, Brazil in Latin America and Denmark in Europe.
He points out, too, that Western Cape exports into Africa declined from a 23,5% share of total exports to only 11,5% between 1996 and 1999.
