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South African products and commodities exported to New Zealand are concentrated in the following sectors: paper products, plastics, machinery, iron and steel and vehicles.

South African imports of New Zealand products and commodities are mostly concentrated in the following sectors: electrical machinery, machinery, dairy products, animal and vegetable products.

For current information on trade statistics between South Africa and New Zealand, visit the web site of the Department of Trade and Industry of South Africa.

The Track II Study

The Ministry of Foreign Affairs and Trade in conjunction with the South African Department of Trade and Industry finalised the Track II Trade Study in April 2011. The Study examines the trade relationship between New Zealand and South Africa and provides valuable insights into the dynamics of the current trading relationship.

For more information on South Africa statistics (imports, prices, population, agriculture) go to http://www.stats.gov.za

New Zealand –Africa Business Council was launched in February 2013. The South African High Commission is proud to have played an integral part of the creation of this body. For further information, please consult the following website: www.nzabc.org

Please add link : SA as an investment destination (document is attached separately).

 

South Africa as an Investment Destination

 
1. At  a Glance

Population:                                                            51.7 million
Total GDP (2012):                                                  R 3 trln  = (US$384 bn)
GDP per capita (2012):                                           R60 505  = (US$7 379)
Real GDP Growth:                                                  2.5% (2012)
Inflation:                                                               5.6% (annual average)

2. Policy Framework ( IPAP + NGP + NDP)

2.1 IPAP2: Approach to Industrialisation:

  • Cross-cutting interventions e.g. Industrial Financing, Procurement policies; Industrial financing, Leveraging procurement, Developmental trade policies, Competition policy,   Developing demand-side skills strategies for industrial development, Innovation and Technology, Special Economic Zones (SEZs) and industrial development and Regional Integration.

Key Opportunities

  • Opportunities to grow manufacturing exports on the rest of the African continent linked to mining, infrastructure, construction and a rapidly growing middle class
  • Export opportunities to fast-growing developing countries such as high growth net food importing countries.

Priority Sectors include:

    • Agro-processing
    • Business Process Outsourcing & IT Enabled Services
    • Capital / Transport equipment,  metals & electrical machinery & apparatus
    • Consumer goods
    • Boatbuilding
    • Green Economy Industries
    • Pulp, Paper and Furniture
    • Advanced Manufacturing (Laser technology; Advanced Robotics)
    • Bio- manufacturing

     2.2 New Growth Path

    • A response to the country’s core challenges of mass joblessness, poverty and inequality, it proposes both sectoral interventions; macro-economic and microeconomic policies designed to ensure that the economy becomes both more competitive and more employment friendly.

    Proposed strategies:

    •  To deepen the domestic and regional market by growing employment, increasing incomes and undertaking other measures to improve equity and income distribution,
    • To widen the market for South African goods and services through a stronger focus on exports to the region and other rapidly growing economies.

    Priority sectors:

    • Infrastructure, agricultural value chain, mining value chain,  green economy, manufacturing sectors - which are included in IPAP2, tourism and certain high-level services.

    2.3 National Development Plan - 2030

    Key priorities include:
    Medium-Term: Bolstering competitiveness and investment in high value-added industries and increasing the volume of mineral exports – in context of IPAP & NGP

    Longer-Term: Enhance competitiveness in areas of comparative advantage that can draw more people into work by improving the skills base and increasing competitiveness, the economy can diversify, offsetting the distorting effects of elevated commodity prices on the rand.

    SA’s Competitiveness Factors

    • Stable political environment and adherence to the Rule of Law
    • Continues to play a leading role in conflict prevention, peacekeeping, peace-building and post-conflict reconstruction.
    • Financial market development and sophistication and source of exceptionally highly developed professional services and financial expertise, which  is globally recognized.
    • With direct access to the rest of the continent and situated between the East, the Americas, Europe and the Middle East, South Africa has many geo-strategic and related structural advantages.
    • South Africa’s excellence in Science, Technology and Innovation is also recognised e.g. majority stake in SKA.
    • South Africa’s role in global governance structures as well as its leadership role within the G77 and China, NAM and the AU is recognized globally.
    • Within BRICS, considerable non-energy in situ mineral wealth (estimated at $ 2.5 trillion or R18 trillion) as world's largest producer of platinum, chrome, vanadium and manganese, the third-largest gold miner, as well as offering highly sophisticated mining related professional services, contributes significantly to the BRICS resource pool.
    • By Deduction from above factors – SA well positioned as a Gateway to Africa.

    • 2010 FDI Flows into SA per Reserve Bank Data:
    • Total:                        R1 tril
    • Europe:                       85%
    • Asia:                              8%
    • Americas                      7%

    Investment Prospects: Presidential Infrastructure Coordinating Commission (PICC):

    • Government  has developed 17 Strategic Integrated Projects (SIPs)  which will integrate more than 150 of the individual infrastructure plans into a coherent package.
    • SIPs cover social and economic infrastructure – covering all 9 provinces (with an emphasis on lagging regions)
    • Minister of Finance recently announced that approximately US$100 bn has been allocated in the Government’s budget for spending on infrastructure projects over the next three years focusing on rail and road projects, economic links in five regions in the country, including new universities and refurbishment hospitals.
    • While Government has invested large capex, the private sector has a critical role to unlocking economic potential.

    SADC: Key  Points

    • As the largest economy in Africa, South Africa dominates SADC, with 80 percent of the region’s GDP.
    • In 2012, it was estimated that the population in the SADC region stood at 257.7 million, DRC having the largest population of 72 million. Thirty-nine percent of the population in the region is urban. The collective GDP for the region was set at US$471.1 billion.
    • SADC has a generally low average GDP per capita compared to other regions globally; however it is still the most developed in the whole of Africa. The region is also well integrated and has  well-established foreign investment flowing within the region.
    • In general, member states have been undergoing policy reforms and the refinement of investment processes, which have improved their respective business environments such as establishing investment promotion agencies, improving investor protection and increasing the transparency of investment codes and policies.
    • The global economic crisis has had a significant impact upon the region’s economy however the economy began to recover in 2010 and economic activity in return increased from 2.3 percent in 2009 to 5.5 percent in 2010.
    • In 2011 GDP was recorded at 4.7%, an 0.8% drop from the previous year, with Lesotho, Namibia, and Swaziland recording the lowest growth. Only Mozambique achieved the 7% growth target set by SADC. Growth for the region was forecast at 5% in 2012.
    • Tripartite  - FTA (negotiations  to conclude in 2014)
    • SADC (14) + East African Community EAC(5) + COMESA (17) with overlaps
    • Driven by three pillars viz: market integration, infrastructure development and industrial development.
    • The FTA will have a total population of 600 million people and a combined output of goods and services of more than $1 trillion.
    • Africa’s Rise is Real

    8.1 Key Points

    • Political landscape: Democracy has taken root.
    • The regulatory environment for doing business is improving.
    • Evidence of growing interest in the African continent as investment destination. Following Asia, Africa is new global growth frontier.
    • Strong growth rates, averaging 5% over the past decade, are expected to increase by a further 5.2% in the next five years.
    • Africa has 60% of the world’s unused arable agricultural land, a young growing population, a growing middle class with considerable purchasing power with 40% urbanisation rate.
    • In 2010, six of the world’s ten fastest growing economies were in Africa and seven African countries are expected to be in the top 10 over the next five years.
    • FDI projects into Africa have grown at a compound rate of almost 20% between 2007 and 2011.
    • Africa’s global share of FDI rose from 4.5% in 2010 to 5.5% in 2011 of all new FDI projects globally (Ernst & Young 2012).
    • Africa’s output is expected to expand by 50% over the next four years, from US$1.6 trillion in 2010 to approximately US$2.6 trillion in 2015. Economic growth is projected to expand by an annual average real rate of 5.5% each year through the five year period.

     8.2 Diversification of sources of growth

    • There is a fairly common view that Africa’s growth over the past decade has been driven by natural resources.
    •  However, while they are and will continue to be an important contributor to growth, resources have contributed less than a third of Africa’s growth since 2000.

    According to Ernst & Young’s 2012 Investment in Africa Report:  

    • The rest of Africa’s growth has come from a range of other sectors, including agriculture, manufacturing, construction and, in particular, services.
    • These growth patterns are reflected in the overall structure of Africa’s total GDP (which is this year forecast to break the US$2 trillion mark).
    • During a period in which the size of Africa’s GDP has tripled, natural resources (excluding agriculture) have made an average contribution of less than 20%, while services are moving ever closer to accounting for 60% of value added.

    8.3 Growth and diversification of trading partners

    • Growth in Africa’s trade with the rest of the world has grown over fourfold since 2000 and has been another key driver of Africa’s sustained economic growth.
    • The EU as a bloc remains Africa’s largest trading partner, and trade between Africa and the EU has grown at a compound rate close to 10% since 2000.
    • However, the EU’s relative share of trade with Africa has shrunk considerably over that period — from over 50% in 2000 to around about 30% today — as growth in trade with other markets, particularly those in the emerging world, has picked up.
    • Standard Bank, for example, estimates that that BRICS’ (Brazil, Russia, India, China and South Africa) total trade with Africa reached US$340 billion in 2012 (i.e., Africa’s total trade with the rest of the world in 2000), representing a more than 10-fold increase over the course of a decade.

    8.4 NEPAD
    The New Partnership for Africa’s Development (NEPAD) is a continental strategic vision framework for socio-economic development aimed at:

    • The revival and development of Africa and an aspiration to establish the Continent as an active, responsible partner in the emerging world economic order. 
    • Strengthening Regional Economic Communities (REC’s) to create an integrated environment for sustainable economic activity on the Continent. 

    Interrelated priority NEPAD programmes
    Agriculture and Food Security, Climate Change and National Resource Management, Regional Integration and Infrastructure, Human Development, Economic and Corporate Governance.

    8.5 Presidential Infrastructure Champion Initiative (PICI)  DEVELOPMENTS:

     NB:  Infrastructure gaps, particularly relating to logistics and electricity, are consistently cited as the biggest challenges by those doing business in Africa. Thus a large majority of the total infrastructure projects are related to power (37%) and transport (41%).

    The current PICI projects and their champions include:

    • Algeria:  The Missing link of the Trans-Saharan Highway and the Optic Fibre Project from Algeria to Nigeria via Niger
    • Republic of Congo:  Road/Rail Brazzaville-Kinshasa Bridge
    • Egypt:     River Navigation Project from Lake Victoria to Alexandria
    • Nigeria:  Trans-Saharan Gas Pipeline Project
    • Rwanda: ICT Broadband Fibre Optic Network Linking Neighbouring States
    • Senegal: Dakar-Ndjamena-Djibouti Road and Rail Project
    • South Africa:  North-South Road and Rail Development Corridor (Cape to Cairo).

     8.6 South Africa as Champion of the North-South Corridor:

    Progress has been made with regards to the identified 9 priority projects, two of which are fully financed and can be moved to the post-financing stage for project monitoring and reporting. These include:

    • Dar es Salaam 5, 6, 7 bulk Terminal; Durban Port; and the National Railways of Zimbabwe among others.

    All of the PICI projects offer opportunities for private and public sector investment.

    • SA as Gateway to Africa
    •  BRICS membership is part of SA’s contribution to socio-economic regeneration of Africa.
    • South Africa punches above its weight within BRICS-Africa trade. Though accounting for just 2.5% of BRICS GDP, South Africa is responsible for 11% of BRICS-Africa trade
    • In 2012 South Africa-Africa trade was 35% greater than Brazil-Africa trade and 200% greater than Russia-Africa trade.

    BRICS and Africa

    • According to Standard Bank BRICS countries trade more with Africa than they do with each other
    • BRICS Countries are among the largest new investors in Africa and during the BRICS Leaders-Africa Dialogue Retreat, held in Durban on 27 March 2013, the PICI projects were presented to the BRICS Leaders for possible consideration to fast track their implementation.
    • BRICS-AFRICA trade reached $340 billion in 2012 and is projected to reach $500 by 2015 roughly 60% of which (USD300bn) will consist of China-Africa trade.
    • BRICS-FDI is projected to increase from $60 billion in 2009 to $150 billion in 2015.

    Conclusion

    In conclusion we can acknowledge that we are witnessing nothing short of an economic revolution or what Robert Zoellick, the former president of the World Bank, describes as a “tectonic shift in global economic power”.  The opportunities presented by Africa for investment and trade have never been so great and the possibilities so attractive. Indeed the momentum will endure and extend to many more countries across the Continent. Ladies and gentleman, Africa is Open for Business.

 
HE Zodwa Lallie
Head of Mission
 
 
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