Published On: Wed, Jul 17th, 2019

South Africa looking East as global trade dwindles

South African flag

South African flag

JOHANNESBURG – THE continent’s most advanced but struggling economy, South Africa, is pinning its hopes on a Look East policy to expand its exports base and overcome a decline in international trade.

India and the Republic of Korea feature prominently in the strategy.

To kickstart the initiative, a 27-member business delegation is in the Indian cities of New Delhi and Mumbai on an Outward Trade Mission led by the Department of Trade and Industry (DTI).

DTI is leading the mission through Export Marketing and Investment Assistance (EMIA) programme, whose objectives are to develop export markets for locally manufactured products and services as well as to recruit new foreign direct investment into South Africa.

Companies in the agro-processing, defence and electro-technical sectors are part of the delegation whose mission ends on Friday (July 19).

The initiative is part of broader efforts to increase South Africa’s investments to India to US$20 billion in the coming years, significantly up from the current $1 billion.

There is a standing agreement between the two countries to work towards that.

Fikile Slovo Majola, Trade and Industry Deputy Minister, said the Asian country boasted a population of over 1 billion people and is the 12th largest importer and the 17th largest exporter in value. He said this presented significant trade opportunities for South African firms.

“It is estimated that the country imports a total of $400 billion of goods and services annually and this presents substantial opportunities for South Africa in the areas of trade in value-added goods and services,” Majola said.

He added that there had been a substantial increase in the flow of trade and investment between South Africa and India since the establishment of formal diplomatic relations.

Relations have intensified since the end of apartheid in South Africa in 1994.

There are some 150 Indian companies operating in South Africa. They employ 18 000 South Africans.

Meanwhile, earlier this week, South African Minister of International Relations and Cooperation, Naledi Pandor, met Republic of Korea Foreign Minister, Kang Kyung-wha, in Johannesburg.

Kyung-wha said South Africa was Korea’s anchor country in pursuing a partnership with the African continent.

With imports and exports totaling $26,5 billion in 2014, Korea is one of the fastest emerging trade partners of the continent over the last decade.

“The Republic of Korea wishes to strengthen the relationship with South Africa in order to broaden and improve their collaboration with the rest of the continent,” Pandor concurred with his Korean counterpart.

Korea established diplomatic relations with South Africa in 1992.

It is South Africa’s fourth largest trading partner in Asia, and South Africa is the largest trading partner in the Korean Republic in Africa.

South Africa’s economy is experiencing its longest downward cycle in decades. The Reserve Bank projects the economy to achieve 1 percent growth this year.

– CAJ News

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