South Africa Foreign Trade
Industry and trade are much larger in South Africa than in other African countries. South Africa is the largest trading partner of the European Union in Africa, the trade with the EU in different years varied and includes quite different products. Great Britain and Germany are the most important trading partners within the European Union. In the meantime, China has risen to become South Africa’s most important trading partner outside the EU, which according to economic experts currently has advantages and disadvantages.
The South African Department of Trade, Industry and Competition regularly publishes various trade and economic statistics. The Trade Law Center also provides up-to-date information on trade in South Africa, for example data on imports and exports in July 2020. The South African Institute of International Affairs (SAIIA) provides information about South African trade policy and its effects as well as the relationship between economic and foreign policy.
Due to its well-developed economic infrastructure and a growing market, South Africa offers great potential for investments that are being promoted by the government abroad, including Germany. But despite good economic conditions and legal investment incentives with a specially set up internet portal, foreign investors held back during the economic crisis. Under the new government of Cyril Ramphosa, who took office as President of South Africa in February 2018, it is hoped that new investments will be made.
The Middle Lower Rhine Chamber of Commerce and Industry provides information on investments. The World Bank also provides information on the investment climate in South Africa. In early 2018, South African business magazines reported investment forecasts. In 2018, the percentage of investments in relation to GDP according to the GTAI was 17.9% gross and for 2019 GTAI assumed an estimated 17.6% gross.
The automotive industry is one of the German direct investors. Around 600 German companies of various sizes and subsidiaries are registered in South Africa. They employ around 90,000 people in the automotive, chemical, mechanical and electrical engineering sectors. The majority of these companies are members of the German Chamber of Commerce and Industry for Southern Africa (AHK Southern Africa) in Johannesburg. Important German investors, including Daimler, BMW and Volkswagen, already had production facilities in South Africa during apartheid. After the end of apartheid, South Africa signed over 40 bilateral investment agreements (BIT). A study by the Friedrich Ebert Foundation assessed the investment agreement critical. The termination of investment agreements desk criticize German business representatives.
According to constructmaterials, South Africa is one of the few countries in Africa where the concept of corporate responsibility is applied. The requirements of the Black Economic Empowerment Act of 2003 are also taken into account here. Since the end of 2015, there have been discussions and controversies about the effects of factional and power struggles within the ruling party on ratings by rating agencies. These escalated after the devaluation of South Africa’s creditworthiness in April 2017, as a result of the dismissal of the internationally respected former finance minister Pravin Gordhan. Controversial. The links between members of the Zuma government and the Indian industrialist family Gupta were also problematic in economic terms. Review and restructuring are on the agenda of the government under the incumbent President Cyril Ramaphosa, even after the national elections in May 2019.
Relations within the 14 member states of the regional development community Southern African Development Community SADC focus on the integration of individual sectors such as transport and communication.
South Africa is developing into a new donor in Africa. The African Renaissance Fund serves as a financing instrument for this cooperation.
The African Development Bank has issued a strategy paper on regional integration 2014-2023. It emphasizes the promotion of private and state investments, capacity building and trade facilitation. Regional agreements are also important, for example on free trade between the economic areas of SADC, the East African Community EAC and the COMESA area.
South Africa has belonged to the group of IBSA states along with India and Brazil since 2003. Since April 2011 South Africa has been one of the BRICS countries, an amalgamation of to date Brazil, Russia, India and China. South Africa plays a bridging role for the African continent. Although trade with the BRICS partners – especially with China – has been intensified, South Africa may lose its special role as a gateway to Africa because other African countries are also attracting investors. The importance of BRICS membership for South Africa and other countries is repeatedly discussed and reflected on. The 10th BRICS Summit took place in Johannesburg at the end of July 2018 instead of.