Posted: July 26, 2022
MEC for Economic Development, Environmental Affairs and Tourism, Hon. Mlungisi Mvoko.
Executive Mayor for Nelson Mandela Bay Metro, Cllr. Eugene Johnson.
United States Consulate General in Cape Town, Mr. Todd P. Haskell.
Namibian Consul General in Cape Town, Ms. Selma Nghinamundova.
Interim Chief Executive Officer for Lesotho National Development Corporation, Mr. Molise Ramaili.
Chairperson of the Eastern Cape Development Corporation, Mr Vuyani Jarana.
Ladies and Gentlemen.
It is a great honour to have received this invitation to join in the event of such an exceptional contribution to our businesses involved in exporting within the SADC region. Those who invented this kind of competition Awards for the region, must be congratulated. I am aware that last year was the inaugural event and this year represent the second ceremony for our exporters.
I have been given details that the Southern Africa Regional Exporters Awards is a collaboration between the Eastern Development Corporation (ECDC) and the US Government through the USAID Southern Africa Trade and Investment Hub (USAID TradeHub). The USAID Trade Hub actively engages with nine countries in Southern Africa to increase sustainable growth, to increase export competitiveness, and to increase trade within these countries. The said countries are South Africa, Namibia, Mozambique, Malawi, Lesotho, Botswana, Eswatini, Zambia and Angola. The Regional Exporter is an Annual Awards Competition that recognize good behaviour that is laudable, whilst honouring Southern African firms engaged in international sustainable growth through innovation and commitment.
I am particularly excited that USAID Trade Hub works with market actors to identify and resolve enterprise constraints and implement sustainable solutions through market based and investment facilitation services. In this regard, the Department of Trade, Industry and Competition commends the role that USAID is playing in this regard for our trade companies involved in exports in our region.
These Awards started at a time where exports market has been subdued and therefore difficult for this continent and the region, because of the COVID-19 pandemic. The 2020 hard lockdown in many countries resulted in the colossal disruption of global supply chains. In other markets, recovery after the economy was opening up took a long time to return to the pre-2020 era. In many ways, we are still recovering from that state of affairs. SADC economy requires a lot of support in order to sustain resiliency in generating commodities and exporting those products at the scale that key markets demands, in the post-COVID environment. We are however confident that this region will recover steadily against the many global shocks that have sent us into an economic tailspin. In our case as South Africa, there is a glimmer of hope as we observe trade balance figures.
South Africa’s trade surplus broadened to R28.35 billion in May of 2022 from an upwardly revised R16 billion in the previous month and above markets forecasts of R22 billion. Exports advanced 17.8% to R179.46 billion, mainly due to higher shipments of mineral products (35%), base metals (28%), chemical products (21%) and vegetable products (24%). Meanwhile, imports rose at a softer 10.9% to R151.11 billion, driven by mineral products (11%). Last year the Treasury forecasted revenue collection improvement of R69.8 billion for 2022 and R59.5 billion for 2023; and so the jury is out to judge if we will indeed achieve these figures with the exports being a significant contributor to our GDP. I say this because we are not always going to be as lucky as we did last year whereby there was commodity boom because the rise of their prices, which brought in some windfall in our revenue collection of around R120.3 billion. However, in the overall we are satisfied with the upward trajectory that the economy is picking itself up, even after 2021 July unrest and this years’ KZN and Eastern Cape floods.
Exhaustingly on our side as government, the economic rebound has not improved the unemployment rate amid the deteriorating confidence (as exacerbated by the July social unrest in KwaZulu-Natal and Gauteng which recorded more than 300 deaths with an economic impact of 14 anaemic private-sector investment, and weak credit extension). This challenge has been compounded by power shortages that will constrain the post-pandemic recovery.
Ukraine war impact on SA exports
There is no doubt that the current conflict between Russia and Ukraine has had negative effects in the international trade, and affected many regions who were either trading with Russia and Ukraine, or both. During 2020, Ukraine had a large net trade with South Africa in the exports of Vegetable Products ($19.2Million), Machines ($6.59Million), and Metals ($5.03Million). During 2020, South Africa had a large net trade with Ukraine in the exports of Animal Hides ($29.6Million), Transportation ($14.4Million), and Vegetable Products ($12.7Million). We hope that, will grow in other huge markets and therefore compensate the trade losses from that market.
SADC and AfCFTA.
One of the biggest opportunities for our SADC companies engaged in export market is the penetration of the African continent. I am quite aware of the difficulties in exporting to various regions within the continent because of the poor road and rail infrastructure, including border challenges, which are compounded by political instability in some countries.
The existence of the African Continental Free Trade Agreement compels us to have a fresher look at penetrating the continent on trade commodities. If we do not do this aggressively, and sometimes cooperating to each other as this region, the $2.6 trillion market with a population of 1.307 billion, will be dominated by other regions such as Ecowas, Comesa, EAC and the North. We need to devise mechanisms as this region in how do we act as a block in exporting to the east, west, central and north Africa within the context of the Free Trade Agreement. As the saying goes “the earliest bird catches the fattest worm”, we must gear ourselves for this entrance and maximum the scale that we are currently exporting within this continent.
In this regard, I want to take this opportunity to congratulate, first, the province of Eastern Cape through the ECDC for this initiative. Eastern Cape is one of the leading provinces on exports products, especially the auto sector and our two Special Economic Zones whose products are a marvel in our export market.
I therefore, on behalf of the dtic wish well for all our export competitors, both the winners and those who did not make it to finals. This region must be claim its rightful place under the sun. The sleeping giant must wake. We have all what it takes to become a powerful region, beyond the levels that we are sitting. Good luck!