The Department of Trade and Industry today presented information about the country’s exports and recently launched Trade Investment Africa and Trade and Invest in South Africa initiatives to the Portfolio Committee on Economic Development. These initiatives are the drivers of exports and investment.
The Acting Deputy Director of Department of Trade and Industry, Mr Riaan le Roux, said although global exports were resilient, South Africa lost market share, dropping to 0, 47% in 2016, which is a grave concern.
To mitigate this downward trend, the department decide to increase the quality and quantity of foreign and domestic direct investment, as well as developing the capabilities of new and existing South African exporters.
“In order to grow exports globally,” Mr Le Roux said, “We need to provide appropriate information, financial support and practical assistance to sustain organic growth in traditional markets and to penetrate new high-growth markets.”
To this end, new work streams have been devised. Trade and Invest in South Africa, Trade Investment Africa and the Invest in South Africa export development and marketing initiatives are all aimed at harmonising South Africa trade and investment potential, he said.
This is harnessed by an Integrated National Export Strategy that seeks to maximise the South African export culture. Mr le Roux also told the Committee about the Trade Invest Africa initiative, which since its inception in July 2015, has aimed to increase investments and trade with the rest of Africa. “This was meant to position South African entities and companies as preferred suppliers of value-added-goods and services,” he explained.
The department has a variety of offerings for the companies wanting to invest in Africa, he said. “Trade Invest Africa is working with various institutions to facilitate access to capital for such companies, as well as export insurance financing, export market exploration, infrastructure and industrial project funding.”
To attract direct foreign investment to South Africa, the Department of Trade and Industry had to improve South Africa’s image, brand awareness and investor perceptions, he said. “Investment promotion agencies must ensure that their operational functions are geared towards addressing the aforementioned imperatives holistically, as a precondition for success.”
The most innovative intervention in this regard is the inception of one-stop-shop investment outlets, he said. “This outlet provides investment promotion, facilitation and aftercare, which are geared towards fast-tracking investment projects and reducing government red tape.”
Of significance is its aftercare services, he said. “This include advice on recruitment, business forums, retention and expansion services.”
During the question time, a Committee Member, Ms Alina Mfulo, asked why South Africa still exports raw material instead of manufactured products to countries such as China.
The Acting CEO of Trade Invest Africa, Ms Lerato Mataboge, replied that China does not allow manufactured products in its market.
The Chairperson of the Portfolio Committee, Ms Mmathulare Coleman, interjected: “Why do we continue to engage in trade relations that do not benefit us? Why do we insist on that at our own expense? Is this a trade relation that is by its nature political due to our membership in Brics?”
Ms Mataboge replied: “Mostly it has to do with the fact that China is one of our biggest trade partners and we have to weigh the impact of such decision on our existing trade balance sheet. Yes, there is a multilateral political relation to this. Also, as much as these concerns are genuine, we must assess what will be the impact of losing such a trade partner.”
Ms Mafulo also asked how small and medium enterprises benefit from these trade and investment deals, especially those owned by the previously disadvantaged. Ms Mataboge replied: “Most black companies are benefitting from the infrastructure built in Africa. They bring knowledge that does not exist.”
South Africa seems to lack an economic development focus, said the Committee Chairperson, Ms Coleman. “If you ask me what is South Africa’s economic development focus, I would not be able to answer such a question. There is an emphasis on the need to exploit the ocean economy, but also there is a talk of other areas of economic exploitation at the same time. And there are too many structures that deal with trade and investment.”
Ms Mataboge replied: “Our business case is fairly new. We would like to ask for time for it to prove its worth. But we believe that now, more than ever before, there is a synergy and interface that seek to streamline the various business cases.”
Ms Coleman suggested that foreign missions should undertake some of these trade and investment initiatives. “This will help to cut costs of service and rationalise resources that are meagre,” she said.
In her concluding remarks, Ms Coleman said she was impressed by the departmental officials’ pride in their work. “If your efforts can be replicated, I see a prosperous future for this country.”
28 November 2017