SA keeps tight grip on SADC economy
A 2006 edition of South Africa’s Global Trade Dynamic released by Standard Bank South Africa noted that South Africa has strengthened its continental march at the same time consolidating its economic grip in SADC.
President Thabo Mbeki’s diplomatic assault on the continent is hard on the heels of cargo trucks and ships and dark suited businessmen from South Africa, prowling the continent for business opportunities.
The balance of trade with the rest of the continent is heavily tilted in South Africa’s favour.
Standard Bank said that Zimbabwe is South Africa’s largest bilateral trading partner on the continent and of South Africa’s top ten trading partners, eight are from southern Africa.
In 2005, 68 percent of South Africa’s total exports were destined for the SADC region, the report said.
“Exports to the continent reflect the higher level of industrialisation in South Africa and comprise mainly of manufactured products,” the report said.
About 66 percent of South African imports come from the SADC region and 24 percent from West Africa.
The South African economy has continued to grow buoyed by strength in the finance and business services sectors as well as the construction industry.
South Africa’s exports to SADC at R29.7 billion constitute 68 percent of total exports to the whole continent whilst imports at R12.1 billion constitutes 66 percent of total from Africa, statistics for 2005 say.
The report noted that South Africa’s trade with the regional customs bloc, SACU member states, Botswana, Namibia, Lesotho and Swaziland (BNLS) group dominates trade within the SADC region.
“Trade with non-SACU members of SADC has also grown in importance in recent years but would benefit immensely if the SACU free trade area was extended to include all SADC member states.”
“It is expected that deeper integration should lead to economic convergence and the development of an environment conducive to economic growth and poverty alleviation,” the reported noted.
Zimbabwe is home to 24 percent of South Africa’s exports to the region, which accounts for only 50 percent of total imports into Zimbabwe.
Mozambique, which is fast emerging from years of civil conflict, is second in line receiving 21 percent of South Africa’s exports to SADC, which accounts for 42 percent of its total imports.
“Mozambique’s firm commitment to sound macro-economic policies and implementation of structural reforms supported by considerable foreign direct investment and donor support, manifested in strong export-led growth rates that were the highest on the continent, has led to relatively robust trade relations between South Africa and Mozambique,” Standard Bank said.
Buoyant growth in traditional Mozambican exports such as agricultural and fisheries products, completion of the Mozal and Sasol projects and the improved terms of trade all contributed to narrowing the current account deficit in 2004.
South African exports to the southern African region are dominated by mineral products, machinery, mechanical appliances, base metals and chemical products.
Imports from Zimbabwe dominate South Africa’s import basket from SADC, with imports constituting 31 percent of total basket.
In 2005, Zimbabwe ‘s main export partners were South Africa with a 32.8 percent market share, China, 7.4 percent; Japan, 6.3 percent; Zambia, 5.2 percent; Netherlands 5 percent; US 4.6 percent; Italy 4.2 percent and Germany 4.1 percent.
“Zimbabwe exports mainly machinery and transport equipment and other manufactured products, chemicals and fuels to these countries. South Africa imports mainly mineral products and base metals.”
South Africa’s imports from Angola and Zambia together constitute 32 percent of the total import basket from the SADC region.
But unlike to Zimbabwe and Mozambique, South Africa is falling short of being the main exporter to oil rich Angola.
South Africa and Angola have signed four agreements aimed at strengthening economic and social co-operation between the two countries.