Johannesburg - Despite tough economic times because of Covid-19, Brand South Africa believes the country and Australia should be intensifying bilateral trades.
Brand SA - the official marketing agency of the country, says despite companies on both sides of the Indian Ocean reducing their offshore holdings due to tough trading conditions recently, there are opportunities to step up bilateral trade right now.
Brand SA’s acting chief executive Thulisile Manzini, said major South African and Australian retailers, financial and mining companies have recently made the news by reducing their investments or exiting each-other’s countries.
Manzini said tough trading conditions were most often cited as the reason, with South Africa’s economic growth stagnant and Australia experiencing an economic slowdown. But despite market challenges, this was an opportune time for Australian companies to step up their presence in South Africa, and vice-versa.
“There are strong synergies between South Africa and Australia as Nation Brands, particularly in light of the fact that over 500 000 South Africans are now living in Australia, building our national brand equity and paving the way to increased trade between the two countries,” Manzini said.
South Africa is already Australia's 21st largest merchandise trading partner and 16th most significant merchandise export market, and its largest export market in Africa, with two-way trade in goods and services totalling AUD 3.6 billion in 2017.
South Africa is also Australia’s most significant investment partner in Africa, with bilateral investment approaching AUD 15 billion in 2017.
Manzini said Australia recognises that Africa offers significant business opportunities in sectors such as mining, agriculture, food processing, energy, construction, real estate, tourism and hospitality, transport, telecommunications and more, with South Africa dominating stocks of African investment into Australia.
"Australian investment in South Africa has also increased mainly in mining, mining equipment, agriculture, agribusiness and infrastructure, and services. South African – Australian business engagements are supported by the fact that the two countries have many cultural similarities, a strong focus on similar sectors – such as construction, mining and agriculture, and use English as the primary business language," she said.
With that being said, issues such as Eskom’s woes, a drop in investor confidence and rising crime have tarnished South Africa’s reputation in recent months.
“But slow economic growth and infrastructure challenges are not the full picture. For example, top South African brands are outpacing GDP, growing at 16.1% YoY.
"The planned revitalization of industrial parks and development zones around the country, and a new boost for South African small businesses, as outlined in the National Budget, will pave the way for new business partnerships with innovative entrepreneurs around South Africa. Plans to stabilise power supplies and curb excessive state expenditure point to a more stable environment for prospective investors," Manzini said.
She added that South African business has proven itself as being innovative, agile and professional. She said one other aspect that could increase collaborations and trade is to focus on Small Medium Enterprises, a focus that President Cyril Ramaphosa said could carry the South African economy.
"Tapping into the flourishing small business sector can take new and exciting products and services to market in Australia at very competitive costs – particularly at a time like now, when local businesses are actively seeking access to international markets and thus presenting the most compelling value proposition they can,” Manzini said.