Johannesburg, 13 March 2020: 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, says Brand South Africa, the official marketing agency of South Africa.
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. Tough trading conditions are most often cited as the reason, with South Africa’s economic growth stagnant and Australia experiencing an economic slowdown.
But despite market challenges, this is an opportune time for Australian companies to step up their presence in South Africa, and vice-versa, says Brand South Africa’s Acting CEO, Ms Thulisile Manzini.
“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,” say Manzini.
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.
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.
However, 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,” says Manzini. “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.”
“South African business has proven itself as being innovative, agile and professional. 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 says.
Notes to the Editor
About Brand South Africa
Brand South Africa is the official marketing agency of South Africa, with a mandate to build the country’s brand reputation, in order to improve its global competitiveness. Its aim is also to build pride and patriotism among South Africans, in order to contribute to social cohesion and nation brand ambassadorship.
About Global South Africans
Brand South Africa’s Global South Africans programme aims to develop a network of citizens living and working abroad – from business to government to ordinary citizens – to contribute towards the promotion of a positive image of the nation brand. These Global South Africans can show the world what South Africans are made of, why we are worth investing in and partnering with and how we can help find creative solutions to the gamut of the world’s problems, from poverty to climate change to violent conflict.