Africa Trade and Investment - prospects for growth
The Cape Town and the Western Cape is strategically poised as a trade and investment springboard into the countries along the Africa west coast. Incidentally, three out of the top 10 fastest growing economies last year were on the west coast! This concept has become widely adopted and Wesgro captures all of our work in this area under our Western African Trade Corridor programme. Excitingly global trade and investment relations across the continent have begun to grow at very impressive rates. In 2010, the Western Cape economy was as large as Kenya, Tunisia, Sudan and Libya. With the Western Cape being the services powerhouse of the national economy, it is easy to see how the Western Cape will continue to feature as a strong economic player on the continent.
South African trade with the African continent has grown consistently since the 2008 with export growth reaching 18.8% in 2011. Primary export markets into Africa included Mozambique, Zimbabwe, Zambia, the DRC and Kenya. The top export products have been motor vehicles for goods transportation, refined petroleum oils, iron and steel manufactured products and various types of machinery.
The Western Cape has had an even stronger growth trend with exports in 2011 growing by 20.1% into Africa. Top export markets have been Angola, Mozambique, Zambia, Zimbabwe and Nigeria. Geographically this is somewhat different to the South African picture showing how economic diversity can also shape trade. The Western Cape exports refined petroleum oils, fresh fruit, tobacco products, fruit juices, fish and chemicals into Africa. Both alcoholic and non-alcoholic beverages such as wine, liqueurs and fruit juices have featured as strong exports from the Western Cape.
Between 2003 and June 2012, South Africa has received 16.2% of total FDI in Africa followed by Egypt, Morocco and Algeria (which are mostly recipients of Middle Eastern investment). South Africa is also the largest investing nation into Africa from the continent being the 5th largest investor globally into the continent during the period. The United States, France, the United Kingdom and India were other significant FDI investors. Investment on the continent has been focused towards the coal, oil and natural gas sector but the services sector as well as communications has received a lot of attention with a large number of investors.
The Western Cape has invested ZAR20.3bn in other African countries from 51 projects between 2003 and June 2012 which accounts for 20.2% of all projects from South Africa and 9.1% of the capital value of projects.