Mungo Soggot
SOUTH AFRICA has experienced a massive surge in non-mineral export volumes matched only by the Asian tigers, says Mike Schssler, an economist at stockbroker EW Balderson.
Schssler says latest Portnet figures show a 33% increase in the volume of exports that left the port of Durban last year. The port handles a wide range of goods – unlike, for example, Richards Bay, the country’s largest port, which handles mainly coal.
There was a similarly healthy pattern at Johannesburg International Airport, where increases in export volumes of between 38% and 53% were registered in the four months to February this year. Year-on-year increases in export volumes from the airport never dropped below 20% in the six months to December 1996. The airport handles the bulk of freight leaving the country.
Schssler says that as both the airport and the port deal with a wide variety of manufactured goods – and do not concentrate on mineral exports – the growth shows that South Africa’s exports have become much less dominated by minerals.
The value of South Africa’s exports has increased substantially during the past year because of the declining value of the rand. But an increase in the actual volume of exports is a more important sign that the economy is ticking, he says.
According to the latest Reserve Bank Quarterly Bulletin, export volumes for 1996 were up 12% on the previous year, while the value of exports increased 21% during the year.
“By January 1997 exports were up 52% on January 1996 in value terms (according to Customs and Excise figures). This is the type of export growth that only East Asian countries see,” Schssler says.
He says a breakdown of the Durban port exports last year shows most of the goods came from the manufacturing sector: vegetables, prepared foodstuffs, chemicals and plastics all increased at least 60% in volume terms, while mineral products actually decreased 8% in volume terms.
Meanwhile, the National Association of Automobile Manufacturers of South Africa says there was a 400% increase in car exports in volume terms.
“Today South Africa is emerging as a genuine manufacturing country. It is becoming clear that manufacturing exports are gaining faster than commodities.”
Schssler says the growth in export volumes is being driven by a number of factors apart from the declining value of the rand, including huge increases in capital equipment imports, which are providing unprecedented productivity and quality improvements for South African industry.
He adds that the returning multi-national companies are helping their South African partners export through their global marketing networks.
The latest Quarterly Bulletin says some of the recently completed “mega-projects” which were geared to exports went into production last year, beefing up the country’s export performance.
It says the value of manufactured goods as a percentage of overall exports rose to 29% last year, from 26% the previous year.
“All the other main export categories increased during 1996 … The improvement in export volumes of mining products could also have been influenced by the increasing price competitiveness of South African producers, albeit to a much lesser extent than in the case of the manufacturing sector.”