RICHARD THOMPSON, Johannesburg | Monday
The decline in the value of the rand — combined with free trade agreements and increased competitiveness of sectors of local industry — offered a great opportunity for South African exports, the government’s trade promotion agency said on Monday.
Portia Molefe, chief operating officer of Trade and Industry South Africa (Tisa, a division of the Department of Trade and Industry) said at a media conference in Johannesburg that exports for the period January to September 2001 totalled R185,2-billion, compared to R148,6-billion for the first nine months of 2000 – an increase of 25%.
Molefe urged local companies to seek out the export opportunities offered by the recent sharp fall in the dollar value of the rand.
”Our appeal to South African business is this: expand your horizons. The decline in the rand’s value, particularly against the dollar, is a massive opportunity — let us make best use of it.”
Molefe said in the past South Africa had mainly exported lower value primary products, but the value of manufactured exports was up by 28% in the first six months of 2001.
Exports of manufactured products totalled R143,8-billion from January to June 2001, compared to R112,2-billion in the first six months last year.
The free trade agreement with the European Union and the United States’ African Growth and Opportunity Act had facilitated these exports.
Molefe said Tisa had attracted foreign direct investment commitments totalling R4-billion in the six months to October 2001.
As much of this was investment in export production, the inflow would ultimately benefit exports.
In addition, probable investments totalling approximately R4,9-billion were in the pipeline.
Molefe said: ”… companies which are not currently exporting — and may never have thought of exporting — should now give it careful thought.”
The Department of Trade and Industry’s (DTI) services were there to support exporters.
South African Reserve Bank statistics showed the rand had declined to R8,6272 against the US dollar in September this year from R7,7714 in January 2001 and R6,1194 in January 2000. It is currently trading at around R10 to the dollar.
There were also disadvantages to the decline in the rand, Molefe said: the cost of imported capital goods increased. In the long run, exporters needed a stable currency.
Exports had played an increasingly important role in the South African economy since 1994.
Over this period exports had grown in real terms by 41% and their share of gross domestic product (GDP) had increased to 19% from 13,5%.
Monday’s media conference was a precursor to Wednesday’s presentation of the President’s Awards for Export Achievement, and the MTN/Business Day Technology Top 100 awards.
The awards recognise and encourage technological achievement and export performance by South African companies.
President Thabo Mbeki is scheduled to attend this year’s awards at Gallagher estate, which include for the first time an award for small and medium enterprises (SMEs).
”The winners are role models for all South African businesses, and particularly for exporters and potential exporters.
”We should all look very carefully at which companies have succeeded in the competitive global market and how they did it. There are lessons there for everyone,” Molefe said.
Companies competing for the awards manufactured products as diverse as yachts and catamarans, motor vehicle components, and satellite TV decoders. – Sapa