Taiwanese investment in South Africa was increasing for the first time since South Africa broke diplomatic ties with the East Asian state in January 1998, a seminar on Taiwanese investment in southern Africa heard on Thursday.
Several of the speakers at an event co-hosted by the African-Asian Society and the Taipei Liaison Office said the increase was motivated by a desire to benefit from the African Growth and Opportunity Act (Agoa).
The US law allows selected African countries to export a range of products into American markets duty and quota free.
As a result, Taiwanese investors were returning to South Africa, which they spurned immediately after the administration of former President Nelson Mandela broke relations with Taiwan to recognise Beijing instead.
”One of the best aids to export is in fact from the government of the United States, and by this, I refer to Agoa,” Michael Lin, a textile industrialist and president of the Taiwanese Chamber of Commerce in KwaZulu-Natal said.
The Eastern Cape Development Corporation’s Don Maclean said his province recognised the role played by Taiwanese investors in its economy and was actively wooing more foreign direct investment from there.
During a recent recruiting trip to Taipei he found strong interest in investing here in order to take advantage of Agoa.
”There is no discrimination against Taiwanese companies here,” he said, adding that goods made in Taiwanese-owned factories in South Africa qualified for Agoa discounts.
Du Ling, the head of the Taipei Liaison Office in South Africa, said Taiwanese entrepreneurs currently had investments in 620 businesses worth R1,5-billion and employing 41 000 people.
Turning to Swaziland, Du said ”an interesting fact to note is prior to the implementation of the Agoa in the year 2000, there were only three Taiwanese companies investing in Swaziland which employed a total number of 3 000 workers.
”However, after Agoa went into effect, in less than three years we saw the number climb to 20… employing a total of 20 000 employees. This trend continues to gain momentum,” Du said.
He added that because of Taiwanese investment, Lesotho had become Africa’s largest exporter of jeans.
”Agoa incentives, tax incentives and good relations with trade unions are responsible for the Taiwanese capital influx into Lesotho,” Du said.
”Lesotho has been Agoa-eligible and entitled to import cheaper fabric from third countries to increase its competitiveness. Secondly, the Lesotho manufacturers enjoy a low company tax of 15%, which is much lower than that in South Africa. Lastly, trade unions in Lesotho are not as sophisticated as those in South Africa. – Sapa