region East Africa Executive Summary Overview Investment Tourism

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1 region East Africa Executive Summary This regional fact sheet provides key trade and investment related statistics for East Africa. Specifically, it gives an overview of East Africa in terms of the economy, geography and demographics. In addition it shows East Africa s trade and investment figures and markets. The key highlights in the regional fact sheet are provided below: Overview The population of East Africa in 2013 was around million people. The average annual growth rate over the past decade is around 3.2%. The countries in East Africa belong to different regional groupings, the Southern African Development Community (SADC), the Common Market for Eastern and Southern Africa (COMESA) and the East African Community (EAC). The Gross Domestic Product (GDP) of East Africa in 2013 was around USD131.54bn in constant 2000 USD. Trade East Africa is a net importer of goods. Global East African exports were valued at ZAR379.6bn in 2013 compared to ZAR326.1bn in 2012, increasing by 16.4%. In 2013, Zambia exported 27.1% of East African exports valued at ZAR102.8bn, followed by with ZAR49.9bn (13.2%), Tanzania with ZAR42.4bn (11.2%) and Mozambique with ZAR38.6bn (10.2%). South Africa exported goods to East Africa valued at ZAR98.45bn in 2013 compared to ZAR78.23bn in 2012, representing an increase of 26%. The Western Cape exported goods to East Africa valued at ZAR11.5bn in 2013 compared to ZAR7.2bn in 2012, representing an increase of 60%. Investment The United Kingdom was the largest source market for inward FDI into East Africa accounting for 11.4% of projects. South Africa and India are ranked second and third accounting for 10.8% and 10.4% respectively. received most of the investment projects in East Africa (369), followed by Tanzania (193) and Uganda (178). Between January 2003 and July 2014 a total of 172 FDI projects were recorded from South Africa into East Africa. These projects represent a total capital investment of ZAR98.68bn A total of 12 FDI projects were recorded from East Africa to South Africa from 2003 to July A total of 12 FDI projects were recorded in this period. These projects represent a total capital investment of ZAR5.51bn. Tourism Arrivals from these East African nations into South Africa reached 3.56 million in 2013, growing by 5.7%. This made up around 52% of all African arrivals to South Africa. The total departures from South Africa to East Africa were 2.3 million in 2013, growing by 4.2% from In 2013 the East African country that attracted the most South African arrivals and departures was Zimbabwe.

2 1. General Overview East Africa is the easterly region of the African continent, defined by geography or geopolitics. In the UN scheme of geographic regions, 18 territories constitute the sub-region of East Africa, these are listed below: Tanzania,, Uganda, Rwanda and Burundi in Central East Africa, are also included in the African Great Lakes region and are members of the East African Community (EAC). Burundi and Rwanda are sometimes also considered to be part of Central Africa. Djibouti, Eritrea, Ethiopia and Somalia collectively known as the Horn of Africa. Comoros, Mauritius and Seychelles. Réunion and Mayotte. Mozambique and Madagascar often considered part of Southern Africa, on the eastern side of the sub-continent. Malawi, Zambia and Zimbabwe often also included in Southern Africa. The countries that make up East Africa belong to different regional blocs. The table below shows the countries in East Africa (italicised) that belong to the Southern African Development Community (SADC), the Common Market for Eastern and Southern Africa (COMESA) and the East African Community (EAC). SADC COMESA EAC African Union NAME REGIONAL BLOCS THAT INCLUDE EAST AFRICAN COUNTRIES MEMBER COUNTRIES Angola, Botswana, Democratic Republic of Congo (DRC), Lesotho, Malawi, Mauritius, Mozambique, Namibia, Seychelles, South Africa, Swaziland, Tanzania, Zambia, Zimbabwe. Angola, Burundi, Comoros, Democratic Republic of the Congo, Djibouti, Egypt, Eritrea, Ethiopia,, Madagascar, Malawi, Mauritius, Namibia, Rwanda, Seychelles, Sudan, Swaziland, Tanzania, Uganda, Zambia, Zimbabwe Burundi; ; Rwanda; Tanzania; Uganda 54 African States Source: WTO, 2014 Note: the countries in italics belong to the East African sub-region 2 The tripartite Free Trade Agreement (FTA) is currently under review by member states and will build on the FTAs that are already in place in COMESA, EAC and SADC. The tripartite FTA is intended to cover all 26 tripartite countries. This joins many of the East African countries to other regions, strengthening regional trade and investment. The population of East Africa in 2013 was around million people. The average annual growth rate over the past decade is around 3.2%, more than double the current global growth rate of 1.14% per annum. Ethiopia is ranked as the thirteenth largest country by population with around 94 million people. The graph below shows the population in East Africa, broken down by country, from 2004 to 2013.

3 Life Expectancy (years) Population (million) POPULATION OF EAST AFRICA, Zimbabwe Zambia Mozambique Mauritius Malawi Madagascar Tanzania Somalia Seychelles Rwanda Ethiopia Eritrea Djibouti Comoros Burundi Uganda Source: AFDB, 2014 Socio-economic indicators for East Africa include the Human Development Index (HDI) and the average life expectancy in the region. The HDI is a composite statistic of life expectancy, education, and income indices used to rank countries into four tiers of human development. The East African country with the best HDI ranking in 2012 was the smallest African state, the Seychelles with an HDI of (46th), moving up 6 places from Mauritius also had a global ranking in the top 100 countries, however all other East African countries are in the bottom third of the HDI rankings. HDI GLOBAL RANKING OF EAST AFRICAN COUNTRIES COUNTRY CHANGE IN RANKING Seychelles Mauritius South Africa Madagascar Tanzania Uganda Zambia Djibouti Rwanda Comoros Malawi Zimbabwe Ethiopia Burundi Eritrea Mozambique The average life expectancy of people in East Africa has been increasing by approximately one year per annum from 2004 to However, the average in East Africa is still nine years below the global average (70yrs) in AVERAGE LIFE EXPECTANCY IN EAST AFRICA, Life Expectancy Source: AFDB,

4 GDP Value (USDbn) 2. Economic Overview GDP (constant 2005 prices) (2013) ECONOMIC INFORMATION USD131.54bn GDP growth (constant 2005 prices) (2013) 4.86% Exports (2013) Imports (2013) Inward FDI (2003-July 2014) Outward FDI (2003-July 2014) Source: Statistics SA 2014; Quantec, 2014 ZAR379.6bn ZAR852.0bn ZAR1.033trn ZAR131.72bn The real GDP growth of East Africa is presented in the graph below. The Gross Domestic Product (GDP) of East Africa in 2013 was around USD131.54bn in constant 2000 USD. The trend-line shows that on average the GDP growth of East Africa increases at around 0.036% per year on an average 4.8% growth. The highest GDP growth by country was seen in Ethiopia (9.72%), followed by Mozambique (7%) and Tanzania (6.96%). The average GDP was brought down by countries such as Eritrea (1.14%) and Madagascar (2.59%). GDP GROWTH (%) IN EAST AFRICA, Source: AFDB, Total GDP (USD bn) 75,8 80,8 86,1 92,2 97,5 102,2 111,5 117,2 123,9 131,5 GDP Growth (%) 4,43 5,12 5,55 5,57 3,61 4,18 5,76 6,10 4,87 4, Growth (%) 4 Tanzania and Ethiopia had the largest GDP in East Africa valued at USD24bn each in The third largest GDP in the region was in valued at USD22bn and the fourth largest was Uganda valued at USD14.24bn. The table below shows the GDP of East Africa, broken down by country, from 2004 to EAST AFRICA GDP PER COUNTRY, (CONSTANT 2000 USDBN), Tanzania Ethiopia Uganda Mozambique Mauritius Zambia Madagascar Zimbabwe Rwanda Malawi

5 EAST AFRICA GDP PER COUNTRY, (CONSTANT 2000 USDBN), Burundi Seychelles Djibouti Eritrea Comoros Source: AFDB, Transport and Infrastructure Africa's flagship trade and logistics corridor, the North-South Corridor, has achieved international recognition winning two awards at the Global Infrastructure Leadership Forum held in New York. It won the Strategic Project of the Year award and the Job Creation Project of the Year. The award testifies to the importance of the North- South Corridor in driving regional integration in the 26 countries in the Tripartite (EAC-COMESA-SADC) with their combined population of 600 million. The USD11bn corridor consists of more than kilometres of road across eight countries in southern and eastern Africa. The North-South Corridor links the port of Durban to the Copperbelt in DRC and Zambia. In addition, spurs link the port of Dar es Salaam with the Copperbelt and link Durban to Malawi (TradeMark SA, 2014). 5 The Northern corridor, pictured below, is the transport corridor linking the land locked countries of Uganda, Rwanda and Burundi with s maritime port of Mombasa. Similarly, the Northern Corridor serves the eastern part of the Democratic Republic of Congo, southern Sudan and northern Tanzania. The Northern Corridor infrastructure connects all the five countries of the East African Community and links around 200 million people to global markets through the Mombasa port.

6 Source: Northern Corridor Transit and Transport Coordination Authority, 2014 The major ports in East Africa include Mombasa, Dar es Salam and Tanga. TradeMark East Africa (2013) data shows that year-on-year growth in port traffic since 2008 was 8% at Mombasa (), 13% at Dar es Salaam and 7% at Tanga (Tanzania). In light of this rapid growth many East African states and Asian investors have provided funding for infrastructure upgrades in the region. 6 In terms of port upgrades, is spending USD366m to construct a new container terminal in Mombasa that will more than double the capacity of the current port, from handling 900, foot equivalent unit (TEU) containers to 2,1 million containers (Financial Mail, 2013). A new terminal is also being built on land reclaimed from the sea by Japan Ports Consultants, with the third phase expected to be completed in The new terminal will enable the country to handle larger vessels. China is financing the USD11bn Bagamoyo port in Tanzania. This port is expected to handle 20 million containers a year, more than the total handled by Dar es Salaam and Mombasa. The China Merchant Group is funding the construction of the USD70m Damerjog livestock port and the USD400m Doraleh port in Djibouti. In 2012, Djibouti Ports & Free Zones Authority also announced it was negotiating the financing of USD4,4bn to build five new airports by According to the UN Conference on Trade & Development, Djibouti has overtaken its neighbours and has become an important trans-shipment centre, connecting east-west trade services with feeder services from east and southern Africa.

7 Value (ZARbn) 4. Trade profile 4.1 East African global trade The figure below illustrates the trend in East Africa s global trade from 2009 to East Africa is a net importer of goods. Global East African exports were valued at ZAR379.6bn in 2013 compared to ZAR326.1 in 2012, increasing by 16.4%. Global imports by East Africa in 2013 were valued at ZAR852bn compared to ZAR707 in 2012, increasing by 20.5%. Source: TradeMap, EAST AFRICAN GLOBAL TRADE, Exports (ZARbn) 205,1 225,9 277,2 326,1 379,6 Imports (ZARbn) 445,0 461,4 583,2 707,2 852,0 Trade Balance (ZAR bn) -239,9-235,5-306,0-381,0-472,4 In 2013, Zambia exported 27.1% of East African exports valued at ZAR102.8bn. Zambia was followed by with ZAR49.9bn (13.2%), Tanzania with ZAR42.4bn (11.2%) and Mozambique with ZAR38.6bn (10.2%). The largest importing country in East Africa is, importing ZAR155.7bn (18.2%), followed by Tanzania importing ZAR120.3bn (14.1%) and Zambia importing ZAR98.6bn (11.6%). South Africa s exports are more than double all of East Africa s exports (ZAR788bn). Western Cape exports fall between Zambian exports and n exports (ZAR74bn). South African imports (ZAR971bn) are greater than those of East Africa (ZAR852bn). The Western Cape imports more than the individual countries in East Africa, importing around ZAR30bn more than. 7 RANK TOP 10 EAST AFRICAN EXPORTERS, 2013 TOP 10 EAST AFRICAN IMPORTERS, 2013 COUNTRY VALUE 2013 % GROWTH RANK COUNTRY VALUE 2013 % GROWTH South Africa South Africa Zambia Western Cape Western Cape Tanzania Tanzania Zambia Mozambique Mozambique Zimbabwe Zimbabwe Uganda Ethiopia Mauritius Uganda Madagascar Mauritius Ethiopia Madagascar Malawi Malawi TOTAL EAST AFRICAN EXPORTS TOTAL EAST AFRICAN IMPORTS Source: TradeMap, 2014

8 The table below shows East Africa s top 10 traded products for Refined copper was the leading export product category, valued at ZAR63.4bn, a 28% increase from 2012 figures. Gold ranked second and tobacco third valued at ZAR23.88bn and ZAR20.15bn respectively. Other top exports are coffee (ZAR14.35bn), tea (ZAR11.50bn) and petroleum oils (ZAR11.32bn). Crude petroleum oils were also the leading imported product in East Africa in 2013, valued at ZAR153.38bn, a 15% increase from 2012 figures. Cars and medicaments were ranked second and third at ZAR22.85bn and ZAR20.45bn respectively. Copper and copper concentrates had the highest growth from 2012 to 2013 of 92% followed by rice at 11%. RANK TOP 10 PRODUCTS EXPORTED BY EAST AFRICA, 2013 TOP 10 PRODUCTS IMPORTED BY EAST AFRICA, 2013 PRODUCT Refined copper and copper alloys, unwrought Gold unwrought or in semimanufactured forms Tobacco unmanufactured; tobacco refuse VALUE 2013 (ZARbn) % GROWTH RANK PRODUCT VALUE 2013 (ZARbn) % GROWT H Petroleum oils, not crude Cars (incl. station wagon) Coffee Tea Medicament mixtures (not 3002, 3005, 3006), put in dosage Trucks, motor vehicles for the transport of goods Mixtures of nitrogen, phosphorous or potassium fertilizers Petroleum oils, not crude Copper ores and concentrates Aluminium bars, rods and profiles Wheat and meslin Cane or beet sugar and chemically pure sucrose, in solid form Cut flowers and flower buds for bouquets, fresh or dried Electric app for line telephony, incl, current line system Palm oil & its fraction Prepared/preserved fish & caviar Rice TOTAL EXPORTS TOTAL IMPORTS Source: TradeMap, 2013 The top products (HS6) exported by the top markets are shown below: 8 Zambia Copper cathodes and sections of cathodes unwrought (ZAR45.4bn) Other refined copper products, unwrought (ZAR15.5bn) Electrical energy (ZAR3.1bn) Sulphuric acid; oleum (ZAR2.4bn) Copper alloys, unwrought (other than master alloys of heading No 74.05) (ZAR2.2bn) Black tea (fermented) & partly fermented tea in packages exceeding 3 kg (ZAR8.2bn) Other petroleum oils and preparations (ZAR5.4bn) Fresh cut roses and buds, of a kind suitable for bouquets or for ornaments (ZAR5.2bn) Coffee, not roasted, not decaffeinated (ZAR2.0bn) Light petroleum oils and preparations (ZAR1.5bn) Tanzania Gold in unwrought forms non-monetary (ZAR8.7bn) Gold in other semi-manufactured form n-monetary (ZAR6.1bn) Other precious metal ores and concentrates (ZAR2.9bn) Cashew nuts, in shell, fresh or dried (ZAR1.6bn) Coffee, not roasted, not decaffeinated (ZAR1.5bn)

9 Mozambique Bars, rods and profiles, aluminium, not alloyed (ZAR10.2bn) Coke and semi-coke of coal, lignite or peat (ZAR5.1bn) Natural gas in gaseous state (ZAR2.7bn) Electrical energy (ZAR2.6bn) Tobacco, unmanufactured, partly or wholly stemmed or stripped (ZAR2.4bn) Zimbabwe Tobacco, unmanufactured, partly or wholly stemmed or stripped (ZAR8.3bn) Gold in other semi-manufactured form non-monetary (ZAR4.8bn) Nickel mattes (ZAR3.9bn) Nickel ores and concentrates (ZAR3.1bn) Diamonds industrial unworked or simply sawn, cleaved or bruted (ZAR1.8bn) The top products (HS6) imported by the top markets are shown below: Other petroleum oils and preparations (ZAR21.0bn) Light petroleum oils and preparations (ZAR7.2bn) Commodities not elsewhere specified (ZAR4.4bn) Other Hot roll iron/steel, coil >600mm x <3mm (ZAR3.1bn) Other Medicaments, in dosage (ZAR2.9bn) Tanzania Other petroleum oils and preparations (ZAR33.9bn) Light petroleum oils and preparations (ZAR10.9bn) Wheat and meslin (ZAR2.9bn) Other tubes, pipe & hollow profiles, iron or steel, welded (ZAR1.9bn) Road tractors for semi-trailers (ZAR1.6bn) 9 Zambia Copper ores and concentrates (ZAR13.5bn) Other petroleum oils and preparations (ZAR5.7bn) Light petroleum oils and preparations (ZAR5.1bn) Structures & parts of structures (ZAR2.8bn) Cobalt oxides and hydroxides; commercial cobalt oxides (ZAR2.1bn) Mozambique Other petroleum oils and preparations (ZAR15.3bn) Gas or smoke analysis apparatus (ZAR9.3bn) Butanes, liquefied (ZAR5.5bn) Aluminium unwrought, not alloyed (ZAR4.7bn) Light petroleum oils and preparations (ZAR4.5bn) Zimbabwe Other petroleum oils and preparations (ZAR10.1bn) Fertilizers nes, in packages not exceeding 10 kg (ZAR8.9bn) Light petroleum oils and preparations (ZAR4.4bn) Diesel powered trucks with a GVW not exceeding five tonnes (ZAR1.6bn) Automobiles of a cylinder capacity exceeding 1500 cc but not exceeding 3000 cc (ZAR1.1bn)

10 Value (ZARbn) 4.2 Trade with South Africa The figure below shows trade between South Africa and East Africa for the period 2006 to From 2006 to 2013, South Africa had a trade surplus with East Africa, with exports exceeding imports. South Africa exported goods to East Africa valued at ZAR98.45bn in 2013 compared to ZAR78.23bn in 2012, representing an increase of 26%, while imported goods were valued at ZAR24.19bn in 2013 compared to ZAR20.66bn in 2012, increasing by 17%. Source: Trademap, SOUTH AFRICAN TRADE WITH EAST AFRICA, Exports (ZARbn) 25,94 30,41 32,59 41,83 64,45 59,09 78,23 98,45 Imports (ZARbn) 8,08 12,59 14,36 8,60 9,47 16,10 20,66 24,19 Trade Balance (ZARbn) 17,86 17,82 18,23 33,23 54,98 42,99 57,57 74,26 The leading export product from South Africa to East Africa was refined petroleum oil valued at ZAR5.5bn, followed by motor vehicles for the transport of goods (ZAR4.96bn) and electrical energy (ZAR2.74bn). The major exports are seen to support the growing demand for energy, logistics and construction in East Africa. In 2013 there was high growth in the export of refined petroleum oil (147.91%) and mineral or chemical fertilizers (139.91%). The leading import product from East Africa was refined petroleum oil valued at ZAR5bn, followed by petroleum gases (ZAR2.6bn) and crude petroleum (ZAR2.4bn). The largest growth in imports was seen for precious metal ores and concentrates, which grew by 51.16%. 10 RANK 1 2 TOP 10 SOUTH AFRICAN EXPORTS TO EAST AFRICA, 2013 TOP 10 SOUTH AFRICAN IMPORTS FROM EAST AFRICA, 2013 PRODUCT Oils petroleum, bituminous, distillates, except crude Motor vehicles for the transport of goods VALUE 2013 % GROWTH RANK Electrical energy Hot-rolled products, iron/steel, width>600mm, not clad Coal, briquettes, ovoids etc., made from coal Structures, parts of structures of iron or steel, nes Mineral or chemical fertilizers, nitrogenous Solid cane or beet sugar and chemically pure sucrose Parts for use with lifting, moving machinery Machinery to sort, screen, wash, etc. mineral products PRODUCT Oils petroleum, bituminous, distillates, except crude Petroleum gases and other gaseous hydrocarbons Petroleum oils, oils from bituminous minerals, crude VALUE 2013 % GROWTH Electrical energy Precious metal ores and concentrates Refined copper and copper alloys, unwrought T-shirts, singlets and other vests, knit or crochet Cotton, not carded or combed Copper wire Men s or boys suits, jackets, trousers etc. not knit TOTAL EXPORTS TOTAL IMPORTS Source: TradeMap, 2014

11 Value (ZARbn) South Africa s top East African country with which it trades is Mozambique, which receives the highest exports (ZAR26.6bn) and the highest imports (ZAR12.3bn). Zambia and Zimbabwe are the second and third largest trading partners in East Africa, receiving ZAR24.6bn and ZAR22.3bn in South African exports and importing ZAR3.6bn and 3.3bn to South Africa. RANK TOP 10 SOUTH AFRICAN EXPORTS, 2013 TOP 10 SOUTH AFRICAN IMPORTERS, 2013 COUNTRY VALUE 2013 % GROWTH RANK COUNTRY VALUE 2013 % GROWTH Mozambique Mozambique Zambia Zambia Zimbabwe Zimbabwe Mauritius Malawi Madagascar Tanzania Tanzania Mauritius Malawi Uganda Madagascar Ethiopia Ethiopia Uganda TOTAL EXPORTS TOTAL IMPORTS Source: Trademap, Trade with the Western Cape The figure below shows trade between the Western Cape and East Africa from 2006 to The province exported goods to the value of ZAR11.5bn in 2013 compared to ZAR7.2bn in 2012, representing an increase of 60%, while imported goods were valued at ZAR5.8bn in 2013 compared to ZAR5.4bn in 2012, increasing by 7.5%. Over the period, the Western Cape has demonstrated a positive trade balance with East Africa. The positive trade balance is likely to continue into the future as exports were double imports in The Western Cape exports to East Africa make up 15.5% of total Western Cape exports and they comprise 61.2% of Western Cape exports to all African countries. 11 WESTERN CAPE TRADE WITH EAST AFRICA, Exports (ZARbn) 3,86 4,00 7,04 6,19 5,08 6,15 7,17 11,50 Imports (ZARbn) 0,29 0,70 0,95 0,83 0,79 1,78 5,42 5,82 Trade Balance (ZARbn) 3,57 3,30 6,09 5,37 4,29 4,36 1,76 5,68 Source: Quantec, The table below shows the top 10 traded products between the Western Cape and East Africa in Refined petroleum oil was the leading export product category to East Africa from the Western Cape in 2013, valued at

12 ZAR2.8bn, with a growth of 393%. This top export was followed by iron or steel hot rolled products (ZAR2bn) and sulphur (ZAR587m). Major exports consist of agri-business products, energy and construction related products. There was a 207% growth in the export of fertilizers (ranked 6 th ) from 2012 to Top valued imports include refined petroleum oil (ZAR1.6bn), men s suits, jackets and trousers that is not knit (ZAR304m) and T-shirts both knit and crochet (ZAR261m). Imported products consist mainly of clothing and energy products. The highest growth in imports from 2012 to 2013 was seen for women s suits, jackets, dresses and skirts, which grew by 65%. RANK TOP 10 WESTERN CAPE EXPORTS TO EAST AFRICA, 2013 TOP 10 WESTERN CAPE IMPORTS FROM EAST AFRICA, 2013 PRODUCT Oils petroleum, bituminous, distillates, except crude Hot-rolled products, iron/steel, width>600mm, not clad Sulphur, except sublimated, precipitated, colloidal Grape wines(including fortified), alcoholic grape must Fruit and vegetable juices, not fermented or spirited Fertilizer mixtures in packs of < 10kg VALUE 2013 % GROWTH RANK PRODUCT Oils petroleum, bituminous, distillates, except crude Men s or boys suits, jackets, trousers etc not knit T-shirts, singlets and other vests, knit or crochet Jerseys, pullovers, cardigans, etc., knit or crochet VALUE 2013 % GROWTH Men's or boys' shirts Oil-cake other than soya-bean or groundnut Apples, pears and quinces, fresh Other knitted or crocheted fabrics Sauce, condiments, mixed seasoning and mustard Bitumen, asphalt, oil shales, tar sands, asphaltites Industrial food and drink preparation machinery nes Women s, girls suits, jacket, dress, skirt, etc., woven Men s, boys shirts, knit or crochet Women s or girls' blouses, shirts and shirt-blouses TOTAL EXPORTS TOTAL IMPORTS Source: Quantec, 2014 The East African country with the highest share of Western Cape exports is Mozambique (34%), followed by (20%). These two countries make up more than 50% of the East African exports from the Western Cape, and their GDP growth is at 7% and 6% respectively. Zambia is the third largest export market in East Africa with an 18% share. 12

13 EAST AFRICAN COUNTRIES SHARE OF WESTERN CAPE EXPORTS, Réunion Seychelles Uganda Malawi Mauritius Tanzania Zimbabwe 1% 1% 1% 2% 5% 6% 12% Zambia Mozambique 18% 20% 34% Mozambique Zambia Zimbabwe Tanzania Mauritius Malawi Uganda Seychelles Réunion ,0 1389,8 1523,9 1010,0 504,0 538,3 197,2 100,9 123,0 111, ,1 2286,6 2004,4 1329,9 676,4 599,8 280,2 107,4 102,5 98,9 Source: Quantec, 2014 Western Cape exports to East African markets are categorised in the table below. The highest value importer in East Africa of Western Cape products is Mozambique, with a 19% share of Western Cape exports to Africa and 5% of total Western Cape exports (ZAR3,779m). was the second largest East African importer, with 12.1% share of Western Cape exports to Africa and a 3.1% share of total Western Cape exports (ZAR2,286m). Total exports to East Africa from the Western Cape equate to 61.2% of exports to Africa and 15.5% of total exports to all nations from the Western Cape. 13 RANK TOP 10 WESTERN CAPE EXPORT MARKETS IN EAST AFRICA, 2013 IMPORTERS VALUE 2013 % SHARE OF SA EXPORTS %SHARE OF WC EXPORTS % SHARE OF WC EXPORTS TO AFRICA 1 Mozambique % 5.0% 19.0% % 3.1% 12.1% 3 Zambia % 2.7% 10.6% 4 Zimbabwe % 1.8% 7.0% 5 Tanzania % 0.9% 3.6% 6 Mauritius % 0.8% 3.2% 7 Malawi % 0.4% 1.5% 8 Uganda % 0.1% 0.6% 9 Seychelles % 0.1% 0.5% 10 Reunion % 0.1% 0.5% TOTAL EXPORTS % 15.5% 61.2% Source: Quantec, 2014

14 The top products exported from the Western Cape to the top 5 East African importers are listed below. Refined petroleum oil and fruit and vegetable juice are in the top export products for more than two of the top importers from East Africa. Mozambique Refined petroleum oil (ZAR2.6bn) Tobacco (ZAR87m) Fish (ZAR56m) Sauce, condiments, seasoning, mustard (ZAR50m) Fruit & veg juice (ZAR49m) Wines (ZAR33m) Furniture (ZAR25m) Zambia Products of iron/steel (ZAR1.6bn) Grape wines (ZAR93m) Apples, pears (ZAR73m) Bitumen, asphalt, oil shales (ZAR57m) Instruments for medical, surgical, dental use (ZAR28m) Polymers of styrene (ZAR15m) Industrial food and drink preparation machinery (ZAR12m) Sulphur (ZAR587m) Fertilizer (ZAR130m) Refined petroleum oil (ZAR110m) Natural magnesium carbonate (ZAR89m) Prepared explosives (ZAR56m) Products of iron and steel (ZAR52m) Fruit and vegetable juice (ZAR43m) 14 Zimbabwe Fertilizer (ZAR124m) Refined petroleum oil (ZAR54m) Fruit and vegetable juice (ZAR47m) Tanzania Products of iron and steel (ZAR330m) Wines (ZAR49m) Fruit and vegetable juice (ZAR29m) Apples, pears and quinces (ZAR25m)

15 4.4 Trade Agreements South Africa engages in trade agreements with East Africa through its membership of the Southern Africa Development Community (SADC). The SADC Free Trade Area (FTA) was initiated in 2000; its 12 members include the SACU countries, Mauritius, Zimbabwe, Madagascar, Malawi, Mozambique, Tanzania, and Zambia. The only East African country that is not yet participating in the FTA is the Seychelles. In October 2008, SADC joined with the Common Market for Eastern and Southern Africa and the East African Community to form the African Free Trade Zone, including all members of each of the organizations. The African Free Trade Zone, consists of 26 countries with a GDP of an estimated USD624bn. 4.5 Port-to-Port The table below shows the distance and time it takes goods to travel from Cape Town Port terminal to the busiest ports in East African Countries. TRANSIT TIME FROM CAPE TOWN TERMINAL TO THE BUSIEST PORTS IN EAST AFRICA, 2013 COUNTRY TERMINAL DISTANCE TRANSIT TIME Mombassa 4712km 7 days 13 hours Tanzania Dar es salam 4463km 7 days 4 hours Mozambique Beira 2832km 4 days 13 hours Djibouti Djibouti 7636km 12 days 6 hours Source: SeaRates, Trading Across Borders The East African country with the highest ranking in trading across borders was Mauritius (17 th ), followed by the Seychelles (42 th ) and Djibouti (56 th ). 15 COUNTRY TRANSIT TIME FROM CAPE TOWN TERMINAL TO THE BUSIEST PORTS IN EAST AFRICA, 2013 DOCUMENTS TO EXPORT (NUMBER) TIME TO EXPORT (DAYS) COST TO EXPORT (US$ PER CONTAINER) DOCUMENTS TO IMPORT (NUMBER) TIME TO IMPORT (DAYS) COST TO IMPORT (US$ PER CONTAINER) Mauritius Seychelles Djibouti South Africa , , Madagascar , , Mozambique , , Tanzania , , Comoros , , , , Uganda , , Rwanda , , Ethiopia , , Burundi , , Malawi , , Eritrea , , Zambia , , Zimbabwe , , Source: Cost of Doing Business, 2014 RANK

16 Value (ZARbn) 5. Foreign Direct Investment 5.1 Global Foreign Direct Investment into East Africa The figure below shows the inward FDI into East Africa for the period January 2003 to July In this period a total of 1,592 FDI projects were recorded. These projects represent a total capital investment of ZAR1 033bn which is an average investment of ZAR649.12m per project. During the period, a total of jobs were created. The graph shows that capex into East Africa peaked in 2008 (ZAR130bn) and 2011 (ZAR189bn), prior to the global financial crisis and the double dip recession. The highest number of projects were recorded in 2013 (244 projects) and if the trend established in 2014 continues then projets are likely to peak in INWARD FDI INTO EAST AFRICA, 2003-JULY Projects Capex (ZARbn) 42,36 31,56 41,31 38,23 59,24 129,93 68,41 124,54 189,44 80,85 132,75 94,38 Projects The figures below show global inward FDI into East Africa by sector, for the period January 2003 to July 2014 by number of projects and capex. Financial services and communications accounted for 21% and 11% of FDI projects respectively. In terms of capex, the coal, oil and natural gas sector and the metals sector received 30% and 20% respectively. Other sectors 31% INWARD FDI INTO EAST AFRICA BY SECTOR (PROJECTS), JAN 2003-JULY 2014 Financial Services 21% Communi cations 11% INWARD FDI INTO EAST AFRICA (CAPEX), JAN 2003-JULY 2014 Financial Services 2% Food & Tobacco 3% Chemicals 2% Other Sectors 15% Coal, Oil and Natural Gas 30% Beverages 3% Software & IT services 3% Transportation 4% Coal, Oil and Natural Gas 5% Metals 8% Food & Tobacco Business 7% Services 7% Building & Construction Materials 4% Alternative/Rene wable energy 6% Communications 8% Real Estate 10% Metals 20% Source: FDI Intelligence, 2013

17 The United Kingdom was the largest source market for inward FDI into East Africa in terms of projects, with 181 investment projects, which accounted for 11.4% of projects. South Africa and India are ranked second and third accounting for 10.8% and 10.4% respectively. The top 10 source countries for investment into East Africa include two African countries ( and South Africa) and two emerging markets (India and China). TOP 10 SOURCE MARKETS FOR FDI INTO EAST AFRICA, 2003 JULY 2014 RANK COUNTRY PROJECTS %PROJECTS CAPEX % CAPEX COMPANIES % COMPANIES 1 United Kingdom South Africa India United States China UAE Canada Japan Germany Other Countries TOTAL When breaking the investment down to the destination countries in East Africa, received the most projects (369), followed by Tanzania (193) and Uganda (178). In terms of capex, Mozambique received the bulk of investment (27.8%) followed by Uganda (11.2%) and Zambia (11.1%). TOP 10 DESTINATION MARKETS FOR FDI INTO EAST AFRICA, 2003 JULY 2014 RANK COUNTRY PROJECTS %PROJECTS CAPEX % CAPEX Tanzania Uganda Mozambique Zambia Ethiopia Rwanda Zimbabwe Mauritius Madagascar other countries TOTAL The top investing company into East Africa was Commercial Bank, investing in 13 projects to the value of ZAR794m. This was followed by the United Bank for Africa from Nigeria with 12 projects.

18 Value TOP INVESTING COMPANIES INTO EAST AFRICA, JULY 2014 RANK INVESTING COMPANY COUNTRY OF ORIGIN PROJECTS CAPEX 1 Commercial Bank (KCB) United Bank for Africa (UBA) Nigeria Bharti Airtel India Ecobank Transnational Togo Bank of Baroda India Coca-Cola United States KCB Bank Uganda Uganda Nakumatt Holdings First Quantum Minerals Canada Uchumi Supermarkets Global Foreign Direct Investment from East Africa Between January 2003 and July 2014 a total of 329 FDI projects were recorded from East Africa. These projects represent a total capital investment of ZAR131.72bn which is an average investment of ZAR400.41m per project. During the period, a total of jobs were created. OUTWARD FDI FROM EAST AFRICA, JULY Projects Capex 2 264,4 77,2 500,2 715, , , 8 547, , , 9 976, , , Projects The table below shows the destination markets for outward FDI from East Africa for the period January 2003 to July Uganda was the largest destination market in terms of projects, with 56 investment projects, which accounted for 17% of all projects. Rwanda and South Sudan are ranked second and third accounting for 14.3% and 11.6% respectively. Six out of the top ten destination markets are fellow East African countries.

19 TOP 10 DESTINATION MARKETS FOR FDI OUT OF EAST AFRICA, 2003 JULY 2014 RANK COUNTRY PROJECTS % PROJECTS CAPEX % CAPEX COMPANIES % COMPANIES 1 Uganda Rwanda South Sudan Tanzania Nigeria India Burundi South Africa Mozambique Other Countries TOTAL The figures below show East Africa s global outward FDI by sector, for the period January 2003 to July 2014 by number of projects and capex. Financial services received the largest share of FDI from East Africa in terms of projects accounting for 43%, followed by food and tobacco and communications accounting for 13% and 7% respectively. Communications received the highest percentage of total capex, accounting for 32%, followed by the coal, oil and natural gas sector and financial services sector accounting for 31% and 8% respectively. OUTWARD FDI FROM EAST AFRICA BY SECTOR (PROJECTS), JULY 2014 OUTWARD FDI FROM EAST AFRICA (CAPEX), 2003-JULY Building & Construction Materials 2% Coal, Oil and Natural Gas 3% Hotels & Tourism 3% Textiles 4% Software & IT services 7% Transportation 2% Communic ations 7% Other Sectors 16% Food & Tobacco 13% Financial Services 43% Building & Construction Materials 3% Transportation 3% Hotels & Tourism 4% Software & IT services 5% Food & Tobacco 6% Financial Services 8% Real Estate 2% Other Sectors 6% Communi cations 32% Coal, Oil and Natural Gas 31% The top company investing globally from East Africa was Commercial Bank, with 32 projects (9.73%). The second largest investing company was Comcraft Group investing in 18 projects (5.47%). Seven out of the top 10 investing companies are located in. Four of the top 10 investing companies are in the financial services sector.

20 Value TOP 10 COMPANIES INVESTING FROM EAST AFRICA (BY PROJECTS), 2003-JULY 2014 RANK COMPANY NAME SECTOR SOURCE COUNTRY SOURCE STATE NO. OF PROJECTS % PROJECTS 1 Commercial Bank (KCB) Financial Services Nairobi Area % 2 Comcraft Group Software & IT services Nairobi Area % 3 UST Global Software & IT services Nairobi Area % 4 Equity Bank Financial Services Nairobi Area % 5 Seacom Communications Mauritius Mauritius % 6 Uchumi Supermarkets Food & Tobacco Nairobi Area % 7 KCB Bank Uganda Financial Services Nairobi Area % 8 Nakumatt Holdings Food & Tobacco Nairobi Area % 9 Exim Bank (Tanzania) Financial Services Tanzania Dar es Salaam % 10 Liquid Telecom Communications Mauritius Mauritius % 5.3 Foreign Direct Investment relations between South Africa and East Africa Outward Investment from South Africa into East Africa Between January 2003 and July 2014 a total of 172 FDI projects were recorded from South Africa into East Africa. These projects represent a total capital investment of ZAR98.68bn which is an average investment of ZAR573.96m per project. During the period, a total of 24,530 jobs were created. The highest FDI value in terms of capex was recorded in 2011, with ZAR24.5bn. The highest number of projects were recorded in 2013, with 31. In the first half of 2014, FDI capex has already reached a high of ZAR20.3bn SOUTH AFRICAN FDI INTO EAST AFRICA, 2003-JULY Capex 5 117, , , , , , , , , , , ,3 Projects Project The figures below show South Africa s outward FDI to East Africa by sector, for the period January 2003 to July 2014 by projects and capex. Financial services received the largest share of FDI from South Africa in terms of projects accounting for 20%, followed by communications and business services accounting for 16% and 10% respectively. Coal, oil and natural gas received the highest percentage of total capex, accounting for 40%, followed by real estate and communications accounting for 27% and 10% respectively.

21 OUTWARD FDI (PROJECTS) FROM SOUTH AFRICA TO EAST AFRICA, 2003-JULY 2013 OUTWARD FDI (CAPEX) FROM SOUTH AFRICA TO EAST AFRICA, 2003-JULY 2013 Consumer Products 5% Metals 5% Software & IT services 3% Coal, Oil and Natural Gas 5% Real Estate 8% other sectors 19% Food & Tobacco 9% Financial Services 20% Communications 16% Business Services 10% Financial Services 3% Food & Tobacco 3% Metals 9% Communi cations 10% Consumer Products 2% Real Estate 27% Minerals 1% Chemicals 1% Other sectors 4% Coal, Oil and Natural Gas 40% The table below shows the companies that invested from South Africa into East Africa during the period under review. The companies with more than 5 projects each are telecoms giant MTN with 7 projects, Pick n Pay with 6 projects and First National Bank (FNB) Tanzania and FNB Zambia, with 6 projects each. The highest overall capex was invested by Atterbury Property Developments with an investment of ZAR23.6bn. COMPANIES INVESTING FROM SOUTH AFRICA INTO EAST AFRICA, JULY 2014 INVESTING COMPANY PROJECTS CAPEX JOBS CREATED DESTINATION COUNTRIES MTN Uganda Uganda Pick n Pay Zambia Malawi Mauritius First National Bank Tanzania Tanzania First National Bank Zambia Zambia Altech Group Woolworths (South Africa) Atterbury Property Developments Broll Property Group Uganda Rwanda Tanzania Burundi Mauritius Uganda Tanzania Mozambique Mauritius Madagascar Rwanda Mauritius 21 Shoprite Momentum TOTAL Mozambique Malawi Uganda Zambia Tanzania Mauritius

22 The table below shows FDI from East Africa to South Africa from 2003 to July A total of 12 FDI projects were recorded in this period. These projects represent a total capital investment of ZAR5.51bn which is an average investment of ZAR459.17m per project. During the period, a total of 1,368 jobs were created. Four of the twelve investments were made by AfrAsia bank from Mauritius into the retail banking sector. It was also the only company to invest into the Western Cape, investing around ZAR75.2m into launching an office in Cape Town. This office, together with those in Johannesburg and Durban will facilitate business, investment, banking services and trade flows between India and South Africa. Setting up offices in South Africa is the beginning of the bank's African regional expansion drive. PROJECT DATE Mar 2014 Mar 2013 INVESTING COMPANY Liquid Telecom Econet Wireless Zimbabwe SOURCE COUNTRY EAST AFRICA S FDI TO SOUTH AFRICA, JULY 2014 DESTINATION STATE INDUSTRY SECTOR Mauritius Not Specified Communications Zimbabwe Johannesburg Communications Mar 2012 Safal Steel Mauritius Durban Metals Feb 2012 Techno Brain Tanzania Johannesburg Aug 2011 Athi River Mining Not Specified Jul 2011 AfrAsia Bank Mauritius Johannesburg Mar 2011 AfrAsia Bank Mauritius Durban Feb 2010 AfrAsia Bank Mauritius Cape Town Feb 2010 AfrAsia Bank Mauritius Johannesburg Software & IT services Building & Construction Materials Financial Services Financial Services Financial Services Financial Services Aug 2009 Seacom Mauritius Not Specified Communications Jun 2008 Oct 2003 Africa Sun (Zimbabwe Sun Limited) Midron Enterprises Zimbabwe Johannesburg Hotels & Tourism Zimbabwe Not Specified Textiles Footwear SUB-SECTOR Satellite telecommunications Wireless telecommunication carriers Coating, engraving, heat treating, & allied activities Software publishers, except video games Cement & concrete products INDUSTRY ACTIVITY ICT & Internet Infrastructure CAPEX JOBS Retail Manufacturing Sales, Marketing & Support Manufacturing Retail banking Business Services Retail banking Business Services Retail banking Business Services Retail banking Business Services Wired telecommunication carriers ICT & Internet Infrastructure Accommodation Construction Logistics, Distribution & Transportation

23 5.4 Foreign Direct Investment Relations between the Western Cape and East Africa Between January 2003 and July 2014 a total of 27 FDI projects were recorded from the Western Cape into East Africa. These projects represent a total capital investment of ZAR3.42bn which is an average investment of ZAR126.41m per project. During the period, a total of 3,313 jobs were created. The table below shows the projects invested in from 2010 to June The most recent destination projects are linked to the top export markets from the Western Cape, namely Mozambique, and Zambia. The industry sector with the highest number of cross-overs between exports and investments from the Western Cape is the food and beverage sector. PROJECT DATE Jun 2014 INVESTING COMPANY Emerging Markets Payments (EMP) WESTERN CAPE FDI TO THE EAST AFRICA, 2011-JUNE 2014 DESTINATION COUNTRY INDUSTRY SECTOR Software & IT services Apr 2014 Woolworths (South Africa) Consumer Products Apr 2014 Woolworths (South Africa) Mauritius Consumer Products Nov 2013 The Jupiter Drawing Room Zambia Business Services Aug 2013 The Foschini Group Zambia Consumer Products SUB-SECTOR Software publishers, except video games Miscellaneous store retailers Miscellaneous store retailers Advertising, PR, & related General merchandise stores INDUSTRY ACTIVITY Sales, Marketing & Support CAPEX JOBS Retail Retail Business Services Retail May 2013 Rainbow Chicken Zambia Food & Tobacco Animal production Manufacturing Nov 2012 Pick n Pay Zambia Food & Tobacco Nov 2011 The Foschini Group Mozambique Consumer Products Nov 2011 Pick n Pay Zambia Food & Tobacco Sep 2011 Pick n Pay Malawi Food & Tobacco Sep 2011 Woolworths (South Africa) Tanzania Consumer Products Sep 2011 Woolworths (South Africa) Uganda Consumer Products Apr 2011 Santam Tanzania Financial Services Insurance Apr 2011 Santam Zambia Financial Services Insurance Mar 2011 Pick n Pay Zambia Food & Tobacco Feb 2011 Shoprite Mozambique Food & Tobacco Feb 2011 Shoprite Malawi Food & Tobacco Jan 2011 Ad Dynamo Business Services Food & Beverage Stores (Food & Tobacco) General merchandise stores Food & Beverage Stores (Food & Tobacco) Food & Beverage Stores (Food & Tobacco) Miscellaneous store retailers Miscellaneous store retailers Food & Beverage Stores (Food & Tobacco) Food & Beverage Stores (Food & Tobacco) Food & Beverage Stores (Food & Tobacco) Advertising, PR, & related Retail Retail Retail Retail Retail Retail Sales, Marketing & Support Sales, Marketing & Support Retail Retail Retail Sales, Marketing & Support

24 Tourist Departures ('000) 6. Tourism The East African Community (EAC) of, Tanzania, Uganda, Rwanda and Burundi have identified tourism as key to sector growth, Partner States have therefore embraced a joint marketing effort that seeks to sell the East African region as a single tourist destination called Destination East Africa. It also seeks to encourage intraregional tourism by providing incentives for East Africans, such as having uniform rates apply for nationals of EAC Partner States accessing tourism facilities (hotels, parks etc.) within the region. 6.1 South African Tourist Departures to East Africa The only East African countries for which annual South African departures are recorded by Business Monitor International (2014) can be seen below. In 2013 the East African country that attracted the most South African departures was Zimbabwe with 1.76 million departures followed by Zambia with 177,000 departures. The graph below shows the breakdown of departures according to the destination country. The total departures from South Africa was 2.3 million in 2013, growing by 4.2% from Arrivals from East Africa surpassed departures by around 1.2 million people. ANNUAL TOURIST DEPARTURES FROM SOUTH AFRICA INTO EAST AFRICA, f Seychelles Tanzania Malawi 1000 Zambia Zimbabwe Source: BMI, 2014 *forecasted figures from 2014 onwards 6.2 East African Tourist Departures to South Africa The only East African countries for which annual South African arrivals are recorded by SATourism can be seen below. Arrivals from these East African nations made up around 52% of all African arrivals to South Africa. In 2013 the East African country with the highest number of arrivals into South Africa was Zimbabwe with 1.98 million arrivals followed by Mozambique with 1.12 million arrivals. The graph below shows the breakdown of arrivals according to country. The total arrivals into South Africa was 3.56 million in 2013, growing by 5.7% from 2012.