German South African Business Relation 9 May 2018 Rechtsanwalt Frank Aletter, LL.M.
Content A. South Africa at a Glance B. Strong provinces C. Trade Relations D. The German Chamber Network
A. South Africa at a Glance
Economy overview GDP growth in % (2007 2017) Comments 5,4 Slow growth due to political uncertainty Volatile currencey 3,2 3 3,3 Partial implementation of the National Development Plan is expected 2,2 2,3 1,6 1,3 0,6 1,3 1,5* Government has increased taxes and lowered public expenses Discussion about Expropriation without Compensation puts a strain on investment 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 10-1,5 *2018 forecast Source: GTAI
South Africa global context Most important export countries for Germany outside Europe 2017 (in Billion Euro) USA VR China Turkey Japan Korean Republic Mexico UAE India Canada South Africa Australia Brasil Taiwan Hongkong Saudi-Arabia 111,53 86,22 21,46 19,53 17,47 12,91 11,09 10,69 9,68 9,53 9,44 8,46 7,68 6,87 6,59 0,00 20,00 40,00 60,00 80,00 100,00 120,00 Source: Destatis
South Africa African context South Africa s economy compared with other African countries (GDP share in 2017 in Subsahara-Africa) 22.5 33.3 South Afrtica Nigeria Angola Kenya Ethopia Other countries 5.1 25.8 5.2 8.1 Source: GTAI
South Africa in the region Trade: SADC Germany SADC Export to Germany, 2017 Trade: SADC Germany SADC Import from Germany, 2017 South Africa Botswana DR Kongo Lesotho Madagascar Malawi Mauritius Mozambique Namibia South Africa South Africa Botswana DR Kongo Lesotho Madagascar Malawi Mauritius Mozambique Namibia South Africa Tanzania Tanzania Zambia Zambia Zimbabwe Zimbabwe Source: DEstatis
Impact of the tourism sector on the South African economy GDP contribution of the toursim sector 1 of 23 employees work in the toursim sector* 2,9% *4,4% of employees Source: StatsSA
Impact of the tourism sector on the South African economy GVA of toursim is higher than mining More people work in the toursim industry than in the mining sector Industrty share: Contribution to GDP (GVA) Employees (in 1000) Agriculture 2% Services 118 Tourism 3% Mining 444 Services 4% Tourism 687 Construction 4% Agriculture 874 Private Services 6% Transport 910 Mining 8% Private household 1.283 Transport 10% Construction 1.431 Manufacturing 13% Maunfacturing 1.692 Trade 15% Finance 2.275 Public 18% Trade 3.178 Finance 20% Society 3.571 Soiurce: StatsSA
SWOT Analysis of South Africa Strengths Weaknesses Large sales market with almost 54 million inhabitants Relatively good infrastructure Broad industrial base that allows the entry into the African continent Stable political situation Skills shortage Electricity shortages and losses: problems for energy-intensive industries Lack of management skills High crime rate Opportunities Threats Large state infrastructure programs Rising demand for electricity provides opportunities for renewable energy High import demand especially for machines and plants Consuming growing middle class Rising energy prices Social imbalances and protests could undermine the long-term stability of the country Frequent and often wild strike action Growing conflicts over economic policy Source: GTaI
B. Strong provinces
Gautengs economy has approx. the same size as Mococco Provinces compared with countries with a similar GDP, 2016 Source: StatsSA
KwaZulu-Natal Composition of the province s demographics in % Comments 2,4 1 7,1 Black - 89.4% White - 2.4% Coloured - 1.0% Size: 94 361 km 2 Share of land area: 7.7% Share of national population: 19.6% Number of households: 2.83 million Gini coefficient: 0.61 [VALUE] Asian/ Indian - 7.1% Quelle: Statistics SA
KwaZulu-Natal Proportions of provincial GDP in % Comments Agriculture 1,3 Mining Manufacturing [VALUE] 14,3 Electricity, Gas & Water 5,5 Construction Trade 15,3 4,3 Transport 12,4 13,7 Finance Community, Social & Personal Services General Government Services 16,1 3,5 Contribution to national GDP: 16.0% Provincial GDP: 649.1 bn ZAR GDP per head: R44,584 GDP growth rate: 0.8% Manufacturing is the largest contributor to provincial GDP Assessed taxpayers as a proportion of SA total: 14.1% Unemployment rate: 24% Quelle: Statistics SA
Western Cape Composition of the province s demographics in % Comments 49,7 0,6 [VALUE] Black - 33.3% White - 16.5% Coloured - 49.7% Size: 129 462 km 2 Share of land area: 10.6% Share of national population: 11.5% Number of households: 1.83 million Gini coefficient: 0.6 Asian/ Indian - 0.6% 16,5 Quelle: Statistics SA
Western Cape Proportions of provincial GDP in % Comments Agriculture Mining 0,2 13,7 Contribution to national GDP: 13.6% Manufacturing Electricity, Gas & Water Construction Trade Transport Finance 6,1 22,9 10,2 [VALUE] 5,3 15,4 10 2,6 Provincial GDP: 552.7 bn ZAR GDP per head: R66,937 GDP growth rate: 1.5% Finance is the largest contributor to provincial GDP Assessed taxpayers as a proportion of SA total: 15.8% Unemployment rate: 20.7% Community, Social & Personal Services General Government Services Quelle: Statistics SA
C. Trade Relations
South Africa bilateral relations Main export countries 2016, share in % 18.1% 49% 11.8% 6.7% China (VR) Germany USA India Saudi-Arabia Japan France Other countries 3% 3.4% 3.8% 4.2% Source: StatsSA
Trade between Germany and South Africa Trade: Germany South Africa Billions Euro 2012 2013 2014 2015 2016 2017 Imports from South Africa to Germany 5,1 4,7 4,9 5,9 5,1 7,3 Exports to South Africa from Germany 8,8 8,5 8,3 9,6 7,5 9,5 Total 13,9 13,2 13,2 15,5 12,6 16,8 Balance 3,7 3,8 3,4 3,7 2,4 2,2 Germany is South Africa s Second most important exporter Third most important importer Ranking Trading Partners (2016): 28 Comment Doing Business Report World Bank (2018): 82
Trade between Germany and Mozambique Trade: Germany Mozambique Million Euro 2012 2013 2014 2015 2016 2017 Imports from Mozambique to Germany 124,9 153,6 120,7 150,2 136,2 237,5 Exports to Mozambique from Germany 63,5 91,7 92,4 120,7 55,6 56,4 Total 188,4 245,3 213,1 270,9 191,8 293,9 Balance 61,4 61,9 28,3 29,5 80,6 181,1 Comment Ranking Trading Partners (2017): 109 Doing Business Report World Bank (2018): 138
Trade between Germany and Zambia Trade: Germany Zambia Million Euro 2012 2013 2014 2015 2016 2017 Imports from Zambia to Germany 34,3 32,0 23,5 25,7 35,8 52,6 Exports to Zambia from Germany 89,0 153,3 78,7 58,0 55,1 62,3 Total 123,3 185,3 101,6 83,7 90,0 114,9 Balance -54,7-121,3-54,6-32,3-19,3-9,7 Comment Ranking Trading Partners (2017): 135 Doing Business Report World Bank (2018): 85
Trade between Germany and Zimbabwe Trade: Germany Zimbabwe Million Euro 2012 2013 2014 2015 2016 2017 Imports from Zimbabwe to Germany 49,2 58,6 55,5 40,8 62,3 59,2 Exports to Zimbabwe from Germany 57,3 37,8 31,4 45,1 27,2 28,2 Total 106,5 96,4 86,9 85,9 89,5 87,4 Balance -8,1 20,8 24,1-4,3 35,1 31,0 Comment Ranking Trading Partners (2017): 145 Doing Business Report World Bank (2018): 159
German Foreign Direct Investment into South Africa German FDI (in Mio. EUR) Comments 6,558 6,082 5,668 5,81 5,969 5,281 5,336 4,993 4,697 4,043 4,063 3,875 3,604 3,694 3,489 3,108 3,038 3,178 2,476 2,597 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 All sectors Processing Trade Since 2009 German FDI into processing trade has been decreasing Re-investinstment is taking place Reasons: negative market development, Change in investment framework (amendment of B-BBEE scorecard, visa regulations, water and electricity supply, lack of skilled worker) Source: Deutsche Bundesbank
D. The German Chamber Network
Worldwide support with 130 offices in 90 countries Algeria Angola Argentina Australia Austria Azerbaijan Baltic States Belarus Belgium Bolivia Bosnia-Herzegovina Brazil Bulgaria Canada Central America Central Asia Chile China Columbia Costa Rica Croatia Czech Republic Denmark Dominican Republic Ecuador Egypt El Salvador Estonia Finland France Ghana Greece Guatemala Honduras Hongkong Hungary Iceland India Indonesia Iran Iraq Ireland Israel Italy Japan Kazakhstan Kenya Korea Latvia Lithuania Luxemburg Macedonia Malaysia Mexiko Morocco Myanmar Netherlands New Zealand Nicaragua Nigeria Norway Oman Panama Paraguay Peru Philippines Poland Portugal Qatar Romania Russia Saudi-Arabia Serbia Singapore Slovakia Slovenia Southern Africa Spain Sweden Switzerland Taiwan Thailand Tunisia Turkey Ukraine United Arab Emirates United Kingdom Uruguay USA Venezuela Vietnam
The Chamber Network in Africa Accra Lagos 14 locations in 12 countries representing in total: Nairobi 93 % German Exports 88 % German Imports Johannesburg Kapstadt Lusaka Maputo Durban
The AHK Southern Africa serves 12 countries with 5 offices Johannesburg Head Office of the SA-German Chamber of Commerce Management s headquarters Competence Centres for Mineral Resources, and CSR & Training Cape Town Representation in the Western Cape and Eastern Cape Competence Centre: Sustainable Energies Durban Representation in KwaZulu Natal Main focus: industry and Durban port development Maputo, Mozambique First office established outside of South Africa Main focus: Market development, i.a. raw materials and infrastructure Lusaka, Zambia Second office established outside of South Africa Main focus: Market development, i.a. mining and mineral resources
Delegation Offices in Sub-Saharan Africa Angola Mr Ricardo Gerigk Email: ricardo.gerigk@gmail.com Website: http://angola.ahk.de Ghana Mr Maximilian Butek Email: maximilian.butek@ghana.ahk.de Website: http://ghana.ahk.de Kenya Ms Maren Diale-Schellschmidt Email: maren.diale@kenya-ahk.co.ke Website: http://www.kenia.ahk.de Nigeria Mr Marc Lucassen Email: lucassen@lagos-ahk.de Website: http://nigeria.ahk.de
The three pillars of the Chamber The three pillars of the Chamber Business Services Service provider for companies Service brand: DEinternational e.g. Market studies, events, workshops, etc. Trade Promotion Official representation of German industry and commerce Promoting the interests of German companies in southern Africa Promote, inform about the German economy Networking Member organisation Collective strength of members More than 600 companies are part of our network
Thank you for your attention!
Contact person Frank Aletter, LL.M. Deputy CEO Tel. +27 (0)11 486 2775 E-Mail: faletter@germanchamber.co.za