Jacyntha Twynam, Head: Wesgro Research 23 July 2014
Presentation Overview Overview of Wesgro Growth in global economies Western Cape trade Western Cape trade with Africa Global FDI into Africa Western Cape FDI into Africa Questions and Answers
About Wesgro Established by Law: Western Cape Investment and Trade Promotion Law Act 3 of 1996 Western Cape Investment and Trade Promotion Agency Amendment Act, 2013 Compliance in terms of Treasury Regulations/ PFMA/ MFMA Reports to: MEC for Agriculture, Economic Development and Tourism - MEC Winde MAYCO Cllr Johan Van der Merwe Financed by: Western Cape Government Department of Economic Development and Tourism - Department of Agriculture City of Cape Town MANDATE MISSION To promote tourism, trade and investment in the Western Cape by identifying and publicising opportunities in tourism, trade and investment To attract and facilitate foreign and domestic direct investment into the Western Cape; To grow exports of products and services of the Western Cape through the development of exporter capability, demand and market access; and To market the Western Cape as a competitive business and tourism destination within national and international arenas The stimulation, facilitation and increase of economic growth and opportunities through Tourism, Trade and Investment promotion and building a strong regional economic brand. To achieve the strategic outcome goal, Wesgro focus on the following: Effective marketing of Cape Town and the Western Cape as a tourism destination to increase domestic and international tourist arrivals; Support the trade and export promotion for qualified exporters and thereby improve the opportunity for employment creation and new investment; Attract domestic and foreign direct investment to support economic growth and employment creation; and Building a strong regional economic brand that make Cape Town and the Western Cape an inspiring place to do business. VISION To be Africa s globally renowned tourism, trade and investment promotion agency
Growth (%) Growth in global economies GLOBAL ECONOMIES, 2010-2017 10 9 8 7 6 5 4 3 2 1 0 2010 2011 2012 2013 2014(f) 2015(f) 2016(f) 2017(f) Sub-Saharan Africa (Region) 5,5 5,3 4,6 4,8 5,3 5,5 5,8 5,5 Southeast Asia 7,7 4,8 5,8 5,2 5 5,3 5,6 5,6 World 5,2 3,9 3,2 3 3,6 3,9 3,9 3,9 North America 2,8 2,1 2,8 1,8 2,8 3 3,1 2,9 North Africa 4,4 0 9,4 2 2,5 5,9 6 4,8 South America 6,6 4,8 2,7 3,2 2,3 2,7 3,2 3,3 Europe 2,3 2,1 0,3 0,4 1,6 1,9 2 2 Source: IMF, 2014
Western Cape trade TOP 10 WESTERN CAPE EXPORT MARKETS, 2013 IMPORTERS VALUE 2013 (ZARbn) % SHARE 2013 % GROWTH 2012-2013 1 Netherlands 6.74 9.00-0.91 2 United Kingdom 6.66 8.89 25.04 3 Germany 3.85 5.14 25.33 4 Mozambique 3.78 5.05 148.62 5 United States 3.49 4.65 4.38 6 Singapore 2.70 3.61 9.17 7 Japan 2.65 3.53 117.68 8 Angola 2.54 3.40 11.83 9 Kenya 2.29 3.05 64.53 10 China 2.12 2.84 49.39 TOTAL EXPORTS 74.87 100.0% 16.06% TOP 10 WESTERN CAPE IMPORT MARKETS, 2013 Source: Quantec, 2014 % VALUE 2013 % SHARE EXPORTERS GROWTH (ZARbn) 2013 2012-2013 1 Saudi Arabia 37.67 20.19-0.32 2 China 28.01 15.01 39.27 3 India 16.37 8.77 75.28 4 Nigeria 13.59 7.28-20.73 5 Germany 8.10 4.34 65.45 6 Singapore 7.54 4.04 75.42 7 United Kingdom 6.58 3.53 21.31 8 Italy 5.24 2.81 38.49 9 United States 4.71 2.52 13.80 10 Netherlands 4.64 2.48-11.23 TOTAL IMPORTS 179.4 100.0% 27.85% Source: Quantec, 2014
Value (ZARm) value (ZARm) Western Cape trade with Africa The Western Cape has experienced a trade deficit with Africa over the past decade mainly due to crude petroleum oil imports. Exports have been growing steadily and by 34% in 2013. The Western Cape exports 25,3% of its total goods to Africa. Also, the Western Cape accounts for 13,1% of South African exports into Africa 50 000 40 000 30 000 20 000 10 000 - (10 000) (20 000) WESTERN CAPE TRADE WITH AFRICA, 2004-2013 (30 000) 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total Exports (ZARm) 4 847 6 995 7 072 7 736 11 646 10 290 9 363 11 242 14 144 18 954 Total Imports (ZARm) 3 747 5 015 13 275 21 187 30 036 20 142 15 735 17 780 37 287 30 842 Trade Balance (ZARm) 1 099 1 980 (6 204) (13 451) (18 391) (9 851) (6 371) (6 537) (23 143) (11 888) Source: Quantec, 2014 14 000 12 000 10 000 8 000 6 000 4 000 2 000 WESTERN CAPE TRADE WITH AFRICAN REGIONS, 2004-2013 - 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 SADC 3 388 5 255 4 379 4 627 7 938 6 335 6 382 7 596 8 849 11 791 Western Africa 736 1 030 1 674 1 804 1 837 1 459 1 400 2 069 2 628 3 539 Eastern Africa Rest 513 444 510 687 1 325 1 407 841 889 1 757 2 727 Middle Africa Rest 150 203 258 218 313 500 407 537 604 639 Northern Africa 60 64 250 400 233 590 333 152 306 259 SADC is a major export market for Western Cape exports mainly due to the FTA that has encouraged exporters to take advantage of the competitive edge offered thereby Exports to SADC grew by 33% in 2013. Exports to Western Africa grew by 35% and to Eastern Africa grew by 55% in 2013.
Western Cape trade with Africa TOP 10 WESTERN CAPE EXPORT MARKETS IN AFRICA, 2013 IMPORTERS VALUE 2013 (ZARm) % GROWTH 2012-2013 % SHARE 2013 1 Mozambique 3 779.1 148.6% 19.9% 2 Angola 2 543.0 11.8% 13.4% 3 Kenya 2 287.0 64.5% 12.1% 4 Zambia 2 004.4 31.5% 10.6% 5 Nigeria 1 642.1 43.2% 8.7% 6 Zimbabwe 1 329.9 31.7% 7.0% 7 United Republic of Tanzania 676.4 34.2% 3.6% 8 Ghana 605.7 22.6% 3.2% 9 Mauritius 599.8 11.4% 3.2% 10 Democratic Republic of Congo 475.4-6.6% 2.5% TOTAL EXPORTS 18 954.3 34.0% 100.0% TOP 10 WESTERN CAPE IMPORT MARKETS IN AFRICA, 2013 EXPORTERS VALUE 2013 (ZARm) % GROWTH 2012-2013 % SHARE 2013 1 Nigeria 13,591.5-20.7% 44.1% 2 Angola 4,229.9-65.1% 13.7% 3 Mozambique 3,346.7-13.7% 10.9% 4 Ghana 2,926.1 110.1% 9.5% 5 Equatorial Guinea 2,682.7 342.4% 8.7% 6 Gabon 1,230.6 1347.9% 4.0% 7 Mauritius 922.9 28.1% 3.0% 8 United Republic of Tanzania 651.8 168.0% 2.1% 9 Madagascar 474.1 45.4% 1.5% 10 Zimbabwe 268.7 104.0% 0.9% TOTAL IMPORTS 30 842.0 17.3% 100.0% Source: Quantec, 2014
Western Cape exports to East Africa Mozambique Refined oils petroleum (ZAR2.6bn) Tobacco (ZAR87m) Fish (ZAR56m) Sauce, condiments, seasoning, mustard (ZAR50m) Fruit & veg juices (ZAR49m) Wines (ZAR33m) Furniture (ZAR25m) Kenya 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 & drink preparation machinery (ZAR12m) Zambia Sulphur (ZAR587m) Fertilizer (ZAR130m) Refined oils petroleum (ZAR110m) Natural magnesium carbonate (ZAR89m) Prepared explosives (ZAR56m) Products of iron/steel (ZAR52m) Fruit & veg juice (ZAR43m) Sauce, condiments, seasoning, mustard (ZAR41m) Industrial food & drink preparation machinery (ZAR24m) Zimbabwe Fertilizer (ZAR124m) Refined oils petroleum (ZAR54m) Fruit & veg juice (ZAR47m) TOP 10 WESTERN CAPE EXPORT MARKETS IN EAST AFRICA, 2013 % SHARE VALUE % SHARE % SHARE OF WC IMPORTERS 2013 OF SA OF WC EXPORTS (ZARm) EXPORTS EXPORTS TO AFRICA 1 Mozambique 3 779 14.2% 5.0% 19.9% 2 Kenya 2 286 31.3% 3.1% 12.1% 3 Zambia 2 004 8.1% 2.7% 10.6% 4 Zimbabwe 1 329 6.0% 1.8% 7.0% 5 United Republic of Tanzania 676 14.5% 0.9% 3.6% 6 Mauritius 599 22.1% 0.8% 3.2% 7 Malawi 280 6.0% 0.4% 1.5% 8 Uganda 107 6.4% 0.1% 0.6% 9 Seychelles 102 24.2% 0.1% 0.5% 10 Réunion 98 30.0% 0.1% 0.5% TOTAL EXPORTS 11 592 11.7% 15.5% 61.2% Source: Quantec, 2014 Tanzania Products of iron/steel (ZAR330m) Wines (ZAR49m) Fruit & veg juice (ZAR29m) Apples, pears (ZAR25m) Mauritius Fruit & veg juices (ZAR58m) Petroleum coke, bitumen & oil industry residues (ZAR55m) Apples, pears (ZAR52m) Cigars, cigarettes (ZAR25m) Prepared fish & fish eggs (ZAR16m)
Western Cape exports to West Africa TOP 10 WESTERN CAPE EXPORT MARKETS IN WEST AFRICA, 2013 % SHARE VALUE % SHARE % SHARE OF WC IMPORTERS 2013 OF SA OF WC EXPORTS (ZARm) EXPORTS EXPORTS TO AFRICA 1 Nigeria 1 642 14.2% 5.0% 19.9% 2 Ghana 605 31.3% 3.1% 12.1% 3 Sierra Leone 332 8.1% 2.7% 10.6% 4 Côte d'ivoire 181 6.0% 1.8% 7.0% 5 Benin 169 14.5% 0.9% 3.6% 6 Senegal 161 22.1% 0.8% 3.2% 7 Mali 123 6.0% 0.4% 1.5% 8 Togo 109 6.4% 0.1% 0.6% 9 Liberia 35 24.2% 0.1% 0.5% 10 Mauritania 29 30.0% 0.1% 0.5% TOTAL EXPORTS 3 451 20.9% 4.6% 18.2% Source: Quantec, 2014 Senegal Apples, pears (ZAR88m) Products of iron/steel (ZAR16m) Citrus (ZAR15m) Nigeria Products of iron/steel (ZAR522m) Apples, pears (ZAR322m) Wines (Zar105m) Fruit & veg juice (ZAR76m) Passenger & goods transport ships/boats (ZAR56m) Liqueur, spirits (ZAR54m) Industrial food & drink preparation machinery (ZAR27m) Ghana Liquid/gas centrifuges, filtering, purifying machines (ZAR136m) Apples, pears (ZAR101m) Fruit & veg juice (ZAR25m) Products of iron/steel (ZAR42m) Fermented beverages, cider, perry, mead (ZAR21m) Wines (ZAR15m) Machinery to sort, screen, wash (ZAR14m) Côte d Ivoire Products of iron/steel (ZAR90m) Apples, pears (ZAR32m) Clay (ZAR15m) Benin Apples, pears (ZAR130m) Products of iron/steel (ZAR11m) Sierra Leone Refined oils petroleum (ZAR307m)
Western Cape trade with Africa TOP 10 WESTERN CAPE EXPORT PRODUCTS TO AFRICA, 2013 PRODUCT VALUE 2013 (ZARm) % SHARE OF SA EXPORTS % SHARE OF WC EXPORTS 1 Mineral fuels, oils, distillation products 3,624 39% 25% 2 Iron and steel 2,950 77% 33% 3 Edible fruit, nuts, peel of citrus fruit, melons 1,560 9% 75% 4 Beverages, spirits and vinegar 1,429 15% 51% 5 Salt, sulphur, earth, stone, plaster, lime and cement 796 87% 56% 6 Tobacco and manufactured tobacco substitutes 728 55% 99% 7 Vegetable, fruit, nut, food preparations 727 24% 55% 8 Fish, crustaceans, molluscs, aquatic invertebrates 338 10% 76% 9 Edible vegetables and certain roots and tubers 30 72% 46% 10 Cereal, flour, starch, milk preparations and products 237 93% 23% 11 Ships, boats and other floating structures 163 17% 64% 12 Printed books, newspapers, picture 145 56% 31% 13 Meat and edible meat offal 115 77% 20% 14 Meat, fish and seafood food preparations 115 18% 46% TOTAL EXPORTS 18 954 25% 13% Source: Quantec, 2014
Western Cape trade with Africa TOP 10 WESTERN CAPE EXPORT PRODUCTS TO AFRICA, 2013 TOP 10 WESTERN CAPE IMPORT PRODUCTS FROM AFRICA, 2013 1 2 PRODUCT Oils petroleum, bituminous, distillates, except crude Hot-rolled products, iron/steel, width>600mm, not clad VALUE 2013 (ZARm) % GROWTH 2012-2013 PRODUCT VALUE 2013 (ZARm) % GROWTH 2012-2013 3 360.0 140.4% 1 Petroleum oils, oils from bituminous minerals, crude 24 807.2-20.6% 2 832.5 59.0% 2 Oils petroleum, bituminous, distillates, except crude 3 561.0-10.5% 3 Apples, pears and quinces, fresh 1 217.7 53.7% 3 Men s or boys suits, jackets, trousers etc. not knit 306.0 60.9% 4 Sulphur, except sublimated, precipitated, colloidal 643.5 72.3% 4 T-shirts, singlets and other vests, knit or crochet 265.1 42.8% 5 6 7 8 Grape wines(including fortified), alcoholic grape must Fruit and vegetable juices, not fermented or spirited Cigars, cigarettes etc, tobacco or tobacco substitute Liqueur, spirits and undenatured ethyl alcohol <80% 620.4 27.8% 5 Oil-cake other than soya-bean or groundnut 154.4 47.5% 557.9 35.7% 6 Jerseys, pullovers, cardigans, etc., knit or crochet 134.0 6.9% 540.9-17.8% 7 Tobacco unmanufactured, tobacco refuse 128.0 197.4% 474.5 27.7% 8 Men's or boys' shirts 120.4 20.6% 9 Fish, frozen, whole 296.8 31.2% 9 Women s, girls suits, jacket, dress, skirt, etc., woven 98.5 65.8% 10 Fertilizer mixtures in packs of < 10kg 272.7 201.7% 10 Wood sawn, chipped lengthwise, sliced or peeled 89.7 5.6% TOTAL EXPORTS 18 954.3 34.0% TOTAL IMPORTS 30 842.0 17.3% Source: Quantec, 2014
Value (ZARbn) Global FDI to Africa 1 400 1 200 1 000 800 600 400 200 GLOBAL INWARD FDI INTO AFRICA, 2003- DECEMBER 2013 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Capex (ZARbn) 460,7 321,1 653,2 659,1 637,1 1 237 661,8 616,5 597,5 394,8 443,0 Projects 337 276 456 470 409 878 747 676 867 777 762 TOP 10 GLOBAL COMPANIES INVESTING INTO AFRICA, 2003-2013 COMPANY PROJECTS CAPEX (ZARm) 1 Banco de Fomento Angola 69 5 177.9 2 Ecobank Transnational 29 2 574.9 3 IBM 28 6 508.7 4 Nestle 25 6 594.7 5 BNP Paribas 23 2 102.9 6 Nokia 23 1 132.5 7 Kenya Commercial Bank (KCB) 21 1 623.5 8 Credit Agricole Egypt 21 1 909.5 9 United Bank for Africa (UBA) 21 2 185.6 10 Banco Millennium Angola 21 1 254.8 TOTAL IMPORTS 6 655 6 682 542.8 Source: Financial Times, 2014 1 000 900 800 700 600 500 400 300 200 100 0 Projects South Africa was the 5 th largest source market for FDI into Africa by the number of FDI projects and 7 th by the value of FDI The top source markets for FDI into Africa were the United states, the United Kingdom, United Arab Emirates, Canada, France and India. South Africa was the top destination market for FDI into Africa by the number of projects and 4 th by value of FDI The top destination markets for FDI into Africa were Egypt, Morocco, Nigeria, Tunisia, Algeria and Angola. The top destination markets for FDI The top sectors for global FDI into Africa, in terms of projects attracted: Coal, oil and natural gas accounted for 37% of projects Real estate accounted for 16% of projects Metals accounted for 15% pf projects In terms of the capital value of projects, the following was observed: Financial services accounted for 16% of capex Business services accounted for 8% of capex Communications accounted for 7% of capex
Global FDI with Africa Heat map of global companies into Africa Heat map of source countries for FDI into Africa Source: Financial Times, 2014
South Africa and Western Cape FDI to Africa Heat map of South African companies in Africa Heat map of Western Cape companies in Africa Source: Financial Times, 2014
Value (ZARm) Western Cape FDI to Africa FDI from South Africa into Africa over the past 10 years reached R236bn from 355 projects. The Western Cape accounted for 18% of these projects and 5% of the investment value 63 projects R11bn Western Cape FDI was mainly into Nigeria, Angola, Zambia and Namibia. The top sectors for FDI into Africa from the Western Cape in terms of projects attracted, are: Food & Tobacco accounted for 40% of projects Consumer Products accounted for 16% of projects Financial Services accounted for 11% of projects In terms of the capital value of projects, the top sectors are: Food & Tobacco accounted for 38% of capex Consumer Products accounted for 28% of capex Metals accounted for 14% of capex 4 000 3 500 3 000 2 500 2 000 1 500 1 000 500 WESTERN CAPE FDI INTO AFRICA, 2003-DECEMBER 2013 0 2004 2005 2006 2008 2010 2011 2012 2013 Capex (ZARm) 257,9 277,7 675,3 1 401,9 2 156,6 3 484,2 886,1 2 093,0 Projects 2 3 4 8 6 23 8 9 TOP 10 WESTERN CAPE COMPANIES INVESTING INTO AFRICA, 2003-2013 COMPANY PROJECTS CAPEX (ZARm) 1 Shoprite 16 2 665.8 2 The Foschini Group 5 1 500.3 3 Belmet Marine 1 1 478.8 4 Woolworths (South Africa) 4 1 200.2 5 Pick n Pay 8 960.5 6 PetroSA 3 796.9 7 Clicks Group 3 233.1 8 Engen 1 191.8 9 Santam 2 178.5 10 Sanlam Group 2 143.0 TOTAL IMPORTS 63 11 232.8 Source: Financial Times, 2014 25 20 15 10 5 0 Projects
Thank you Dankie Enkosi