Growing resistance to South African products on the continent. Here’s why

30 May 2017 | Economic factors

It will become increasingly difficult for South African products to penetrate other African markets if the country’s current trade relationship with the continent continues. So says Nigel Gwynne-Evans, chief director for African Industrial Development at South Africa’s Department of Trade and Industry.

Speaking at a recent business networking seminar in Cape Town, Gwynne-Evans noted that the continent is now South Africa’s largest trading partner, but the trade balance is weighted in the country’s favour.

“We have a very significant trade imbalance with the rest of the region… We export over R300bn (US$23.30bn) worth of product, and we import R70bn ($5.44bn),” he said, adding that this mostly comprises oil imports from Nigeria and Angola.

South African companies and products have typically played a prominent role in many sub-Saharan African markets. But Gwynne-Evans said this has aided the introduction of protectionist measures.

“And that resistance is increasing significantly… [Ghana] is now blocking the import of medicines. We know about the infamous SI64 [which bans the importation of a list of products] in Zimbabwe. Zambia has blocked grocery imports for all the retailers. Nigeria and Angola have put in significant barriers to penetrate,” he continued.

“Part of this is the frustration that many of our neighbours feel around South African exporters using the markets, but not investing sustainably into [them]. And I think this is very understandable. If you look at South Africa, we are doing the same thing with our steel imports from China. We are doing it with many of our products as well.”

To counteract this, Gwynne-Evans said South African traders will need to establish more developmental relationships with their trading partners through joint-ventures with in-country partners and employees.

“If we don’t… our markets are never going to develop in the way that they should and, as South Africans, we are going to be increasingly marginalised from these markets. So I think we have to look at different models in terms of how we go into Africa.”