Speaking at sassda’s recent ‘Africa Rising’ market intelligence briefing to its members, Market Intelligence Specialist Lesley Squires said; “Further to our interactions and lobbying of the Department of Trade and Industry, we are looking to facilitate the integration of our value chain, as well as facilitate market integration between sassda members and the rest of the continent.
“Our aim is to assist members in establishing and strengthening product value chains and identifying infrastructure and industrial projects on the continent and working closer with key economies on behalf of our members. As a result, we are already seeing positive results with inter-Africa trade initiatives currently taking place and trade with our neighbouring countries continues to present opportunities for sustained growth and development with enormous potential presenting itself for future economic partnerships and investment.”
Potential already realised
She confirmed; “Our current successes and potential areas of investment for members is seen with projects now running in Cote d’Ivoire, Mozambique, Tanzania and Kenya. Going into Africa, we have found that many of the projects are water and sanitation, food and beverage and abattoir related, which all utilise stainless steel and all of which, as we proceed, will come our way. These are development infrastructures lacking in Africa and the sector development we are working towards in these regions as they provide enormous market opportunities both for our members and for various export-oriented sectors of the South African economy.”
She added that to the east, Mozambique is finally seeing the launch of a liquid natural gas plant between Pemba and Palma in northern Mozambique. This is an offshore project, backed by Eni, which was signed with commitment from the Mozambican government on the 1st of June 2017. Another onshore project is being undertaken by Anadarko, where other ancillary projects, including hotels, housing and hospitals will be developed alongside the project, which means the ancillary Port in Pemba will now start its development plan, which will take just five months to complete from signing. Other projects have started up in Tete with Baobab Resources where we will see the development of a steel plant commencing January 2018 and a Vanadium processing plant set to follow which will involve a lot of stainless fabrication.
Sassda has also identified that in Nairobi, Kenya, two of the biggest steel fabricators and members of sassda namely Desbro and ASL are already operating in the country and present opportunities for joint partnerships with current members of sassda. Tanzania is focussed on agro-processing but will need extensive development on the ground.
Squires also updated attendees on a sassda trade mission to Abidjan and San Pedro in Cote d Ivoire which took place in May this year. She revealed; “Much development needs to take place. For example, it currently takes up to 14 days to get a ship into the port of Abidjan to offload goods, many of which are perishables, so one can imagine the wastage that occurs due to that type of delay.”
Looking ahead, the Port of San Pedro, which at present only has one docking facility, will serve as a gateway into the rest of the surrounding landlocked countries like Mali and Guinea which both have very large iron ore and manganese reserves. Already a railway is being planned into the Port of San Pedro which will house petrochemical and gas terminals as part of its infrastructure. We are currently waiting for the deal, which was signed on the 28 May with the Ivorian government and the shipping line MSC, to start development.”
Top project picks
Overall, Squires commented that South Africa now has better leverage with existing regional trade arrangements and various bilateral agreements that members can take advantage of to expand and diversify their imports and exports. “Working with the dti’s strategy of fostering intra-Africa trade with South African companies, we advise members to not just look to exporting into Africa but rather work together with other African countries and become part of regional value chains to add value to products through beneficiation prior to them being exported.”
For example, a sassda member who is a fabricator might look to invest in a joint venture assembly or distribution plant in Zambia. They could supply the high technology end from their South African operation and thereby create a valuable partnership with their Zambian partner in this endeavour. One can therefore increase trade through investment. They could supply the high technology end from their South African operation and thereby create a valuable partnership with their Zambian partner in this endeavour and increase trade through investment.
However, Squires warned; “Don’t go into Africa thinking you’re going to get instant business. It doesn’t work like that. We have seen that business in Africa is all about building relationships and going back time after time. One cannot rush into deals, members will need to build long term relationships over months if not years.”
Government’s view
Also speaking at the event, TIA Manager of Economic Development Facilitation Kwanda Modise said; “The South African government has recognised that South Africa can scale up and be more focused in how we approach our engagement in terms of economic development with the African continent. We aim to contribute to increasing Intra-African trade, scaling up industrialisation and facilitating higher levels of infrastructure development to the continent. The approach will be to pursue an outward-bound investment led trade strategy to the rest of Africa.”
Modise went on to explain that Trade Invest Africa is a new division of the dti, which was formed as a strategic response by the South African government to increase trade and investment with the rest of Africa. It offers facilitation support to exporters and utilises outward investments to the rest of the continent to drive South Africa’s value-added exports. With four business units, Investment Promotion and Facilitation, Export Promotion and Marketing, Export Development and Support and Foreign Service Management it works with various institutions to facilitate access to capital with financial support leveraged through international partnerships.
Click Here for a full Video Recording of the Africa Rising event.