SA ‘needs to grow export capacity’
SA HAS an “objective need” to expand its export base, Trade and Industry Minister Rob Davies said yesterday after the launch of a revised national exporter development programme targeting smaller enterprises.
He said that given the current account deficit and the change in trade patterns, the country would have to work much harder at getting its portion of value-added products into the export basket.
Mr Davis said any sector must have critical mass of at least 9%15% of production but SA was far below this level due to factors such as the export readiness of companies and market awareness.
He said SA already had a variety of programmes aimed at preparing companies for export markets. However, “after a long, hard and critical examination of all those programmes, we have now tried to produce a new internationally comparable and competitive initiative. The programme will establish clear, recognisable and transferrable criteria to identify companies that could benefit from the programme,” Mr Davies said.
The programme will be financed through the budget of Trade and Investment SA and several partnerships.
It is aimed at improving export readiness, particularly of small and medium enterprises.
Statistics by the South African Revenue Service show SA’s trade balance remains in the red, with imports far exceeding exports.
In 2009, the country enjoyed four months of trade surpluses. This rose to five months cover in 2010 and fell to three in 2011 and none last year. October last year was one of the worst months, with a trade balance deficit of more than R20bn.
Trade Law Chambers lawyer Rian Geldenhuys was not convinced the programme will increase SA’s export capacity in the short term. Many small- and medium-sized companies first had to establish themselves in the domestic market before even considering a competitive export market, said Mr Geldenhuys.
He would have been more optimistic about export growth if the target had been well-established local companies that already showed the potential for export.
Mr Davies admitted that an export company had to go through a process that included producing locally, getting an awareness of export possibilities and going through various stages to prepare it into becoming an exporter. He acceded that it was a long learning process.
Mr Davies said the devaluation of the rand had created opportunities for the country’s products to be more competitively priced. SA also needed to shift the balance in its export basket to more valueadded products, local producers needed to become more agile in seeking new markets and SA had to broaden the exporter base.