Small group of companies hold export monopoly

ALMOST all exports from South Africa came from a very small concentration of “super” companies.

World Bank lead economist Catriona Purfield addressed this and other findings of a fresh World Bank research report titled “South Africa Economic Update: Focus on Export Competitiveness” at a presentation in Port Elizabeth yesterday.

Purfield was a guest of the Nelson Mandela Metropolitan University’s Business School and Faculty of Business Economic Sciences. The presentation was attended by export-oriented companies.

Purfield said only 5% of firms in South Africa had the monopoly of 93% of exports to the world, including sub-Saharan Africa.

“South African exports are among the most concentrated in the world and is only second to Chile,” she said. These so-called “super-exporters” dominated the export market over the last decade, sharing the space with a large group of small, occasional exporters.

Purfield said the automotive industries, specifically in the Eastern Cape, had shown clear successes when it came to exports.

In order to grow exports, South Africa needed to boost domestic competitiveness and address infrastructure bottlenecks, especially in terms of the pricing of trade logistics, she said.

“Our port tariffs are three times higher than the global average.”

Another growth strategy would be to promote deeper regional integration in goods and services. Companies should aggressively look at the exporting network within sub-Saharan Africa by creating production chains similar to those employed in East Asia, she said.

Almost a third of all South African exports were to the sub-Saharan African region. “It is the region that is growing the fastest and everybody is talking about it.”