Since January this year, trade between Germany and South Africa has seen a slight decline, owing to a weaker rand and delays in starting local infrastructure development projects, says Southern African-Germany Chamber of Commerce and Industry (SAGCCI) CEO Matthias Boddenberg.
However, Boddenberg notes that a renewed postelection push behind these infrastructure projects is anticipated.
“The SAGCCI is committed to supporting the success of South African companies, while also representing German interests in South Africa. With a trade volume of R180-billion, Germany is South Africa’s second most important trading partner, after China.
“With investments of over R81-billion, Germany is among the largest investors in the South African economy. More than 620 German companies are active in the South African market, employing more than 90 000 people directly and, about the same number indirectly, through supplier industries,” he highlights.
The weaker rand has provided an opportunity for South African companies to export to Germany with a competitive price advantage.
Finished products are the most important exports from South Africa to Germany. Total exports from South Africa to Germany totalled €1.3-billion in the first three months of 2014, while exports from Germany to South Africa totalled €1.8-billion during the same time.
“South Africa has proven to be a strategic investment partner for Germany and a gateway to sub-Saharan Africa. Numerous German and South African companies can boast business success through bilateral partnerships.
“However, despite remaining an important destination for German investment, certain policy changes and socioeconomic issues create uncertainty for investors. Changes to the Broad-Based Black Economic Empowerment Codes of Good Practice, and the inconsistent interpretation of these codes, coupled with relentless and increasingly violent strikes affect investor confidence, to an extent that should not be underestimated. Issues such as the shortage of skilled labour and wage increases, which are not in line with productivity, are also seen as threats to investing,” Boddenberg asserts.
He adds that to improve investor confidence, open dialogue with a view to creating a new long-term legal framework for the continued protection of investments should be encouraged. This is in the mutual interest of companies from both countries and will benefit the continued cooperation in developing the South African and German economies.
“The SAGCCI is committed to assisting both South African and German companies succeed economically and, to that end, assists potential South African exporters through trade fair participation and export training programmes. A German trade fair is an international showcase for the latest innovations, an opportunity for knowledge transfer and a meeting point for potential business partners,” Boddenberg states.
He adds that the SAGCCI is committed to German business success in South Africa and in other Southern African Development Community (SADC) countries. “To that end, delegations from Germany visit South Africa several times during the year, bringing together German and South African companies, creating prospects for cooperation and partnerships for both nations. The chamber’s Competence Centre Mineral Resources and Renewable Energy divisions support South African and German endeavours in Germany, South Africa and, more frequently now, in the SADC region.
“Further, the chamber is dedicated to the future of South Africa – in particular the training of this nation’s youth. The South African-German Training Services, a chamber initiative, equips learners in the fields of office management, accounts, financial management, public sector accounting, industrial management and artisan training with both theoretical knowledge and work experience. “This work-integrated learning approach is based on the German training model and is supported by German and South African companies locally, resulting in the training and placement of thousands of young South Africans, primarily from historically disadvantaged backgrounds,” Boddenberg concludes.