31 January 2013

South Africa: DTI Working On Expanding Abroad

Pretoria — The Department of Trade and Industry is in the process of securing funds to expand its global footprint in the 29 foreign economic offices (FEOs) it has abroad.

Earlier this week, DA spokesperson on Trade and Industry, Dr Wilmot James, indicated that he would be submitting parliamentary questions to the Minister of Trade and Industry, Dr Rob Davies, calling for increased staffing in FEOs.

The department had thanked James for his concern, also adding that the selection of such offices was based on a prioritisation of markets with the largest potential for South Africa from an investment and export perspective.

Factors such as regional integration, South Africa's role in Africa and important economic groupings such as BRICS were also considered, the dti said.

"Due to limited resources, it is not possible to be represented in every market. However, the dti collaborates closely with the Department of International Relations and Cooperation offices to provide support on economic matters where the budget does not allow for full-time dti representation," it pointed out.

The dti has a mandate to service new high growth markets as well as those traditional markets which have been and still are important business partners to the country, albeit at a lower growth rate, such as the United States of America, Japan, Germany and the United Kingdom.

South Africa's inclusion into BRICS lends an added impetus for focus on countries such as Brazil, India, Russia and China. This emphasises that the department has untapped potential for collaboration, not just from a bilateral trade and investment flow perspective, but from the perspective of African opportunities.

Currently, 36% of South Africa's trade is with traditional partners (the EU and US), 21% with Africa; 22% with BRICS and 21% with Asia (excluding China and India).

"As new trading patterns emerge, we cannot ignore the importance of China and India as key markets in Asia exhibiting impressive annual export growth rates," the department said.

Meanwhile, South Africa's exports to key developing countries of the South in 2011/12 increased by over 5%.

Of the R6.42 billion export sales facilitated by the dti, 47% was from Africa and the Middle East and 15% from Asia.

In terms of an investment pipeline of potential projects of R40.91 billion, an amount of R14.81 billion has been recorded, representing 36.2% from developing countries which include China, India, South Korea, Singapore and Russia.

The department added that in the past year, a number of high level business delegations were facilitated between Trade and Investment South Africa (TISA) -- a division of the dti -- and counterpart agencies on a reciprocal basis.

South East Asian countries are recognised as a model for regional cooperation and integration. The dti regularly participates in trade exhibitions and missions in these countries, such as Defence Services Asia in Malaysia in 2012 and an investment recruitment mission to Singapore in 2011.

One of the notable successes of participating in Defence Services Malaysia was Denel signing a R3.5 billion contract with the Malaysian government to supply defence equipment.

This year, Outward Selling Missions have been planned for Singapore, Indonesia, Vietnam and Thailand, in order to leverage opportunities in these markets for agro-processing, capital equipment, electro-technical and other sectors.

"The dti views South East Asian countries such as Malaysia, Indonesia, Singapore and Thailand as integral to our market diversification strategy and as such, there is active engagement with these countries on both export and investment related programmes.

"Various new offices have been identified for economic representation, and the dti is in the process off securing funding to enlarge its global footprint."

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