BRINGING TRADE INTO SOUTHERN AFRICA

Anyone who has ever traded overseas understands the importance stablishing a relationship

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Anyone who has ever traded overseas understands the importance of first establishing a relationship before proceeding to business. Knowing your competitors is vital to staying at the top.

An effective way to get the ball rolling in building international business relations is via trade delegations. In the simplest terms, a trade delegation is a group of representatives from businesses that produce or supply goods who travel together on arranged visits to other countries in order to foster understanding with businesses in other countries for the mutual trade benefit of both nations. Such trade delegations are often organised on a regional basis with the local economic development agencies, which are legal, non-profit structures that are owned by the public and private entities of a particular country. These agencies have been established to drive economic growth initiatives in defined geographical space such as provinces, districts and local municipalities. They can be defined as independent organisations shaped by public and private institutions with the aim of implementing strategies of shared territorial development, with particular emphasis on favouring access for the most marginal portions of a population to opportunities of income and decent employment.

This type of private-public partnership is a common occurrence in a bid to expand export opportunities around the world. Of course, one could be cynical and dismiss such trade delegations as a pack of lobbyists and other favour-seekers paying big bucks to gallivant with the mayor, premier, minister or president - schmoozing and gaining invaluable access - and in a few cases that may be true. However, on the whole, there is immense value in sending delegations to meet with their foreign counterparts. Members of trade delegations get to attend receptions, tour factories and meet with several industry leaders, as can be seen from the case study of trade delegations during the last few years to and fro between the Western Cape authorities (via Wesgro, The Official Tourism, Trade & Investment Promotion Agency for Cape Town and the Western Cape) and the republic of Angola. This is a shining example of how trade delegations actually accomplished their goal of expanding South African exports to Angola. 

In August 2016 Wesgro hosted a senior delegation from the Angolan Economic Ministry’s task team to revive the Lusophone nation’s economy. Wesgro arranged meetings for the delegation with key Cape companies invested in Angola such as Shoprite, Oceana and Fruit & Veg City. The Angolans also met with potential new investors whose entrance to the market was to be facilitated by Wesgro. The mission was the 12th from Angola that the tourism, trade and investment promotion agency had hosted in the past year-and-a-half, all of which had formed part of its drive to build relations between the Western Cape and Angola. Cape Town is now also extremely well-connected to Angola, with three-times-a-week non-stop flights, a well-established sea route and road freight lanes currently reaching Luanda every week. In 2015, Wesgro facilitated visits to Angola for the mayor of Cape Town Patricia de Lille, Western Cape Minister of Economic Opportunities Alan Winde, as well as the Premier of the province, Helen Zille. Following the Angolan trade delegation’s visit to South Africa in August, Wesgro and Wines of South Africa conducted a joint trade mission to Angola in September 2016 to promote new wine brands as part of the province’s Project Khulisa. Commenting on the mission, the CEO of Angola’s Institute of Public Sector Enterprises, Henda Inglês, assured a workshop of potential investors hosted at Wesgro this week that “coordination with agencies like Wesgro was a crucial intervention to strengthen ties with investors and in turn strengthen the economy”.On a national level, March 2017 saw South Africa’s Department of Trade and Industry (the dti) lead a business delegation on a Trade and Investment Mission to Accra, Ghana and Lagos, Nigeria. The mission formed part of the dti’s objective to identify and create export markets for South African value-added products and services. It also served to promote South African products and service offerings while, at the same time, creating business partnerships between business communities of the respective countries.

The mission was aimed at advancing Ghana, Nigeria and South Africa’s trade and investment relations. Both Ghana and Nigeria feature as key strategic partners for South Africa in the West Africa region and are pivotal partners towards advancing integration on the continent. As both Ghanaian and Nigerian economies begin to diversify away from oil, South Africa can assist with the necessary skills and expertise required to advance the diversification of both markets while, at the same time, increasing the South African footprint both in value-added products and investments in these markets. Sectors targeted for the mission were agro-processing, electro-technical, infrastructure, mining and capital equipment. The programme for the mission included trade and investment seminars, site visits and business-to-business meetings.In an effort to further facilitate trade delegations to and from the regional development agencies, the South African government recently launched the Invest South Africa One Stop Shop (InvestSA OSS). This development has been lauded by investors who have said it will go a long way in easing the way business is done in South Africa.We are very excited to be here. This one-stop shop is going to make our lives easier. We are very fortunate that we come at a time of the InvestSA one stop shop which will make things much easier for us,” said Derrick CM Huang, the South Africa Office Managing Director of BYD Company Limited, a Chinese manufacturer of automobiles and rechargeable batteries headquartered in Shenzhen. 

Speaking following a tour of the InvestSA office, President Zuma said that government has taken a firm decision to make South Africa more investor-friendly. The aim of InvestSA is to provide strategic guidance, reduce regulatory inefficiencies as well as reduce red tape for all investors looking to invest in South Africa. Among the roles of InvestSA is to promote both foreign and domestic investment, said Trade and Industry Minister Rob Davies.“It’s a one-stop shop, when you come physically to the premises you will be able to walk through the door, you will be able to interact with officials from InvestSA from the Department of Trade and Industry to find out what incentives are available, with the South Africa Revenue Service to ensure that your registration for VAT happens seamlessly among others. We offer investment information, we also offer after-care services to investors,” said the Minister. Government will also open three provincial one-stop shops later in the year. These will be known as InvestSA KZN, InvestSA Gauteng and InvestSA Western Cape. Other provinces will open their one-stop shops over a three-year period. It is expected that these one-stop shops will liaise with regional or local economic development agencies to organise and host trade delegations to show-off each region’s wares. 

The South African Constitution and various pieces of local government legislation give municipalities a mandate to act as a catalyst for sustainable economic development. One of the important vehicles to assist in the delivery of these objectives are Economic Development Agencies. Examples of such agencies from across the country include the Gauteng Growth and Development Agency (GGDA). The GGDA’s key purpose is to maximise the effect of developing the economy of Gauteng through support growth of the cooperatives economy, facilitation of trade and investment and increased strategic economic infrastructure.In 2016, Gauteng Premier, David Makhura (together with Gauteng MEC for Economic Development, Environment, Agriculture and Rural Development, Lebogang Maile) hosted a trade mission delegation from Atlanta, United States. The delegation was led by the city’s mayor, Kasim Reed, together with the US ambassador to South Africa, Patrick Gaspard. The engagement formed part of the realisation of the Gauteng Trade and Investment Strategy (GTIS) which, among other areas, aims to deepen relations with South Africa’s traditional trading partners such as the US. Atlanta as a region has major multinational companies that are already doing significant business with Gauteng. Such companies include Coke and UPS and both are contributing significantly to the South African economy. In addition, the US delegation brought along various other Atlanta-based businesses who are seeking to do business with the Gauteng city region. Gauteng-based metros such as Ekurhuleni have existing MOUs with Atlanta and this mission incorporated significant discussions with other Gauteng metros in this drive (including Johannesburg) to secure mutually beneficial partnerships between the two regions. 

Another prominent South African economic development agency is the Mandela Bay Development Agency (MBDA) which was established in 2003 by the Nelson Mandela Bay Municipality, with the support of the Industrial Development Corporation (IDC). The MBDA is a special purpose development company which has become the driving force behind urban regeneration in Nelson Mandela Bay. It has the stated aim of project-managing the regeneration of the Port Elizabeth CBD, with a view to promoting economic and tourism development against the backdrop of urban renewal. Another investment driver is the East London Industrial Development Zone (ELIDZ), which is a prime industrial site in South Africa. Geographically designated and positioned for specialised industrial activity, the zone was specially set-up for light industry manufacturers in search of ultimate global competitiveness and new market entry. The zone is renowned for its customised investment and property solutions that help industries streamline their business operations and lower their cost of doing business

 

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