“The Great Recession heralded the beginning of a new global era,” argues the South African Minister of Finance, Pravin Gordhan.

In an article first published by the Cairo School of Global Affairs, he noted that the worldwide recession has “exposed fault lines in the global economy, particularly in the advanced economies.”

On the other hand, Gordhan noted the observation of economists which rings across emerging markets: recovery from the recession is being propelled by the dynamism and extraordinary growth in the leading developing countries.

“The ‘forgotten’ continent of Africa is now both a new frontier of economic and other opportunities, and host to some of the fastest growing economies in the world,” he said.

But the South African government says it is not opportunity that is the challenge, but urging more companies to export from South Africa.

With a clout in the BRICS (Brazil, Russia, India, China, South Africa) club propelled by China, the strongest member and touted future global economic powerhouse, the key question for investors is simple: which are the companies standing to benefit from South Africa’s export-oriented agenda to markets with growing consumer power, even as buying threatens to slow in ‘traditional’ developed markets?

“We share the view that the world is undergoing far-reaching, complex and profound changes, marked by the strengthening of multipolarity, economic globalisation and increasing interdependence,” argued Gordhan, highlighting a far-reaching stated commitment to economic openness.

The entry of global companies adding South Africa to their value chains is a start.

American consumers will soon be able to serve on their tables hake caught off the southern African coastline, following a deal between South African fishing company, Oceanfresh, and global retail giant, Walmart, according to SouthAfrica.info.

With rising emerging markets developing their share of global companies, there is reason to believe firms in emerging markets are keen to do business with South Africa.

India, which exceeded its expected growth rate in the first quarter of this year, says it expects to reach a preferential trading deal with the Southern African Customs Union by the end of the year as it seeks to expand its economic footprint on the African continent, according to Sapa.

The analysis predicts that South Africa’s “robust private sector” stands to benefit from BRICS opportunities, in addition to the Expanded Public Works Programme targeted at the country as a whole, given the commitments to infrastructure that the government seeks to reach.

Standard Bank was ahead of the game when it sold the 20% stake to the Industrial and Commercial Bank of China.

Trade agreements with China and India are positive signs, alongside active direct discussion with Russia in recent months.

Inter-BRICS trade not only benefits member states, but those countries to engage entire regions in which fellow members are located. Brazil’s position as entry point to the South American market is a key example.

The Department of Trade and Industry (the dti) says it provides various incentives to South African firms to export their products internationally.

The Export Marketing & Investment Assistance Scheme (EMIA) is a primary mechanism by which to achieve an export-focused agenda, compensating exporters for costs involved in developing export markets for South African products.

Primary export market research is one of the main schemes, whereby the EMIA reimburses the costs of contact with potential clients in international markets, including airfares, car rental and daily allowances.

Provisions are made for individual exhibitions, with a percentage of the costs of participating in trade fairs subject to reimbursement.

Outward selling trade missions, which help exporters make contact with foreign buyers as well as inward buying trade missions – putting prospective buyers in contact with South African exporters – are on offer.

Investors in South African companies may do well to check if company expenses reflect reduced overhead costs if local firms or base operations of foreign entities are indeed taking advantage of the incentives.

The government says that South African manufacturers of products can apply for assistance, as can export trading houses, commission agents as well as export councils.

“Financial benefits work on a reimbursement basis, with the applicant bearing initial costs and then submitting a claim afterward (some upfront assistance is available under the National Pavilion Scheme),” according to the dti. Applications must be submitted at least one month before the event, and are available online.

Given the nature of risk of an export credit finance guarantee scheme, the Credit Guarantee Insurance Corporation provides substantial export credit insurance to small, medium and micro enterprises.

“Export credit insurance provides an exporter with insurance protection against financial loss owing to non-receipt of payment of a legally enforceable debt due, and payable by a non-South African importer to the exporter for goods and services delivered,” says the government. Furthermore, all guarantees are reinsured by the dti.

In order to qualify, however, the export transaction must include “substantial South African content of goods and/or services”, says the government.

The credit facilities can be extended to exporters of capital projects under the export finance scheme for capital projects, allowing local companies to complete internationally by offering buyers competitive rates denominated in US dollars.

South Africa’s Industrial Development Corporation (IDC) added overall positive signs in the general picture, following a bid to stimulate economic growth and help create jobs, according to a BuaNews report. The national agency has set up a five-year, R10-billion scheme that will provide businesses with loans at a rate of 3% below prime.

Existing businesses as well as new start-ups would qualify for the funding.

“We want to encourage entrepreneurs,” says IDC chief executive officer Geoffrey Qhena, who points out that the IDC wants to aid creation of new industries.

With a position of leadership in emerging markets with rapidly growing consumer power as well as domestic incentives to reach these markets and reduce operating expenses in local production, Opportunity will be watching closely to see which companies prove top-case studies in taking advantage of South Africa’s position at the beginning of a new global era.

Garreth Bloor