Jacyntha Twynam, Head: Wesgro Research 23 July...

Jacyntha Twynam, Head: Wesgro Research

23 July 2014 An inspiring place to do business

Presentation Overview

• Overview of Wesgro

• Growth in global economies

• Western Cape trade

• Western Cape trade with Africa

• Global FDI into Africa

• Western Cape FDI into Africa

• Questions and Answers

An inspiring place to do business

About Wesgro


• Established by Law:

– Western Cape Investment and Trade

Promotion Law Act 3 of 1996

– Western Cape Investment and Trade

Promotion Agency Amendment Act,

2013

• Compliance in terms of Treasury Regulations/

PFMA/ MFMA

• Reports to:

– MEC for Agriculture, Economic

Development and Tourism - MEC

Winde

– MAYCO – Cllr Johan Van der Merwe

• Financed by:

– Western Cape Government

– Department of Economic Development and

Tourism

- Department of Agriculture

– City of Cape Town

MANDATE

MISSION

VISION

• To promote tourism, trade and investment in the Western Cape by

identifying and publicising opportunities in tourism, trade and investment

• To attract and facilitate foreign and domestic direct investment into the

Western Cape;

• To grow exports of products and services of the Western Cape through the

development of exporter capability, demand and market access; and

• To market the Western Cape as a competitive business and tourism

destination within national and international arenas

• The stimulation, facilitation and increase of economic growth and

opportunities through Tourism, Trade and Investment promotion and

building a strong regional economic brand.

• To achieve the strategic outcome goal, Wesgro focus on the following:

• Effective marketing of Cape Town and the Western Cape as a tourism destination to

increase domestic and international tourist arrivals;

• Support the trade and export promotion for qualified exporters and thereby improve the

opportunity for employment creation and new investment;

• Attract domestic and foreign direct investment to support economic growth and

employment creation; and

• Building a strong regional economic brand that make Cape Town and the Western Cape

an inspiring place to do business.

“To be Africa’s globally renowned tourism, trade and investment

promotion agency”

Growth in global economies


Source: IMF, 2014

2010 2011 2012 2013 2014(f) 2015(f) 2016(f) 2017(f)

Sub-Saharan Africa (Region) 5,5 5,3 4,6 4,8 5,3 5,5 5,8 5,5

Southeast Asia 7,7 4,8 5,8 5,2 5 5,3 5,6 5,6

World 5,2 3,9 3,2 3 3,6 3,9 3,9 3,9

North America 2,8 2,1 2,8 1,8 2,8 3 3,1 2,9

North Africa 4,4 0 9,4 2 2,5 5,9 6 4,8

South America 6,6 4,8 2,7 3,2 2,3 2,7 3,2 3,3

Europe 2,3 2,1 0,3 0,4 1,6 1,9 2 2

0

1

2

3

4

5

6

7

8

9

10

Gro

wth

(%

)

GLOBAL ECONOMIES, 2010-2017

Western Cape trade


Source: Quantec, 2014

TOP 10 WESTERN CAPE EXPORT MARKETS, 2013

RANK IMPORTERSVALUE 2013

(ZARbn)

% SHARE

2013

%

GROWTH

2012-2013

1 Netherlands 6.74 9.00 -0.91

2 United Kingdom 6.66 8.89 25.04

3 Germany 3.85 5.14 25.33

4 Mozambique 3.78 5.05 148.62

5 United States 3.49 4.65 4.38

6 Singapore 2.70 3.61 9.17

7 Japan 2.65 3.53 117.68

8 Angola 2.54 3.40 11.83

9 Kenya 2.29 3.05 64.53

10 China 2.12 2.84 49.39

TOTAL EXPORTS 74.87 100.0% 16.06%

TOP 10 WESTERN CAPE IMPORT MARKETS, 2013

RANK EXPORTERSVALUE 2013

(ZARbn)

% SHARE

2013

%

GROWTH

2012-2013

1 Saudi Arabia 37.67 20.19 -0.32

2 China 28.01 15.01 39.27

3 India 16.37 8.77 75.28

4 Nigeria 13.59 7.28 -20.73

5 Germany 8.10 4.34 65.45

6 Singapore 7.54 4.04 75.42

7 United Kingdom 6.58 3.53 21.31

8 Italy 5.24 2.81 38.49

9 United States 4.71 2.52 13.80

10 Netherlands 4.64 2.48 -11.23

TOTAL IMPORTS 179.4 100.0% 27.85%


Western Cape trade with Africa


2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Total Exports (ZARm) 4 847 6 995 7 072 7 736 11 646 10 290 9 363 11 242 14 144 18 954

Total Imports (ZARm) 3 747 5 015 13 275 21 187 30 036 20 142 15 735 17 780 37 287 30 842

Trade Balance (ZARm) 1 099 1 980 (6 204) (13 451) (18 391) (9 851) (6 371) (6 537) (23 143) (11 888)

(30 000)

(20 000)

(10 000)

-

10 000

20 000

30 000

40 000

50 000

valu

e (Z

AR

m)

WESTERN CAPE TRADE WITH AFRICA, 2004-2013


2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

SADC 3 388 5 255 4 379 4 627 7 938 6 335 6 382 7 596 8 849 11 791

Western Africa 736 1 030 1 674 1 804 1 837 1 459 1 400 2 069 2 628 3 539

Eastern Africa Rest 513 444 510 687 1 325 1 407 841 889 1 757 2 727

Middle Africa Rest 150 203 258 218 313 500 407 537 604 639

Northern Africa 60 64 250 400 233 590 333 152 306 259

-

2 000

4 000

6 000

8 000

10 000

12 000

14 000

Val

ue

(ZA

Rm

)

WESTERN CAPE TRADE WITH AFRICAN REGIONS, 2004-2013

The Western Cape has experienced a trade deficit with

Africa over the past decade – mainly due to crude

petroleum oil imports.

Exports have been growing steadily and by 34% in 2013.

The Western Cape exports 25,3% of its total goods to

Africa.

Also, the Western Cape accounts for 13,1% of South

African exports into Africa

SADC is a major export market for Western Cape exports

mainly due to the FTA that has encouraged exporters to

take advantage of the competitive edge offered thereby

Exports to SADC grew by 33% in 2013.

Exports to Western Africa grew by 35% and to Eastern

Africa grew by 55% in 2013.




TOP 10 WESTERN CAPE EXPORT MARKETS IN AFRICA, 2013

RANK IMPORTERSVALUE 2013

(ZARm)

% GROWTH

2012-2013

% SHARE

2013

1 Mozambique 3 779.1 148.6% 19.9%

2 Angola 2 543.0 11.8% 13.4%

3 Kenya 2 287.0 64.5% 12.1%

4 Zambia 2 004.4 31.5% 10.6%

5 Nigeria 1 642.1 43.2% 8.7%

6 Zimbabwe 1 329.9 31.7% 7.0%

7 United Republic of Tanzania 676.4 34.2% 3.6%

8 Ghana 605.7 22.6% 3.2%

9 Mauritius 599.8 11.4% 3.2%

10 Democratic Republic of Congo 475.4 -6.6% 2.5%

TOTAL EXPORTS 18 954.3 34.0% 100.0%

TOP 10 WESTERN CAPE IMPORT MARKETS IN AFRICA, 2013

RANK EXPORTERSVALUE 2013

(ZARm)

% GROWTH

2012-2013

% SHARE

2013

1 Nigeria 13,591.5 -20.7% 44.1%

2 Angola 4,229.9 -65.1% 13.7%

3 Mozambique 3,346.7 -13.7% 10.9%

4 Ghana 2,926.1 110.1% 9.5%

5 Equatorial Guinea 2,682.7 342.4% 8.7%

6 Gabon 1,230.6 1347.9% 4.0%

7 Mauritius 922.9 28.1% 3.0%

8 United Republic of Tanzania 651.8 168.0% 2.1%

9 Madagascar 474.1 45.4% 1.5%

10 Zimbabwe 268.7 104.0% 0.9%

TOTAL IMPORTS 30 842.0 17.3% 100.0%

Western Cape exports to East Africa


TOP 10 WESTERN CAPE EXPORT MARKETS IN EAST AFRICA, 2013

RANK IMPORTERS

VALUE

2013

(ZARm)

% SHARE

OF SA

EXPORTS

% SHARE

OF WC

EXPORTS

% SHARE

OF WC

EXPORTS

TO AFRICA

1 Mozambique 3 779 14.2% 5.0% 19.9%

2 Kenya 2 286 31.3% 3.1% 12.1%

3 Zambia 2 004 8.1% 2.7% 10.6%

4 Zimbabwe 1 329 6.0% 1.8% 7.0%

5 United Republic of Tanzania 676 14.5% 0.9% 3.6%

6 Mauritius 599 22.1% 0.8% 3.2%

7 Malawi 280 6.0% 0.4% 1.5%

8 Uganda 107 6.4% 0.1% 0.6%

9 Seychelles 102 24.2% 0.1% 0.5%

10 Réunion 98 30.0% 0.1% 0.5%

TOTAL EXPORTS 11 592 11.7% 15.5% 61.2%

Mozambique

• Refined oils petroleum (ZAR2.6bn)

• Tobacco (ZAR87m)

• Fish (ZAR56m)

• Sauce, condiments, seasoning, mustard (ZAR50m)

• Fruit & veg juices (ZAR49m)

• Wines (ZAR33m)

• Furniture (ZAR25m)

Kenya

• Products of iron/steel (ZAR1.6bn)

• Grape wines (ZAR93m)

• Apples, pears (ZAR73m)

• Bitumen, asphalt, oil shales, (ZAR57m)

• Instruments for medical, surgical, dental use (ZAR28m)

• Polymers of styrene (ZAR15m)

• Industrial food & drink preparation machinery (ZAR12m)

Zambia

• Sulphur (ZAR587m)

• Fertilizer (ZAR130m)

• Refined oils petroleum (ZAR110m)

• Natural magnesium carbonate (ZAR89m)

• Prepared explosives (ZAR56m)

• Products of iron/steel (ZAR52m)

• Fruit & veg juice (ZAR43m)

• Sauce, condiments, seasoning, mustard (ZAR41m)


Zimbabwe

• Fertilizer (ZAR124m)



Tanzania


• Wines (ZAR49m)



Mauritius

• Fruit & veg juices (ZAR58m)

• Petroleum coke, bitumen & oil industry residues (ZAR55m)


• Cigars, cigarettes (ZAR25m)

• Prepared fish & fish eggs (ZAR16m)

Western Cape exports to West Africa



TOP 10 WESTERN CAPE EXPORT MARKETS IN WEST AFRICA, 2013

RANK IMPORTERS

VALUE

2013

(ZARm)

% SHARE

OF SA

EXPORTS

% SHARE

OF WC

EXPORTS

% SHARE

OF WC

EXPORTS

TO AFRICA

1 Nigeria 1 642 14.2% 5.0% 19.9%

2 Ghana 605 31.3% 3.1% 12.1%

3 Sierra Leone 332 8.1% 2.7% 10.6%

4 Côte d'Ivoire 181 6.0% 1.8% 7.0%

5 Benin 169 14.5% 0.9% 3.6%

6 Senegal 161 22.1% 0.8% 3.2%

7 Mali 123 6.0% 0.4% 1.5%

8 Togo 109 6.4% 0.1% 0.6%

9 Liberia 35 24.2% 0.1% 0.5%

10 Mauritania 29 30.0% 0.1% 0.5%

TOTAL EXPORTS 3 451 20.9% 4.6% 18.2%

Nigeria



• Wines (Zar105m)


• Passenger & goods transport ships/boats (ZAR56m)

• Liqueur, spirits (ZAR54m)


Ghana

• Liquid/gas centrifuges, filtering, purifying machines (ZAR136m)




• Fermented beverages, cider, perry, mead (ZAR21m)

• Wines (ZAR15m)

• Machinery to sort, screen, wash (ZAR14m)

Côte d’Ivoire



• Clay (ZAR15m)

Senegal



• Citrus (ZAR15m)

Benin



Sierra Leone




TOP 10 WESTERN CAPE EXPORT PRODUCTS TO AFRICA, 2013

RANK PRODUCTVALUE 2013

(ZARm)

% SHARE OF SA

EXPORTS

% SHARE

OF WC EXPORTS

1 Mineral fuels, oils, distillation products 3,624 39% 25%

2 Iron and steel 2,950 77% 33%

3 Edible fruit, nuts, peel of citrus fruit, melons 1,560 9% 75%

4 Beverages, spirits and vinegar 1,429 15% 51%

5 Salt, sulphur, earth, stone, plaster, lime and cement 796 87% 56%

6 Tobacco and manufactured tobacco substitutes 728 55% 99%

7 Vegetable, fruit, nut, food preparations 727 24% 55%

8 Fish, crustaceans, molluscs, aquatic invertebrates 338 10% 76%

9 Edible vegetables and certain roots and tubers 30 72% 46%

10 Cereal, flour, starch, milk preparations and products 237 93% 23%

11 Ships, boats and other floating structures 163 17% 64%

12 Printed books, newspapers, picture 145 56% 31%

13 Meat and edible meat offal 115 77% 20%

14 Meat, fish and seafood food preparations 115 18% 46%

TOTAL EXPORTS 18 954 25% 13%




TOP 10 WESTERN CAPE EXPORT PRODUCTS TO AFRICA, 2013 TOP 10 WESTERN CAPE IMPORT PRODUCTS FROM AFRICA, 2013

RANK PRODUCTVALUE 2013

(ZARm)

% GROWTH

2012-2013RANK PRODUCT

VALUE

2013

(ZARm)

%

GROWTH

2012-2013

1Oils petroleum, bituminous, distillates, except

crude3 360.0 140.4% 1 Petroleum oils, oils from bituminous minerals, crude 24 807.2 -20.6%

2Hot-rolled products, iron/steel, width>600mm, not

clad2 832.5 59.0% 2 Oils petroleum, bituminous, distillates, except crude 3 561.0 -10.5%

3 Apples, pears and quinces, fresh 1 217.7 53.7% 3 Men’s or boys suits, jackets, trousers etc. not knit 306.0 60.9%

4 Sulphur, except sublimated, precipitated, colloidal 643.5 72.3% 4 T-shirts, singlets and other vests, knit or crochet 265.1 42.8%

5Grape wines(including fortified), alcoholic grape

must620.4 27.8% 5 Oil-cake other than soya-bean or groundnut 154.4 47.5%

6Fruit and vegetable juices, not fermented or

spirited557.9 35.7% 6 Jerseys, pullovers, cardigans, etc., knit or crochet 134.0 6.9%

7Cigars, cigarettes etc, tobacco or tobacco

substitute540.9 -17.8% 7 Tobacco unmanufactured, tobacco refuse 128.0 197.4%

8Liqueur, spirits and undenatured ethyl alcohol

<80%474.5 27.7% 8 Men's or boys' shirts 120.4 20.6%

9 Fish, frozen, whole 296.8 31.2% 9 Women’s, girls suits, jacket, dress, skirt, etc., woven 98.5 65.8%

10 Fertilizer mixtures in packs of < 10kg 272.7 201.7% 10 Wood sawn, chipped lengthwise, sliced or peeled 89.7 5.6%

TOTAL EXPORTS 18 954.3 34.0% TOTAL IMPORTS 30 842.0 17.3%

Global FDI to Africa

An inspiring place to do businessSource: Financial Times, 2014

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Capex (ZARbn) 460,7 321,1 653,2 659,1 637,1 1 237 661,8 616,5 597,5 394,8 443,0

Projects 337 276 456 470 409 878 747 676 867 777 762

0

100

200

300

400

500

600

700

800

900

1 000

0

200

400

600

800

1 000

1 200

1 400

Pro

jectsVal

ue

(ZA

Rb

n)

GLOBAL INWARD FDI INTO AFRICA, 2003- DECEMBER 2013

TOP 10 GLOBAL COMPANIES INVESTING INTO AFRICA, 2003-2013

RANK COMPANY PROJECTSCAPEX

(ZARm)

1 Banco de Fomento Angola 69 5 177.9

2 Ecobank Transnational 29 2 574.9

3 IBM 28 6 508.7

4 Nestle 25 6 594.7

5 BNP Paribas 23 2 102.9

6 Nokia 23 1 132.5

7 Kenya Commercial Bank (KCB) 21 1 623.5

8 Credit Agricole Egypt 21 1 909.5

9 United Bank for Africa (UBA) 21 2 185.6

10 Banco Millennium Angola 21 1 254.8

TOTAL IMPORTS 6 655 6 682 542.8

South Africa was the 5th largest source market for FDI into Africa by the

number of FDI projects and 7th by the value of FDI

The top source markets for FDI into Africa were the United states, the

United Kingdom, United Arab Emirates, Canada, France and India.

South Africa was the top destination market for FDI into Africa by the

number of projects and 4th by value of FDI

The top destination markets for FDI into Africa were Egypt, Morocco,

Nigeria, Tunisia, Algeria and Angola.

The top destination markets for FDI

The top sectors for global FDI into Africa, in terms of projects attracted:

• Coal, oil and natural gas accounted for 37% of projects

• Real estate accounted for 16% of projects

• Metals accounted for 15% pf projects

In terms of the capital value of projects, the following was observed:

• Financial services accounted for 16% of capex

• Business services accounted for 8% of capex

• Communications accounted for 7% of capex

Global FDI with Africa


Source: Financial Times, 2014

Heat map of global companies into Africa Heat map of source countries for FDI into Africa

South Africa and Western Cape FDI to Africa


Source: Financial Times, 2014

Heat map of South African companies in Africa Heat map of Western Cape companies in Africa

Western Cape FDI to Africa

An inspiring place to do businessSource: Financial Times, 2014

2004 2005 2006 2008 2010 2011 2012 2013

Capex (ZARm) 257,9 277,7 675,3 1 401,9 2 156,6 3 484,2 886,1 2 093,0

Projects 2 3 4 8 6 23 8 9

0

5

10

15

20

25

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

Pro

jects

Val

ue

(ZA

Rm

)

WESTERN CAPE FDI INTO AFRICA, 2003-DECEMBER 2013

FDI from South Africa into Africa over the past 10 years reached R236bn

from 355 projects.

The Western Cape accounted for 18% of these projects and 5% of the

investment value

• 63 projects

• R11bn

Western Cape FDI was mainly into Nigeria, Angola, Zambia and Namibia.

The top sectors for FDI into Africa from the Western Cape in terms of

projects attracted, are:

• Food & Tobacco accounted for 40% of projects

• Consumer Products accounted for 16% of projects

• Financial Services accounted for 11% of projects

In terms of the capital value of projects, the top sectors are:

• Food & Tobacco accounted for 38% of capex

• Consumer Products accounted for 28% of capex

• Metals accounted for 14% of capex

TOP 10 WESTERN CAPE COMPANIES INVESTING INTO AFRICA, 2003-2013

RANK COMPANY PROJECTSCAPEX

(ZARm)

1 Shoprite 16 2 665.8

2 The Foschini Group 5 1 500.3

3 Belmet Marine 1 1 478.8

4 Woolworths (South Africa) 4 1 200.2

5 Pick n Pay 8 960.5

6 PetroSA 3 796.9

7 Clicks Group 3 233.1

8 Engen 1 191.8

9 Santam 2 178.5

10 Sanlam Group 2 143.0

TOTAL IMPORTS 63 11 232.8

Thank you | Dankie | Enkosi

Jacyntha Twynam, Head: Wesgro Research 23 July...

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