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The SA Daily 20 February 2020

Germany-SA trade

  • In her two-day visit here two weeks ago, German Chancellor Angela Merkel said that German businesses would be keen to invest in SA but first would want to see less bureaucracy and more legal certainty. Indeed, such ideal conditions are what investors would want too before committing in long-term investment here. Indeed, President Ramaphosa’s government is set to improving the ease of doing business in SA, combatting crime and corruption, and implementing pro-growth reforms.
  • Current Germany-SA investment and trade relations are reasonable; any further German investment clearly would assist our growth and employment. In 2018, direct investment stock from Germany was R90.4bn, while SA’s direct investment stock to Germany was R56.5bn. Germany is SA’s third-biggest source of direct investment stock from Europe, after the Netherlands (R387.7bn) and Belgium (R191.8bn).
  • SA currently runs a trade deficit with Germany (chart below); nevertheless, the share of SA’s exports to Germany was 8.3% in 2019 (above the historical average of 6.3% 2001-2019) and also above SA’s share of exports to the United States (7.0%); United Kingdom (5.2%); Japan (4.8%); and India (4.6%). Germany is therefore an important SA trading partner. The trade deficit can be attributed to SA’s import values of vehicles (27.8%); machinery (21.4%), electrical machinery (10.6%), and optical, photographic at 5.7% (see footnotes below).

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