As South Africa seeks new export markets and trading partners – an immediate requirement to counter the impact of the US’s punitive “reciprocal” tariffs and massive geo-political shifts under way but also a longer-term necessity to build economic resilience by diversifying markets – we must focus on reciprocal trade that opens mutually beneficial opportunities.
We need to drive urgency in finding new markets, with the understanding that this does not happen overnight. Manufacturers, for example, typically plan production programmes for export markets up to three to five years in advance. High potential markets which we need to look at building trade relationships with include those in Europe, especially Eastern Europe; the Middle East; and the Far East. Closer to home we must further build reciprocal trade with the Southern African Development Community and high potential sub-Saharan Africa countries.
Participating in the business-focused aspects of the ninth Tokyo International Conference on African Development (Ticad9), held in Yokohama in August, underscored that South Africa needs to be leveraging its advantages with willing partners in trade, technology transfer and skills development.
It also highlighted how South Africa is falling behind on the African continent in terms of ease of doing business, accessibility to new investors and technology adoption.
The Nelson Mandela Bay Business Chamber’s Bay of Opportunity initiative was invited and hosted by the Japan External Trade Organisation (Jetro) at Ticad9, to showcase the investment advantages and potential of the metro as a diverse manufacturing base on the African continent. The invitation recognised the proactive, united approach being taken by the local business community to harness existing strengths in manufacturing technology and agro-processing in order to build a future economy responsive to both the challenges and opportunities presented by rapid technological advances and climate change mitigation.
Our vision, and belief in the potential of the Bay, is underpinned by the strengths of its automotive, general manufacturing and agricultural sectors; strategic location on global trade routes; and having two ports, one a deepwater port, along with natural assets including more than 300 sunshine days per year and the often-maligned wind that together present an exceptional location for renewable energy investment.
Initiated by Japan in 1993, and co-hosted with the United Nations, the United Nations Development Programme, World Bank and African Union Commission, Ticad operates on three pillars – economy, society, and peace and security – as a platform for international cooperation. This year it focused on “co-creating innovative solutions with Africa”, with 49 countries participating.
Together with Jendamark Automation and Sovereign Foods, selected by Jetro as examples of local companies with world-class, innovative solutions and products, we were invited to present a “reverse pitch” to an audience of potential Japanese businesses and investors.
Our joint presentation focused on the advantages and opportunities of the Bay, our collaborative approach to problem-solving and future-proofing the local economy, with Jendamark and Sovereign showcasing their production capabilities, global footprints and opportunities they see for collaboration and innovation with Japanese businesses.
In our meetings with various Japanese businesses, it was clear that Japan wants to increase trade with the growing markets of Africa, and that the country seeks mutually beneficial trading relationships rather than the mere extraction of minerals and other raw materials that currently dominates SA’s trading relationships with BRICS among others.
This approach to trade and investment is one that South Africa needs to pursue proactively, as other African countries are clearly doing, and we welcome the positive signals that came out of President Cyril Ramaphosa’s summit meeting with Japanese Prime Minister Ishiba Shigeru during Ticad, which now need to be manifested through action.
Notably, Ishiba emphasised that South Africa remains a key base on the African continent for Japanese business and conveyed Japan’s willingness to invest in the reform of South Africa’s energy sector.
At the same as looking to open up new markets, a trading relationship with an existing partner such as Japan, which dates back more than a century, is one that must be cultivated and strengthened. The country is the fourth-largest economy in the world, with investments by some 260 Japanese companies in SA valued at in excess of R90-billion and sustaining more than 150,000 local jobs. Bilateral trade in 2024 was R132-billion, with a surplus in SA’s favour of R52-billion.
That represents an opportunity for trade expansion that is based more on mutual benefit and volumes than being reliant on tariff advantages.
The hydrogen economy was a key focus in the Ticad expo and conference, and of particular interest for Nelson Mandela Bay as Japan is the key off-taker for the planned R105-billion Hive Hydrogen green ammonia plant to be developed in the Coega special economic zone. This project represents the biggest-ever inward investment into South Africa.
Africa is being seen as a focal point for green hydrogen and green ammonia production, with activity also in Namibia and the Suez Canal industrial development zone, and there is potential for developing a green hydrogen corridor connecting Namibia and Nelson Mandela Bay.
Although we have lost ground to other African countries in some respects, South Africa, with its strong industrial base, is still seen as a key player in terms of African trade – offering a level of regulatory certainty and robust financial systems, the backbone of a transport and logistics infrastructure that is slowly improving and opening up to private sector investment, depth of manufacturing capacity and mineral resources of value in renewable energy generation and mobility.
These are strategic advantages that South Africa needs to capitalise on, along with actively pursuing opportunities which are set to be opened up by the African Continental Free Trade Agreement (AfCFTA).
It was clear from presentations and discussions with other African countries at Ticad, that we can leverage our advantages far more effectively by being more open to collaboration with other countries on the continent, creating corridors for logistics and goods, manufacturing hubs that exploit each country’s particular strengths, and in technology cooperation, which together present an investment case that benefits all.
Ticad10 will be held in Africa, and South Africa needs to be ready. DM
Denise van Huyssteen is chief executive officer of the Nelson Mandela Bay Business Chamber