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Boosting competition and promoting deeper regional trade integration are critical for restarting South Africa’s export engine to bolster economic growth, increase efficiency and productivity that would in turn create jobs and reduce poverty. This was said by Minister of Trade and Industry, Dr Rob Davies at the Manufacturing Indaba in Kempton Park today.

Minister Davies said that the government has identified the export sector as a key driver to of fastrack economic growth. He added that increasing exports, particularly in manufacturing, may be crucial for low-skilled job creation needed to substantially reduce high overall unemployment.

“It is imperative that South Africa leverages the devalued currency and the capabilities that exist to drive a national export effort with a particular focus on Africa. It is a well-documented fact that the economic and employment multipliers which arise from exports are significant. However our export basket remains too small and concentrated on primary products. But the fact that vehicle exports now account for  14.7% of exports demonstrates what can and must be done to ensure that value-added exports break SA’s  dependence on commodity exports,” said Davies.

Davies added that the country’s National Development Plan targets export volume growth of 6% a year, and tackling high unemployment is one of South Africa’s priorities.

“Effort should focus on global Original Equipment Manufacturers (OEM), existing exporters and those companies that can achieve export readiness, especially in key value chains such as automotive, rail, electro technical equipment, white goods and so on and so forth. It is why we are retooling our effort to focus on collaboration with export councils and why we are building an Africa Export Council. Our exports of automotives; mining and rail capital equipment; household consumables and agro-processed products and chemicals demonstrate important positive growth,” said Davies.

Minister Davies further stated despite the global economic uncertainty, South Africa will realise the objectives of the National Development Plan.

“Great uncertainty and volatility will continue and a variety of headwinds are likely in the future. But this is a marathon not a sprint and we have to work together for the long haul to propel South Africa towards faster growing exports and help the country realise its goal for the higher, more inclusive, job-intensive growth outlined in the National Development Plan,” stated Davies.

Minister Davies added that South Africa’s export market could benefit from deeper regional integration in goods and services within Africa, including creating production and service value chains that cut across national borders, and draw on all the region’s resources and capabilities.

“We see that with stronger trade relationships comes the right conditions for the emergence of a regional value chain of production that could feed into global production networks. For an example, intra-regional trade has risen from US$6bn to US$24 billion in the recent period. Trade negotiations in the Tripartite Free Trade Area (TFTA) are well on track and the TFTA will combine markets of 26 countries with a population of 625 million and a GDP of US$1.6 trillion. India is now SA’s 6th largest trading partner and trade is valued at R95 billion and exports to India now make up over 4% of exports.  It is imperative that in addition to our important traditional trading partners new markets are explored,” indicated Davies.

Minister Davies indicated that red tape reduction is also key to growing exports and promoting innovation.

“Favourable conditions and greater competition at home would stimulate export companies to innovate and to become more productive, drive down the costs of inputs for the export sector, and enhance incentives for more firms to enter the export market. Resolving infrastructure bottlenecks and cutting logistic costs present an opportunity to support export growth. Cutting charges exporters incur for the use of ports, rail and telecommunications would promote competitiveness and benefit small and medium-size exporters and non-traditional export sectors,” indicated Davies.

Issued by Department of Trade and Industry