Trade credit insurer Atradius has published a report on South Africa for businesses trading, or considering trading, within the country.
The South Africa Country report analyses trading conditions with a review of the economic and political situation within the region alongside a performance outlook across 12 key sectors. As information is the bedrock of sound trade, the free report is a tool for businesses in assessing the opportunities and risks of trading with South Africa.
The report reveals that the UK is South Africa’s fifth biggest export market, accounting for 5% of its total exports. China is the largest of South Africa’s export markets, receiving 9.1% of total exports, followed by Germany at 7.4%, USA at 6.4% and India at 5.6%.
South African economic growth was weak in 2018 at less than 1% and in Q1 2019 GDP contracted 3.2% quarter on quarter, the largest decline since the 2008 global financial crisis. Confidence indicators are expected to gradually improve in H2 due to the election outcome. However, GDP growth is forecast at just 0.6% for 2019, rising to 1.6% in 2020, as it will take time for the effects of reform to show. The report also highlights a rise in business insolvencies with an increase of 30% year-on-year to March 2019. With a subdued performance in manufacturing and mining alongside a struggling consumer sector, linked to weaker household spending, it is expected insolvencies will increase further.
The African National Congress (ANC) won the May 2019 parliamentary elections with President Ramaphosa known to be business friendly and planning to implement reforms to improve the business climate and combat corruption. However, he will face economic and political challenges.
Richard Reynolds, head of strategic accounts of Atradius UK, said: “The South Africa Country Report is one of hundreds of economic and trading reports published by Atradius to provide businesses with insight into their import and export markets. With experts on the ground around the world, Atradius has a unique intelligence into global markets and can provide first-hand, real-time information and advice into the opportunities and risks of doing business not only within the wider market but with a specific customer. It’s why Atradius is relied upon as a trade partner to businesses, supporting them to mitigate risk and build a strong platform for growth. With uncertainty dominating the global agenda, this type of support is essential in order to thrive whatever the future brings.”