Exports will play an integral role in South Africa’s 2021 economic recovery.The economic outlook, both globally and locally, is expected to improve in 2021 on the back of positive developments pertaining to Covid-19 vaccination, and as domestic and foreign demand revives.Earlier this year, the Bureau for Economic Research said local (SA) exports should benefit from an expected, much-improved global economy and likely heightened global risk appetite as the global recovery gathered momentum. This was supported by the outlook of French bank BNP Paribas, which indicated that the weakness of the dollar to the rand and a recovery in the Chinese economy could support “key industrial and precious metal commodity exports”, which in turn could boost the contribution of exports to GDP growth.In September last year the government highlighted the importance of exports for economic recovery post-Covid. In the South African economic reconstruction and recovery plan, industrialisation is top of the agenda.“The strategic objectives are to reduce the proportion of imported intermediate and finished goods, improve the efficiency of local producers, and develop export competitive sectors that can expand the sales of South African-made products on the continent and beyond,” reads the report.According to Tim Harris, Wesgro CEO, plans are under way for the Western Cape to contribute significantly to the country’s export growth and the province is expanding current activities and implementing new initiatives to help scale up support to exporters.“Exporting to global markets limits dependence on South African market conditions, and brings foreign earnings into our economy. Buyers around the world have different tastes and different buying capacity, allowing for diversity of markets and niche markets that might not exist in South Africa,” he said. Harris said Western Cape exports had proved particularly resilient in a challenging 2020, posting a 7.4% increase, totalling R136.8 billion of goods exported. “This proves that the province is achieving export growth, and that there is indeed potential for further growth.”Agricultural exports in particular would be a large contributor to the economic recovery, not just for the Western Cape, but for the country, said Harris.According to Wandile Sihlobo, chief economist for the Agricultural business Chamber of South Africa (Agbiz), the country’s agricultural exports registered the second-largest level on record last year, amounting to $10.2 billion in 2020, which is a 3% increase from the previous year. This was primarily underpinned by large domestic agricultural output and favourable weather conditions.Furthermore, the relatively weaker domestic currency has also added to the country’s competitiveness in the global market.While most economists concede that forecasting remains difficult in a volatile health and economic environment, especially with growing talk of a third wave of Covid, the overall outlook for the economy is more bullish.Nedbank CE Mike Brown said this outlook was supported by firmer consumer spending, the rebuilding of domestic inventories, and notably stronger commodity prices and export growth, particularly during the second half of the year.In a challenging 2020, the Western Cape posted a 7.4% increase in exports.– Tim Harris“
