1. Elsenburg Louw Pienaar COUNTRY ANALYSIS PART I: TRADE INTO AFRICA

2. © Western Cape Government 2012 | Structure Market Access 2 Introduction Why is Africa important Trade Perspective Trade into Africa Product Focus If Exporting to Africa, where? Identifying attractive markets

3. © Western Cape Government 2012 | Introduction Market Access 3 Africa is important on various levels. Everyone is talking about Africa Trade, Investment, value-adding, Resources, human capital, Land etc. How do we use Agriculture Aim of the research Introduce the topic Stimulate discussion Help develop strategy

4. Understand your position Identify your target market Understand your target market Get to the target market Export ready Current Situation Trade balances WC focus Product specification Regional Trade Africa Focus Market Scan Market Demand Market access Competition Distance Risk MAI Market Zoom Economy Population Governance Trade Agriculture Water Infrastructure Technology Consumption Investment Market Entry Developed a strategy What? Where? Why? How? Country Analysis Robust Strategy Market Access4

5. © Western Cape Government 2012 | 1) Why is Africa Important? 5 Source: Global Trade Atlas, 2013 Market Access

6. © Western Cape Government 2012 | 2) Why is Africa Important? 6 Source: Global Finance, 2013 Market Access

7. © Western Cape Government 2012 | 3) Why is Africa Important? 7 Source: UNCTAD, 2013 Market Access

8. © Western Cape Government 2012 | Regional Trade: Fresh Products RSA Aggregate Group Exports % Europe58.1 Asia24.6 Africa9.7 America7.1 Market Access 8

9. Trade Perspective

10. © Western Cape Government 2012 | South African Agricultural Export to Africa 10 Source: World Trade Atlas, 2013 Market Access

11. © Western Cape Government 2012 | RSA Exports to Africa by type of product 11 Market Access

12. © Western Cape Government 2012 | 12 South African Exports of Fresh goods to Africa Market Access

13. © Western Cape Government 2012 | South African Exports of processed goods to Africa 13 Market Access

14. © Western Cape Government 2012 | Why is Trade Important to the Western Cape? 14 Market Access Role in the Economy Link to Economic Growth Development Production increases WC Exports in goods have grown from R25.1 billion in 2001 to R54.7 billion in 2011 (annual compounded rate of 9.3%) Agriculture The most dominant export sector in the province Contributes to 4% of GDP, together with linkages 10-12% Employment: Agriculture employs 6.5% of regional workforce WC Exports 30% of it’s annual production In 2011, close to 50% of total Exports were Agricultural products

15. © Western Cape Government 2012 | Product focus: Market Attractiveness Index 15 Processed Africa Import Value 2011 (‘000) RSA Export to Africa Value 2011 (‘000) 5-year annual growth rate 1Wine: 2204213117704544214.17 2Fruit juices: 2009901509872705415.10 3Nuts preserved: 20081141885169314.58 4Orange Juice: 20091947114877143.88 5Fruit & plants nes: 20089928757149730.83 Fresh Africa Import Value 2011 (‘000) RSA Export to Africa Value 2011 (‘000) 5-year annual growth rate 1Apples: 0808103800529815925.12 2Oranges: 080510 45034161364.88 3Potatoes: 070190826801662617.17 4Grapes: 080610 40038961220.90 5Pears: 08082029969692826.51 Market Access

16. Africa as Export Destination Identifying Attractive Markets in Africa

17. © Western Cape Government 2012 | Market Attractiveness Index Market Access 17 ITC methodology used to create composite index Combines the following Trade related statistics into one index Market Demand Market Access “A Composite index is formed when individual indicators are compiled into an single index, on the basis of an underlying model of multi-dimensional concept that is being measured” OECD

18. MAI Product/market Specific Country Specific Import Value Import Growth Tariff Advantage World Imports Trademap Total Exports Distance Advantage Bilateral Tariffs Tariffs Applied to competitors CEP II MacMap Bilateral distance Distance of competitors Indicators Used: MAI Country Risk Coface Market Access18

19. © Western Cape Government 2012 | Steps in the MAI 19 Market Access Current Markets New Markets Most Attractive Markets 1) Market Size 2) Market Dynamism 3) Competition 4) Market Openness 5) Distance 6) Cultural Proximity Market Scan Algeria Angola Benin Botswana Burundi Cameroon Cape Verde CAR …… 53 All African Importing Markets

20. Results: Fresh products

21. Results: H080810: Apples, Fresh Angola: Favourable access and distance advantage Algeria has massive import demand, new market? Top ten had exceptional import growth Market Access21

22. Results: H080510: Oranges Angola: Top on Market Access index. Sudan: Risky Market, big import market RSA export growth to Kenya 38% Market Access22

23. Results: H080510: Potatoes Mozambique: Distance; access and import growth of 43% Senegal is the biggest importer of 24 million USD in Value Market Access23

24. Results: H080610: Grapes Fresh Angola has highest market access index and import growth of 45% Ghana, even though distance disadvantage in 3 rd place Algeria biggest importer Market Access24

25. Algeria: Highest country demand Results: H080820: Pears Angola, Zim and Mozam had > 40% growth Market Access25

26. Results: Processed Goods

27. © Western Cape Government 2012 | Results: H220421: Wine 27 Market Access Zambia: Highest demand growth (70%); favourable access conditions All of these are existing markets

28. © Western Cape Government 2012 | Results: H200990 : Fruit juices 28 Market Access

29. © Western Cape Government 2012 | Results: H200811: Nuts preserved 29 Market Access

30. © Western Cape Government 2012 | Results: H200919: Orange Juice 30 Market Access

31. © Western Cape Government 2012 | Results: H200899 preserved fruit NES 31 Market Access

32. © Western Cape Government 2012 | Aggregate Approach: Average MAI 32 Market Access ImporterMAI Market Access Index Country Demand Index Country Risk Import growth 2007-2011 % Growth in RSA trade with Partner 2007- 2011 % Zambia72.1082.3961.82644.8924.5 Angola72.0680.5863.55620.8521.9 Mozambique71.1589.1953.10617.435.2 Zimbabwe69.9364.0175.85775.0963.9 Benin67.7167.1568.27541.9731.2 Ghana66.6772.0361.32533.9125.5 Nigeria66.1073.9058.29721.6818.9 Mauritius66.0680.7751.34317.1412.2 Kenya63.7968.8358.74632.9419.6

33. © Western Cape Government 2012 | Conclusion 33 Market Access Trade is important in the Western Cape and the Agri-sector play prominent role in the economy Dependence on Traditional markets, these are slowing down: looking at alternatives Africa has capacity increase to import products. South African products have seen good growth over the last 5 years. Attractive markets have been identified: Angola, Zambia, Mozambique, Nigeria and Ghana stand out for every product. Next step is to analyse the specific countries in more detail

34. Thank you

35. Tel:Fax: www.elsenburg.com Contact Us Louw Pienaar Macro and Resource Economics 021 808 5023 louwpp@elsenburg.com