Although it is not a market for everyone, an aspect of which to be realistically aware when deciding to imprint a business expansion strategy, the African continent, and South Africa in particular, certainly does not hide its potential medium- to long-term opportunities.
The United Nations calls its economy emerging as it experiences the driving force of the spread of new technologies and the growth of the tertiary sector, as well as the majority presence of a young and better educated population. In fact, United Nations estimates track that by 2050 Africa will double its population, becoming the continent with the highest rate of urbanization.
In short, the African continent is certainly not a new international business frontier for Made in Italy. But it is also true that it is a country to be known in order to maximize investment, and therefore to be approached with rigor and method.
South Africa and its key industries
Speaking of expansion and internationalization on the African continent, the focus is more on South Africa, which is confirmed as the nation with the best economic prospects thanks to:
- an advanced system of infrastructure and trade links
- a sophisticated banking sector
- diversified opportunities for the development of investment and trade
Indeed, macroeconomic data tell of a rather solid state of finances (public debt at 69.5%); a GDP at current prices of $368.7bn (2022); market shares on world exports that have remained constant over the last 5 years (0.5).
EU/ITALY RELATIONS:
- EU is the largest trading partner
- Italy is South Africa’s 4th largest partner, after Germany, the UK and the Netherlands
- South Africa is the 39th destination market for Italian exports
- South Africa is the 1st destination market for Italian exports to sub-Saharan Africa
- Italian exports to South Africa: 2.38 billion euros 2022
- Italian imports from South Africa: 2.67 billion euros 2022
Thus, there are numerous opportunities that are concentrated in key sectors for South Africa:
- Agriculture, fisheries and forestry products (value €15bn)
- Mining and quarrying products (value 1.4bn euros)
- Automotive: invested +15bn rand
- Electricity, gas, steam and renewables: 5 wind farms (€950m funding); goals: more sustainable energy policy, ensure basic services and reduce harmful emissions
- Circular water recovery: programs to make water accessible (WMO and AWC); goals: implement innovative technologies, ensure water for future generations as well
- Construction and rail industry: allocated 33.5 bn euros for public transport, construction, cargo transport, aqueducts
What Business Opportunities to strategically cultivate?
Below is a summary that is certainly explanatory but not exhaustive:
- AUTOMOTIVE: 5th export item, total of 59mln euros (2021); components sector; almost all major car manufacturers have production/assembly plants in South Africa
- COKE AND PRODUCTS DERIVED FROM PETROLEUM REFINING: 1st item of Italian exports to South Africa; sales reached 353mln euros (2021); +400% compared to 2020
- OTHER MANUFACTURING INDUSTRIES: 2nd most important item of our exports (jewelry, costume jewelry; processed precious stones); 313 mln euros (2021)
- MACHINERY AND EQUIPMENT: machinery for manufacturing, mining, agribusiness and construction sectors
- CHEMICAL PRODUCTS: one of the strongest and most promising sectors; 78 mln euros (2021)
At Roncucci&Partners we help companies develop themselves and their business, embrace change and evolve to thrive in a world that is increasingly complicated, treacherous, and requires a great deal of expertise. We do this by applying timely methods and rigorous strategies, the result of many years of experience and the wealth that comes from the many success stories we have guided around the world. Passion and method are indeed our guides to enhance the present and build the future.
