Export Week Insights and Trends Dec 2020

Key insights and trends in export highlighting structural shifts before and after 2016, Africa's export growth opportunities, challenges faced from 2016-2019, and the impact of COVID-19 on supply chains, trade, and exports. Comparative analyses of continental and global exports, with a focus on KZN's market share. Detailed visual representations and data on export trends from 2000 to 2019.

• Export Week
• Insights
• Trends
• Africa
• COVID-19

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1. Export Week - Dec 2020

2. TIKZN Your Partner In Growing The Province Through FDI And Export Trade Export Week Setting The Scene

3. 2019 Exports KZN exports weight by continent Region 2019 Weights Rank Africa Asia Europe Americas Oceania Not Allocated Antartica 25,6% 27,9% 30,0% 14,1% 1,3% 1,0% 0,0% 3 2 1 4 5 6 7 As share of KZN s global products exports, Africa ranks 3rd There is scope to improve on the ranking.

4. KZNs Longitudinal Exports Share KZN Continental Exports as % of Total Exports -2000 to 2019 45,0% 40,0% 35,0% 30,0% % of Total Exports 25,0% 20,0% 15,0% 10,0% 5,0% 0,0% 2002 2004 2006 2009 2011 2016 2018 2000 2001 2003 2005 2007 2008 2010 2012 2013 2014 2015 2017 2019 Oceania Africa Europe Antartica Americas Not Allocated Asia

5. Key Insights Trends in export highlight the structural shifts taking place before 2010; before 2016; and after 2016. Africa presented huge exports growth opportunities during/after global crises, with low logistics costs (2007- 2009). The prognosis for 2020/2021 post COVID-19 is similar. Africa exports peaked over 5 years (2011 2015), higher than Asia, Europe and Americas. The period 2016-2019 was challenging; dip in market share from 2018 to 2019. Covid-19 threw a spanner in the works: distorted supply chains activities; constricted trade and cash flows; and led to closure of businesses, negatively impacting on jobs and exports volume.

6. Continental Exports (all commodities) - Comparative Trend Analyses

7. Global Exports Comparative Trend Analysis (Global) SA Global Exports VS KZN Global Exports (2000-2019) - All Commodities SA VS KZN Exports World (2000-2019 - Rmillions) 1400 000 1200 000 Trade-off between SA and KZN exports to the World. KZN s exports market share slightly improved in 2018 but dipped in 2019. Scope to increase KZN exports share. 1000 000 800 000 600 000 400 000 200 000 - 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 SA Exports to World KZN Exports to World 5 per. Mov. Avg. (SA Exports to World) Structural break occurred in 2009 due to the global economic and financial crises. Consistent in all comparative graphs.

8. Continental Exports Comparative Trend Analysis (Asia) SA Exports VS KZN Exports to Asia (2000-2019) SA VS KZN Exports Asia (2000-2019 - Rmillions) Trade-off - SA and exports to Asia. KZN exports market was uninspiring in 2018 dipped in 2019. China Japan Asia also form part of Top 5 export destination for SA. 450 000 KZN 400 000 share 350 000 300 000 and 250 000 and from 200 000 150 000 100 000 50 000 - 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 SA Exports to Asia KZN Exports to Asia 5 per. Mov. Avg. (SA Exports to Asia)

9. Continental Exports Comparative Trend Analysis (Europe) SA Exports VS KZN Exports to Europe (2000-2019) Trade-off - SA and KZN exports to Europe. SA VS KZN Exports Europe (2000-2019 - Rmillions) 400 000 350 000 300 000 Encouragingly, KZN market increased between 2017 and 2019. Germany and UK Europe form part of Top 5 export destination for SA. exports share 250 000 200 000 150 000 from also 100 000 50 000 - 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 SA Exports to Europe KZN Exports to Europe 5 per. Mov. Avg. (SA Exports to Europe)

10. Continental Exports Comparative Trend Analysis (Americas) SA Exports VS KZN Exports to Americas (2000-2019) SA VS KZN Exports Americas (2000-2019 - Rmillions) 120 000 100 000 80 000 60 000 40 000 20 000 - 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 SA Exports to Americas KZN Exports to Americas 5 per. Mov. Avg. (SA Exports to Americas) Trade-off - SA and KZN exports to Americas. KZN exports market share increased (2015- 2018) but dipped in 2019. The USA from the Americas also forms part of Top 5 export destination for SA.

11. Continental Exports Comparative Trend Analysis (Africa) SA Exports VS KZN Exports to Africa (2000-2019) SA VS KZN Exports Africa (2000-2019 - Rmillions) 400 000 350 000 300 000 250 000 200 000 150 000 100 000 50 000 - 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 SA Exports to Africa KZN Exports to Africa 5 per. Mov. Avg. (SA Exports to Africa) Trade-off - SA and KZN exports to Africa. KZN exports market share slightly improved in 2018 but dipped in 2019.

12. SA Exports to World and Africa Riding the COVID-19 Storm KZN Exports - Global and Africa (ZAR - Quarterly) 45000000 000 40000000 000 35000000 000 30000000 000 25000000 000 20000000 000 15000000 000 10000000 000 5000000 000 - World Africa 2019 was difficult for KZN exporters as the economy struggled, underpinned by a technical recession. 2020 saw the COVID-19 storm significantly reducing KZN exports value to Africa in the first 6 months the lowest for the period under consideration.

13. Opportunities for Export Trade in Africa Africa is still a market despite currently down, due to COVID-19 Companies need to re-strategise to boost Africa export trade and maximise gains from the AfCFTA. The AfCFTA holds a lot of potential for KZN companies. To explore untapped African markets. To enter markets/RECs with no existing trade agreements with SA (ECOWAS, ECCAS, AMU). Relatively weak exchange rate, an advantage to local exporting companies. Downside risks still prevail on the continent though. Lower than expected demand from poor commodity exports and weakened prices; Heightened policy and political uncertainty; Prolonged exposure to both demand and supply shocks; and Escalating conflicts and protectionism may dampen regional outlook and trade.

14. Basis/Rationale for Export Trade in Africa Prospects for KZN Export Demand Firming export competitiveness (Europe and USA - to some extent - provide a good base). Optimism that regional and global economic growth will rebound next year, post COVID-19. Africa remains a key exports destination given current distortion of supply chains further north of the globe. Role of TIKZN and mother body EDTEA is to support export- oriented manufacturing; in line with the National Industrial Policy Framework. Export Development Strategy for KZN Businesses Africa focus, with tailored market entry strategies. Varied promotional channels will be used to boost trade on the continent. Share South African best practices - open-up new markets.

15. Basis/Rationale for Export Trade in Africa (cont.) Continue with mirroring, matchmaking and twinning arrangements between companies. Exhibitions and trade fair events; create B2B and/or B2C synergies on the continent. Quick wins. AfCFTA presents an opportunity for trade with countries in African regions with no trade agreements (Viz: ECOWAS, ECCAS, AMU). AfCFTA provides a platform to deal with contentious issues (NTBs including language, Standards, Specifications, etc.). Spill-over benefits from COVID-19 Storm. SA businesses now keen on promoting local value chains (sourcing of raw materials and inputs); reduce dependency on China and other efficient producers of the East. Changing focus from short-term profits maximisation to long- term sustainability and growth (Case of Foschini and Woolworths deciding to source inputs/goods locally). Logistics companies to capitalize on regional supply chains frailties boost trade.

16. Conclusion KZN Companies should be ready to explore the continent and minismise role of external value chains. Abundant political will and buy-in to support local companies aiming to export to the rest of the continent exists. The AfCFTA presents an opportunity for SA businesses to increase market share in Africa. Reduce dependency on SADC (inclusive of SACU); explore key RECs. Trade creation and trade diversion from AfCFTA will create opportunities for SA companies in these regions. African countries are committed to the course - Improving on business environment, economic infrastructures and trading conditions in anticipation of the AfCFTA-World s largest FTA. AfCFTA augurs well for exports from KZN to the rest of Africa; businesses should be ready; no own goals!!