Africa Agenda - Country Analysis Part 1

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COUNTRY ANALYSIS PART I:
TRADE INTO AFRICA
Elsenburg
Louw Pienaar
Structure
•
•
•
•
•
•
Introduction
Why is Africa important
Trade Perspective
Trade into Africa
Product Focus
If Exporting to Africa, where?
• Identifying attractive markets
© Western Cape Government 2012 | Market Access
2
Introduction
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
© Western Cape Government 2012 | Market Access
3
Country Analysis
Understand
your position
Identify your
target market
Get to the
target market
Export ready
Market Scan
Market Zoom
Market Entry
Current
Situation
Market
Demand
Economy
Developed a
strategy
Trade
balances
Market
access
Governance
WC focus
Competition
Product
specification
Distance
Regional
Trade
Africa Focus
Risk
MAI
Population
Trade
What?
Agriculture
Where?
Water
Why?
Infrastructure
How?
Technology
Robust Strategy
Understand
your target
market
Consumption
Investment
Market Access
4
1) Why is Africa Important?
600
500
70
Total Imports
FDI Inflows
60
50
400
40
300
30
200
20
100
10
0
Value of FDI (USD Billions)
Value of Imports (USD Billion)
700
0
Source: Global Trade Atlas, 2013
© Western Cape Government 2012 | Market Access
5
2) Why is Africa Important?
8
6
GDP Growth rate (%)
4
2
0
-2
-4
-6
World
Sub-Saharan Africa
Advanced Economies
Source: Global Finance, 2013
© Western Cape Government 2012 | Market Access
6
3) Why is Africa Important?
Africa (% of World)
Africa (% of Urban Pop)
60
25
50
20
40
15
30
10
20
5
10
0
0
Population (% of Urban Population)
Population (% of world)
30
Source: UNCTAD, 2013
© Western Cape Government 2012 | Market Access
7
Regional Trade: Fresh Products
RSA Aggregate
Group Exports
%
Europe
58.1
Asia
24.6
Africa
9.7
America
7.1
© Western Cape Government 2012 | Market Access
8
Trade Perspective
South African Agricultural Export to Africa
2500
Total Agricultural Exports
Value in USD millions
2000
Total Agricultural Imports
Trade Balance
1500
1000
500
0
© Western Cape Government 2012 | Market Access
Source: World Trade Atlas, 2013
10
RSA Exports to Africa by type of product
1000
900
Value in USD (Millions)
800
700
600
500
400
300
200
100
0
Fresh produce
Semi processed
© Western Cape Government 2012 | Market Access
Processed
11
South African Exports of Fresh goods to Africa
Value in USD (millions)
250
200
150
100
50
0
Apples & pears
Citrus fruit
Grapes, fresh or dried
Soft Citrus
© Western Cape Government 2012 | Market Access
Potatoes
12
South African Exports of processed goods to Africa
180
160
Value in USD (millions)
140
120
100
80
60
40
20
0
Fruit & veg juices
Wine
Preserved fruits
Cut flowers
Dried fruit
Frozen fruits & nuts
© Western Cape Government 2012 | Market Access
13
Why is Trade Important to the Western Cape?
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
© Western Cape Government 2012 | Market Access
14
Product focus: Market Attractiveness Index
Africa Import Value RSA Export to Africa
2011 (‘000)
Value 2011 (‘000)
Fresh
1
2
3
4
5
1
2
3
4
5
Apples: 080810
Oranges: 080510
Potatoes: 070190
Grapes: 080610
Pears: 080820
380052
45034
82680
40038
29969
98159
16136
16626
9612
6928
Africa Import
RSA Export to Africa
Processed
Value 2011 (‘000) Value 2011 (‘000)
Wine: 220421
311770
45442
Fruit juices: 200990
150987
27054
Nuts preserved: 200811
41885
1693
Orange Juice: 200919
47114
8771
Fruit & plants nes: 200899
28757
1497
© Western Cape Government 2012 | Market Access
5-year annual
growth rate
25.12
4.88
17.17
20.90
26.51
5-year annual
growth rate
14.17
15.10
14.58
43.88
30.83
15
Africa as Export Destination
Identifying Attractive Markets in Africa
Market Attractiveness Index
• 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
© Western Cape Government 2012 | Market Access
17
Indicators Used: MAI
MAI
Product/market Specific
Import
Value
Import
Growth
World Imports
Country Specific
Tariff
Advantage Total Exports
Bilateral Tariffs
Tariffs Applied to
competitors
Distance
Country Risk
Advantage
Bilateral distance
Distance of
competitors
MacMap
Trademap
Market Access
CEP II
Coface
18
Steps in the MAI
All African
Importing
Markets
Algeria
Market Scan
Angola
1) Market Size
Benin
2) Market Dynamism
Botswana
3) Competition
Burundi
4) Market Openness
Cameroon
5) Distance
Cape Verde
CAR
Most
Attractive
Markets
Current
Markets
New
Markets
6) Cultural Proximity
…… 53
© Western Cape Government 2012 | Market Access
19
Results: Fresh products
Results: H080810: Apples, Fresh
Angola: Favourable access
and distance advantage
66.00
64.00
MAI Index
62.00
Algeria has massive import
demand, new market?
Top ten had exceptional
import growth
60.00
58.00
56.00
54.00
52.00
Market Access
21
Results: H080510: Oranges
Angola: Top on Market Access
index.
68.00
66.00
Sudan: Risky Market, big import
market
RSA export growth to Kenya 38%
64.00
62.00
60.00
58.00
56.00
54.00
52.00
Market Access
22
Results: H080510: Potatoes
Mozambique: Distance; access and
import growth of 43%
77.00
Zimbabwe fast growing importer of
potatoes and distance advantage
MAI Index
72.00
67.00
Senegal is the biggest importer of 24
million USD in Value
62.00
57.00
52.00
Market Access
23
Results: H080610: Grapes Fresh
MAI Index
Angola has highest market access
index and import growth of 45%
72.00
70.00
68.00
66.00
64.00
62.00
60.00
58.00
56.00
54.00
52.00
Market Access
Ghana, even though distance
disadvantage in 3rd place
Algeria biggest importer
24
Results: H080820: Pears
Algeria: Highest country demand
70.00
68.00
MAI Index
66.00
64.00
Algeria and Morocco is non-existing
markets
Angola, Zim and Mozam had > 40%
growth
62.00
60.00
58.00
56.00
54.00
52.00
Market Access
25
Results: Processed Goods
Results: H220421: Wine
MAI Index
Zambia: Highest demand growth
(70%); favourable access conditions
72.00
70.00
68.00
66.00
64.00
62.00
60.00
58.00
56.00
54.00
52.00
All of these are existing
markets
Angola highest import
average; easy access
© Western Cape Government 2012 | Market Access
27
Results: H200990 : Fruit juices
90
80
Angola: Distance, growth and
access conditions
70
MAI Index
60
50
40
30
20
10
0
© Western Cape Government 2012 | Market Access
28
Results: H200811: Nuts preserved
90
80
Nigeria is currently the biggest
importer with except growth
MAI Index
70
60
50
40
30
20
10
0
© Western Cape Government 2012 | Market Access
29
Results: H200919: Orange Juice
80
70
Angola: Distance, growth and
access conditions
MAI Index
60
50
40
30
20
10
0
© Western Cape Government 2012 | Market Access
30
Results: H200899 preserved fruit NES
90
80
70
MAI Index
60
Angola massive import
growth (87.2%)
Mozam and Mauritius
favourable access conditions
50
40
30
20
10
0
© Western Cape Government 2012 | Market Access
31
Aggregate Approach: Average MAI
Importer
MAI
Market Country
Import
Country
Access Demand
growth
Risk
Index Index
2007-2011 %
Growth in RSA
trade with
Partner 20072011 %
Zambia
72.10
82.39
61.82
6
44.89
24.5
Angola
72.06
80.58
63.55
6
20.85
21.9
Mozambique
71.15
89.19
53.10
6
17.43
5.2
Zimbabwe
69.93
64.01
75.85
7
75.09
63.9
Benin
67.71
67.15
68.27
5
41.97
31.2
Ghana
66.67
72.03
61.32
5
33.91
25.5
Nigeria
66.10
73.90
58.29
7
21.68
18.9
Mauritius
66.06
80.77
51.34
3
17.14
12.2
6
32.94
19.6
Kenya
63.79
68.83 58.74
© Western Cape Government 2012 | Market Access
32
Conclusion
• 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
© Western Cape Government 2012 | Market Access
33
Thank you
Contact Us
Louw Pienaar
Macro and Resource Economics
Tel: 021 808 5023
[email protected]
www.elsenburg.com
Fax:
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