Cape Town has excellent trade links with the rest of Africa. City-based companies invest in the rest of the continent strengthening Cape Town’s status as a business hub for the continent. Wesgro’s Trade and Investment Report 2019 gives a good snapshot of Cape Town’s biggest trading partners. Here are some highlights
Exports to the rest of Africa
Cape Town and the Western Cape’s exports to the rest of Africa totalled USD3.4bn in 2017, increasing by 5.3% during the year while imports grew by 12.3% reaching a cost of USD2.8bn. Africa is the largest destination region for Western Cape exports, followed by Europe.
The largest exports to Africa were:
Refined petroleum oil (USD558.98m),
Flat-rolled iron (USD185m),
And tobacco (USD122m).
The largest growth in exports:
Refined petroleum oils (81%)
And packaging goods (57%).
The largest imports from Africa were:
Crude petroleum (USD1.9bn),
Frozen fish (USD69m)
And shirts (USD67m).
The largest growth in imports was for beer, scents used in manufacturing and petroleum gases.
Cape Town companies are investing in Africa
Africa is the Western Cape’s largest global destination region for outward FDI both in terms of projects (54%) and Capex (54%) between 2008 and September 2018. This was followed by Western Europe accounting for 17% of projects and 17% Capex.
Over the past 10 years, outward FDI from Cape Town had an annual average growth of 95% in terms of Capex and 54% in terms of projects (FDIMarkets,2018).
Up to 79% of all outward FDI from Cape Town into Africa in terms of projects were in the:
Food and beverages sector,
Software and IT sector,
Financial and business services sector,
And consumer products sector.
The largest investing companies for outward FDI from the province by number of projects were Shoprite (27), Pick n Pay (10), Carrick Wealth (9), Naspers (9) the Foschini Group (7) and Woolworths (7). These companies made up 55% of outward African investment from the province from 2008 – Sept 2018.
In terms of Capex, the largest sectors for outward FDI from the Cape Town into Africa over the last decade were:
Real estate (ZAR17bn),
Consumer products (ZAR8.3bn)
And food & tobacco (ZAR7.7bn).
This Capex investment accounted for a combined 72%. The largest investing companies by Capex were Shoprite, Novare Equity Partners, Woolworths, The Foschini Group and Distell accounting for 70% of total outward Capex into Africa from 2008 – September 2018
Around 10 of the biggest Cape Town-based companies with an annual turnover exceeding ZAR9bn have expanded into Africa. These include amongst others Santam Ltd, Distell Group Ltd, The Foschini Group Ltd, Truworths International Ltd and Shoprite Holdings Ltd.