Data coming in for the first four months of 2024 show a reduced flow of South African exports and increased imports, creating a near parity in the country’s trade balance for the first quarter of 2023. The small trade deficit of $68-million dollars is the first trade deficit since Q1 of 2019.

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The tilting of the balance is accounted for by a $1-billion dollar trade deficit during January this year and in the ensuing months South Africa has resumed registering a surplus in trade. Prior to this, South Africa was consistently registering healthy trade surpluses but the shift in fortunes is accounted for by a marked reduction in exports. This reduction is partly but not entirely owing to a reduced demand for raw materials such as precious stones and ore.

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Overall there is not evidence of any major change in either exports or imports. The relatively buoyant trade figures are, however, put into a more sober light by the phenomenon of inflation over the last year and a half, meaning that the quantity of actual goods procured are in fact likely to be lower. Furthermore, the trade impact of the currently high interest rates and the weak rand will remain to be seen.

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In this regard, Italy followed the same trend as the rest of the world, reducing imports of South African products, particularly precious stones, during Q1 after a record year last year. Numerous sectors nevertheless show real growth including copper, mineral fuels, vegetables, beverages and cereals, all of which registered at least a million dollars worth of annual trade and annual growth of more than 20% between 2018 and 2022.

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South Africa’s imports of Italian products proved to be robust during the first quarter of this year, with Italian fertiliser showing particularly strong growth in SA, alongside clothing and confectionary.  In theory the weakened Rand should dampen imports from Europe and boost exports but evidence does not yet back this. Even before the last months of weakening, the Rand had weakened by more than 25% to the Euro. One reason that this may not have benefitted exporters, is the dependence of larger manufacturers on machinery from Europe and other developed markets.

EU-Botswana Business Forum

Networking and Presentation Session

Monday 24 July

Hilton Sandton, 138 Rivonia Road