Economic ties between Germany and South Africa
Germany is one of South Africa's most important trading partners. As a trading partner, in 2017, Germany ranked second, behind China and ahead of the USA.
In 2016, goods worth about 6.2 billion Euro were exported to Germany. In the same period, South Africa imported goods from Germany worth approximately 8.8 billion Euro. German companies in South Africa contribute significantly to employment, vocational training and technological development. This is underscored by a wide range of technology transfer.
Today, South Africa trades globally and ranks as one of the most powerful economies in Africa. Wide-ranging macroeconomic reforms have improved competitiveness and boosted the economy, thus playing a substantial role on the global market. This is supported by a highly developed financial, legal, communications, and transport infrastructure. In addition to its role as an important emerging economy, South Africa is also seen as a bridge to other African markets by investors.
South Africa accounts for a tremendous amount of mineral reserves worldwide and is Africa's largest power producer. Next to mining and a world-class financial sector, a wide variety of services is a key of the South African industry.
German companies in South Africa
Major international companies are represented in the “bridge to Africa”. Among these, numerous German businesses with established offices and manufacturing facilities in South Africa, for example, BASF, Bayer, Bilfinger Berger, BMW, DHL, Deutsche Bank, Lanxess, Mercedes Benz, MTU, SAP, Siemens, ThyssenKrupp and Volkswagen. There is a broad spectrum of small and medium-sized German enterprises based in South Africa. The approximately 600 German firms established in South Africa have created over 100,000 jobs. Apart from the traditional economic sectors for which South Africa is renown new industries such as the energy and infrastructure sector, the information and telecommunication industry, clean tech as well as the health care market are considered attractive future markets for German companies.
Trade record between Germany and South Africa
With 15 billion Euro the bilateral trade between t South Africa and Germany reported a good trade volume in 2016. Compared to 2015, exports to Germany increased by 5 percent to 6.2 billion Euro and imports from Germany decreased by 8 percent to 8.8 billion Euro.
The year 2016 has yet again highlighted the strong economic ties between South Africa and Germany: Despite the relatively weak economic growth of 0.3 percent in South Africa, Germany remained South Africa’s second largest trading partner and also a major investor. South Africa’s imports from Germany in 2016 amounted to 11.8 percent of total imports. The country’s exports to Germany account for 7.45 percent of total exports.
Imported finished products have lost in value (by 7.34 percent), but still amount to 85 percent of total imports. Agricultural products and semi-finished products descended in value, whereas the share of agricultural products of the total imports descended from 3 to 2 percent.
A continued volatility of the South African currency poses a potential benefit and risk simultaneously. While it could negatively influence South African imports from Germany, it should help South Africa to intensify its exports to Germany, leading to a reduction of South Africa’s trade deficit.