Europe Beckons

The Economist’s opinion of US President Donald Trump’s “Liberation Day” is that it was actually “Ruination Day”. The reversals were as dramatic as the tariff increases. How these actions play out remains to be seen, but we can be certain it will not be good for South Africa. As I have stated in previous communications, Africa is a burgeoning potential market, but this will take time to reach its full potential.

The table below indicates that South African exports to the EU are equal to China and the US combined, which represents a more obvious growth opportunity in the near term.

In addition to being our biggest export partner, the EU also has the largest FDI investment in South Africa. WOW was commissioned by the EU Delegation in Pretoria to provide a snapshot of the extent, source and location of EU investment in South Africa to help inform its engagements with EU business and the South African government on bilateral investment constraints and opportunities. The research is based on EU holdings exceeding 10% in South Africa-based companies in the WOW database.

The graph below shows the results of this research.

Source: Who Owns Whom

As is clear from the following graph, Germany has the largest FDI footprint in South Africa, including well-known names such as Alstom Rolling Stock, Allianz Global, Air Liquide, BASF, Steinmuller Africa, DEKRA, MAN Bus & Coach, Mercedes-Benz. Siemens and Munch Re, but also some lesser-known companies such as Manroland, which manufactures and services printers.

Bombela Civils, Murray & Roberts and Standard Engineering are important players in infrastructure building, as is seed manufacturer Monsanto in agriculture.

Source: Who Owns Whom

The final graph indicates that the most EU FDI is in manufacturing, including major beer manufacturer, Belgian-based AB InBev (owner of SAB) and less-known Austrian company, Agrana Fruit and French seed companies, Alliance Seeds and Limagrain.

Source: Who Owns Whom