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Africa’s Emerging Trade Partners 1

In December of 2010, South Africa was officially invited to join Brazil, Russia, India and China as a member of the BRIC economic block.  These countries are all emerging economic powers that are predicted to become more prominent over the next few decades.

However, Simon Freemantle, with Standard Bank Research, says, “It’s very warranted, the attention they’ve been given, but I think it has been to the detriment to some of Africa’s other very important emerging world partners.  If you look beyond BRICS, you’re looking at countries like Turkey. Trade this year (2011) is expected to be around $19 billion and was around $16 billion last year.  That puts them on a very favorable footing, even in comparison to the BRICS nations.”

Turkey, in fact, is really starting to break out of its shell on a global economic level.  As Freemantle notes, the Turkish Prime Minister took a trip to South Africa in 2011 and, “sees Africa as part of Turkey’s reorientation towards this multi-polar world that we see.”  With economies in the Euro Zone and United States taking big hits over the past few years, countries are starting to look to other parts of the world with which to do business.  “Turkey’s looking to increase its exports globally to $200 billion in the next five years. Africa is going to be part of that as they look to export low cost manufactured goods, as well as textiles and other products into Africa’s rising consumer markets.”

The Trade Minister of Indonesia was also a recent guest in South Africa and is looking to do more business on the continent.  “One of his central ambitions is to really elevate Indonesia’s trade with emerging world partners.  They’ve been really successful in integrating with Southeast Asia and China, but Africa’s a priority on a number of levels.  South Africa-Indonesia trade this year will only be around $1.4 billion, (however) the trade minister’s indication was that that volume should go up to around $5 billion.”

You can also expect to see Saudi Arabia starting to get involved with Africa, but more so for agricultural purposes as food shortages are forcing them to start importing from elsewhere. Thailand may be a smaller player than the countries already mentioned, but they are also expected to start doing big business within the Africa continent.  As the middle class grows in Thailand, their appetite for food like meat and dairy, which are not abundant in the country, grows.  They will look to Africa to supply them with this food.

Other than agriculture, Africa is also expected to see growth in imported manufactured goods and ICT.  “I think there’s a lot of growth potential left in telecommunications in Africa,” notes Freemantle, “and we will see certain companies ambitiously unlock those opportunities.”

Mining, resources, and agriculture are still expected to hold on as the go-to industries on the continent though. Freemantle says, “I think that mining and agriculture will continue to be the core, but increasingly we’ll see some activity around some of the supportive sectors, such as ICT and financial services.”

While Freemantle recognizes that the United States, Europe, and Japan will continue to be very powerful, relevant commercial players in Africa, he believes that they will re-orient their strategies based on the rising competition from BRICS and other emerging markets.  Freemantle concludes that

“There are more players, there’s more interest, and that’s a very good thing for Africa.  But, it’s a good thing if we realize that it’s not a substitution, as much as it is an addition to what existed in the past.

Source: Afribiz

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  1. […] AFROLINE shows how South Africa’s admittance to the BRICS has stirred interest in the continen…This is one of the biggest stories on the continent in the coming year as economies of the world no longer focus on North America and Europe. This is a massive opportunity for Sub-Saharan Africa to make sure that investment is more beneficial to their economies. The inferiority that SSA countries have in respect to European and American power is not in play with these news economic partners and as such countries on the continent can hopefully gain from more equitable trading terms. […]

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