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Agoa vital for German companies in SA - CEO

Feb 03 2017 17:56
Carin Smith

Cape Town - German companies in South Africa will be watching developments regarding the future of the African Growth and Opportunity Act (Agoa) with keen interest, Matthias Boddenberg, CEO of the Southern African-German Chamber of Commerce and Industry, said.

"About 60% of German companies in South Africa are dependent on Agoa for at least 50% of their production," Boddenberg told Cape Town members of the chamber on Friday.

READ: German investors bet on positives in SA

"We know the US has extended Agoa until 2024, but we have to wait and see what the new administration might do. Without Agoa German companies in South Africa will simply not be competitive."

Another important factor for the chamber, he said, is the risk of a ratings downgrade of SA.

"There is a real risk of a downgrade and if it happens it will hit us so hard that there could even be the risk of a real recession in SA," said Boddenberg.

Trade relations

Trade relations between SA and Germany were not as good in 2016 as in 2015, he pointed out.

"The weakness, and especially the volatility, of the rand against the euro left a negative trail in the trade figures for 2016. We do not have final figures for the year, but what we can say is that SA exports to Germany will probably amount to about €6.1bn (about R87.9bn), while German exports to SA have probably shrunk by about 10% to €8.8bn (about R126.8bn) in 2016," said Boddenberg.

"All in all we expect the trade volume to have reached €14.87bn (about R214.3bn)."

In 2016 the chamber opened an office in Lusaka, Zambia. Another change during last year was the successful restructuring of the chamber's subsidiary, the South Africa German Training Services (SAGTS).

As for the chamber's activities in 2017, the first big event will be the German Africa Business Summit taking place in Nairobi next week. There will be about 180 participants, including high level government officials from Kenya and Zambia.

In April the chamber will host delegations - including business representatives - from Bavaria and Saxony.

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germany  |  south africa  |  agoa  |  sa economy

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