Cape Town - Wesgro will be working with Western Cape businesses to mitigate the negative effects of Britain’s exit from the European Union, it said on Friday.
“Today's result has introduced significant uncertainty for those Western Cape businesses that export to the UK, or service British clients in the tourism sector,” said Tim Harris, CEO of the Western Cape’s margeting, investment and trade promotion agency.
The UK was the largest investor in the Western Cape, responsible for a quarter of all investment into the province. It was ranked in the top two markets for the Western Cape in trade, investment, and tourism.
Many UK investors into the province operated out of Britain because of how open and connected that market was to the world, he said.
“Brexit has now called that into question, which has led to an increase in economic uncertainty. Wesgro will be reminding companies from the UK that the Cape is a safe, secure investment destination that can provide a stable base for them to grow new markets in South Africa and the rest of Africa.”
Over the past 12 years, UK companies invested in 62 greenfield projects worth over R15bn. In recent years, Wesgro facilitated six UK investments worth over R330m, creating 143 jobs.
Last year, exports to the European Union were valued at R33 billion. The United Kingdom accounted for 36% of these purchases.
The UK bought R1.5bn worth of wine, R1.2bn worth of apples and pears, and R4.8bn of citrus from the Western Cape in 2015.
Exports to Europe were covered by European treaties like the Trade, Development and Co-operation Agreement, and the recently signed Southern African Development Community-EU Economic Partnership Agreement.
“Once Brexit comes into play, however, South Africa would need to sign a free trade agreement or similar trading arrangement with the UK, or risk the ‘most favoured nation’ principle becoming applicable, putting our exporters at a significant disadvantage,” he said.
Business Unity SA said it was concerned about the Brexit’s immediate impact on the rand and local markets. It had supported the UK remaining in the EU, due to the importance of trade with the EU.
“The long-term implications of Brexit on the local economy are yet to be fully understood,” it said in a statement.