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Get off the Island – There’s business across borders!

Get off the Island – There’s business across borders!

There is a deteriorating void and total lack of passion in South Africa when it comes to international trade development as possibly the fastest avenue to economic (medium-term) growth and job creation. Governments much awaited National Exporter Development Programme seems stalled in bureaucracy and will undoubtedly not address the tailored needs of businesses in the Western Cape or nationally.

After 15 years of internal growth, where we all continued to buy and sell from/to each other fuelled mainly by local demand, the order book ‘well’ is dry and recession coupled with fear and ignorance of the unknown, are paralysing our companies whilst the rest of the hungry world joins the feeding frenzy for Africa’s 5% plus continental growth.

Get off the Island – There’s business across borders!

The sooner we change the language from ‘exports’ to ‘international trade’ the better. The emphasis on developing Cape Town as a destination for trade opportunities, must encompass the broader view of international trade where we ‘syndicate for success’ exploiting our location in terms of access for companies and international partners to the SADC’s 200+ million consumers.

‘Exporting’ does not encompass the solutions that need to be tailored for the market hubs of opportunity in Africa. If we are to be attractive and compete we need to embrace the power of partnerships that promote a blend of joint ventures, technology exchange, royalty agreements, franchising opportunities, licensing agreements, joint use of production and office facilities, marketing each other’s products and services and coaching and mentoring our businesses on how to accomplish this.

These partnerships need to be formed here and in the target markets and with other international companies to increase our footprint and our hold on sustainable business across borders. At present practical implementation is lacking, uncoordinated at best and resources diluted and misplaced.

Promoting our local training institution’s offerings, our resident marketing skills, our distribution channels (as a trans-shipment /supply-chain point between Central/South America and South/Far East Asia), are just some of Cape Town’s USPs which all add to the greater marketing mix. We cannot compete on ‘me too’ commodity products and services, but in terms of location, our access to Africa’s markets provides benefits such as speed and convenience, ease of communication, after sales service, attractiveness to buyers (to visit us), with quality and technology not yet promoted effectively to our African partner countries.

Most importantly all companies commencing this journey into new markets need to ‘Know Before You Go’. Market information and market intelligence are the critical starting point and all too often hapless companies are encouraged to join subsidised trade missions or exhibitions, set-up to fail through lack of planning and awareness and the funds to go the distance.

Firstly assessing companies in terms of their readiness for the market and the opportunities presented is a critical and generally badly managed intervention by the various trade and development agencies. Its critical to talk of the ‘pull’ and not the ‘push’ approach to trade development. Typically SA companies enter the markets on a trade mission with briefcase and brochures hoping to sell what they currently provide rather than first understanding what the market needs!

Cultural affinities between Africa, Asia and South America (Brazil) are helping to increase trade between the continents and developing countries over the last 10-15 years became centres of consumption. We need to see our greater Africa ‘partnerships in trade’ as a springboard to the BRICS and beyond. Operating only from our South Africa ‘island’ diminishes our strategic opportunity in the long-term. We need to accelerate the awareness of Cape companies to this scenario and help them plan and access the markets effectively.

Get off the Island – There’s business across borders!

As a London newspaper recently published. ‘There is a new Africa emerging, powered by capitalism, embracing globalisation and finally shaking off the shackles of colonialism and the cold war that proved so crippling to development. Poverty is far from banished – it’s a grinding way of life for millions – but their numbers are falling fast. The global top 10 includes Ghana, which grew by more than 14% in 2011 and whose cherished democracy sets such a great example; Mozambique, rising like a phoenix from the devastation of a long civil war; and Nigeria, the continent’s potential superpower. Bundle all African countries together and they have grown faster for much of the past decade than East Asia.

Unfortunately, this message is failing to filter through to South African business, where too many remain locked into stale narratives of Africa as a land of suffering in need of South Africa’s ‘superpower’ salvation. Our arrogance is to our long-term detriment. We need to get off the island and go and get intimate with the neighbours with newly open minds!

Peter Hurst
9th Jan 2013

Article posted by Peter Hurst

Posted in: Africa, International Trade

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