Throughout our export assistance series, we have introduced Southern African businesses to export assistance programs that are currently running. In this series, we will focus on exporting from South Africa and begin introducing you to various forms of export assistance to help you export your products.
Exporting from South Africa in 2023
There is no doubt that the South African economy is currently struggling. Rampant inequality, rolling blackouts and several failing state-owned enterprises have crippled the ability of the private sector to remain operational, let alone competitive. However, it would be incorrect to say there is no hope for the South African private sector. Even under a highly challenging local and international business environment, numerous South African businesses and entrepreneurs have shown the world that they are resilient and competitive in the international market. For example, South African wine producers continue to win international awards, the automotive sector continues to attract global investment, and South African artists and designers have continued to make their mark on the international stage. 2023 Will undoubtedly be a turbulent time in international trade due to changing supply chain preferences and geopolitical tensions. However, the chaos of a changing global trade landscape presents numerous opportunities for businesses interested in exporting from South Africa. For example, several multinationals have realised the benefits of diversifying their supplier base due to the covid-19 pandemic. And there is a tremendous push to begin strengthening regional trade in Africa. Furthermore, the international community has committed large sums of support to improve their trade relationships with African countries.
The overlooked impact of exporting from South Africa
While we should celebrate the financial success of the businesses and individuals who have successfully begun exporting from South Africa, the knock-on effect their success has on the South African economy is often overlooked. Successful exporters from South Africa create local jobs, earn valuable foreign currency, and grow their businesses and profits. But most of all, successful South African exporters decrease their dependence on the South African economy while increasing their ability to contribute towards its resilience and efficiency. For example, businesses exporting from South Africa tend to pay higher wages, are more resilient to economic shocks and are more profitable due to economies of scale. Furthermore, businesses that engage in international trade are exposed to leading international trends and innovations through technology transfer which increases the efficiency of their own business and, in some cases, the efficiency of their local suppliers.
Could exporting from South Africa save your business from slowing domestic demand?
Any successful business owner will tell you that the difference between success and failure often lies in the ability to pivot quickly. In other words, your business should continuously be responding to the changing market environment. Thus, in the face of decreased local demand, it might be time to look abroad and diversify your customer base by exporting from South Africa. Exporting your products could be a lifeline to continue to grow revenues and mitigate the challenges of the local economy. However, exporting from South Africa is not without enormous risk. There are countless examples of exporters jumping into exporting from South Africa without understanding the complexity of international trade that have suffered severe financial consequences. So, while exporting from South Africa could save your business and help mitigate subdued local demand, it could also destroy your business if you are not ready.
How do you begin exporting from South Africa?
We are an organisation that believes that international trade can shape economies, reduce poverty, and increase the prosperity of all who live on the African continent. However, success relies on competitive businesses becoming export ready and confident in navigating the international trade environment. We have collaborated with the International Trade Institute of Southern Africa to create an on-demand digital resource to provide export assistance to all African exporters, including all you need to know about exporting from South Africa. For example, the TFSA School of Export digital resource’ export readiness’ module will help ensure you have taken all the necessary steps to approach exporting from South Africa with confidence. Furthermore, the TFSA School of Export has on-demand modules on international payment methods, trade finance, and incoterms® as well as a thriving community of people who want to help you and your business grow. Click the link below and sign up for FREE.
The risks involved in exporting from South Africa
Exporting from South Africa clearly benefits your business and the South African economy. However, exporting from South Africa and competing on a global level is extremely risky. As we discussed throughout our ‘Understanding the Global Trade Environment’ series, exporting from South Africa means having to contend with drastically different cultures, business norms, international bodies, and rules and regulations. Far too often, new entrants to the export market are lured in by the promise of new markets and increased profits without having the necessary knowledge, resources, or product to compete internationally. Unfortunately, several great companies could have been shining lights of excellence, but they began exporting from South Africa without developing or employing the necessary expertise to prepare their business and product for foreign markets. For example, in our ‘5 Common Mistakes Made in International Trade‘ article, we highlight the risk involved in marketing for exports before you are ready, agreeing to a payment method that exposes you to financial risk, opting for the incorrect mode of transport and misusing the ICC’s Incoterms® rules.
Seeking out export assistance could help mitigate the risks involved in exporting from South Africa
Recognising the risks involved in exporting from South Africa and the potential impact export success would have on all of Africa. Several South African Governmental departments, international development organisations and private sector institutions have begun to offer various forms of export assistance to ensure that South African businesses are ready to start exporting from South Africa confidently. For example, the UK-funded Trade Forward Southern Africa program has partnered with numerous business support organisations to offer the TFSA trade and information hub, the United States Agency for International Development is currently running the Southern Africa buy-in activity to increase South African exports to the US, and the South African DTIC has several export assistance schemes that they run. Where the private sector is concerned, the International Trade Institute of Southern Africa has been at the forefront of export capacity development. ITRISA Offers an internationally accredited Diploma in International Trade Management and has collaborated with TFSA to develop the TFSA School of Export, a free-to-use online exporter training system dedicated to increasing the ability of Southern African exporters. Furthermore, ITRISA has collaborated with the TFSA School of Export technology development partner Sound Idea Digital to develop commercial products that increase the exposure of Southern African exporters by establishing an internationally competitive digital presence.
Click here to sign up for the TFSA School of Export and explore the TFSA program.
to learn more about export assistance offered by USAID, visit www.usaid.gov/south-africa
to learn more about the International Trade Institute of Southern Africa, visit www.itrisa.co.za
to learn more about Sound Idea Digital, visit www.soundidea.co.za
to explore what sort of export assistance schemes the South African DTIC is currently running, visit www.thedtic.co.gov.za
To sign up to the School of Export CLICK HERE.
If you already have a profile, CLICK HERE to login to begin the module.
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