Guide to Export Markets for South Africa

Every country has its own export and import laws and regulations. In addition to laws, each country has its own export markets which allow them to send goods and raw materials to other countries. For business owners, export markets are great because they provide additional revenue and allow them to bring their products to markets outside South Africa.

Exporting is the process by which businesses from different countries sell their goods or services to companies or consumers in other countries. Some of the products which are exported to different countries include cars, cell phones, computers (and computer parts) and clothing (Shein).

If you want to expand your product reach outside of South Africa, you will have to be ‘fluent’ in export markets. This will ensure you stay above the law, and you can expand properly without falling behind locally.

In this guide, we explore the concept of export markets and how they work. Additionally, we will look at export markets available in South Africa.

According to research, total exports in South Africa reached $9.2 billion in August 2024. This represents a decrease of 4,8% compared to August 2023. These numbers showcase the amount of money that comes with exporting goods outside South Africa.

When it comes to where all these products are going, they are going to the trade partners of South Africa. Most of the products that come out of South Africa leave from Durban and end up in China which is our biggest trade partner.

Other big trade partners that South Africa has include:

• United States
• Germany
• Mozambique
• United Kingdom
• United Arab Emirates
• India
• Japan
• Netherlands
• Zimbabwe
• Botswana
• Vietnam

The above countries are just a few of the countries that are trade partners with South Africa. These represent our major African trade partners as well as those in Europe.

As we know each continent has its own union that deals with any major issues or opportunities that can affect the continent. Some of the unions include the EU, the African Union and the Association of Southeast Asian Nations (ASEAN).

South Africa has a good record when it comes to trading with the European Union (EU). Currently, South Africa is the biggest export market in Africa for the EU. This is strengthened by the 1999 South Africa-European Union (EU) Trade, Development and Cooperation Agreement also referred to as the TDC Agreement or TDCA.

The agreement was developed to strengthen the relations between South Africa and the EU. The agreement focuses on key areas such as trade, development and cooperation.

The primary exports from South Africa to the EU include fuels, mining products, machinery, transport equipment, citrus, grapes, wine and other semi-manufactured goods. The EU mainly exports machinery, transport equipment, chemicals and other semi-machinery goods to South Africa.

Benefits of the TDCA:

• The liberalisation measures implemented within the agreement mean that a large part of EU-South Africa trade is subject to preferential rates.
• Trade between the EU and South Africa has increased by over 100%.
• Foreign direct investment has significantly increased.

South Africa has a good trade partnership with the EU and the agreement is only going to strengthen the relationship between the two parties.

South Africa has been part of the BRICS committee since 2010. The BRICS partnership is made up of developing countries including Brazil, Russia, India, China, and South Africa (BRICS). More recently countries such as Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates have joined the BRICS partnership.

BRICS was formed to create a greater economic and geopolitical integration and coordination among the member states. When it comes to trade, South Africa benefits from the partnership through science, technology and innovation, energy, health and education cooperation.

South Africa’s exports to other BRICS countries have grown steadily since 2016, reaching $17,6 billion in 2022. The main beneficiary of the exports is China. Trade with Russia and Brazil is still relatively low compared to China.

Some of the products exported from South Africa include:

• Coal
• Iron ore
• Manganese
• Ferro-alloys
• Chromium ores

South Africa’s imports from other BRICS countries include:

• Petroleum oils
• Motor cars
• Electric accumulators

This showcases the strength between the BRICS members especially the relationship between South Africa and China.

As we mentioned above, South Africa exports products to many countries. Most of the products are natural resources (agricultural) that are found in South Africa, however, the country also exports precious metals and vehicles. The top 10 biggest exported products from South Africa include:

1. Gems and precious metals: $19,5 billion (17,7% of total exports)

2. Ores, slag and ash: $16,3 billion (14,7%)

3. Vehicles: $12,7 billion (1,5%)

4. Mineral fuels including oil: $11,9 billion (10,8%)

5. Iron, steel: $6,5 billion (5,9%)

6. Machinery including computers: $6,3 billion (5,7%)

7. Fruits, nuts: $4,3 billion (3,9%)

8. Aluminium: $2,3 billion (2%)

9. Electrical machinery and equipment: $2 billion (1,8%)

10. Cereals: $1,5 billion (1,4%)

When it comes to export products that exceeded South Africa’s spending on imported goods, these include:

1. Iron and steel: $4,9 billion (Up by 1.9%)

2. Vehicles: $4,3 billion (Up by 55,3%)

3. Aluminium: $1,6 billion (Up by 26,6%)

4. Oil seeds: $596,4 million (Up by 95,4%)

5. Gems and precious metals: $18 billion (Down by 28,9% since 2022)

6. Ores, slag, ash: $16,2 billion (Down by 0,1%)

7. Fruits and nuts: $4,2 billion (Down by 1,7%)

8. Wood pulp: $1 billion (Down by 2,4%)

9. Nickel: $731,9 million (Down by 33,1%)

10. Beverages, spirits, vinegar: $721,9 million (Down by 4%)

In addition to these exports, South Africa also has positive net exports in the trade of platinum, gold and diamonds. This showcases how competitive South Africa is in the gems and precious metals industry.

Note: The above statistics are from 2023. They are compared to stats from 2022.

South Africa is the one of the most advanced and productive economies in Africa. As we know, the country is the biggest African exporter of goods to the EU and has strong export partnerships with big economies such as China.

As positive as things seem, there are still challenges with factors such as tariffs and trade barriers.

Export Tariffs and Trade Barriers and Regulations

Some of the export regulations in South Africa outline what exactly is needed if you want to export goods from South Africa.

If you are a commercial exporter, you must register with South African Customs and the International Trade Administration Commission of South Africa (ITAC). The organisation is a public entity that was established under the terms of the International Trade Administration Act.

If you want to register with the ITAC, you can find the application form on the ITAAC website.

In addition to registering, you need to have an export declaration. The declaration is made electronically via the Export Customs Clearance Declaration. In some cases, South African Customs may ask you for a manual declaration.

Additional documents you might need include:

• Export invoice
• Transport documents (Bill of Lading, Airway Bill etc.)
• Export licence and other required documents.

If you need more information on licensing of export goods from South Africa, visit the links for the government notice and amended regulations.

Export Tariffs

When it comes to the barriers in South Africa, one of them is export tax (tariffs). Normally, export tax is zero-rated except on goods such as raw hides and skins, cigarettes and arms and ammunition.

Other barriers include licensing requirements, long processing setbacks, inefficient customs procedure, subsidies and other technical barriers. And although it might seem like these are in place to hinder people from exporting, they are not. The regulations are there to ensure everything is done above board and the tariffs are there to ensure the economy of South Africa benefits from the exporting of goods.

For first-world countries, South Africa is a great emerging market. There is great investments for large corporations as well as a diverse customer market. South Africa meets the measurements for an emerging market because there is huge growth potential, lower income populations, currency fluctuations and a volatile economy.

When it comes to exporting to other emerging markets Africa, South Africa has traded with other African countries such as Ghana, Nigeria and Kenya. Exports to those African countries are the best for South Africa.

Economic and Political Risks

Because of South Africa’s political and economic landscape, there is a lot of risk when investing in the market. Politically, South Africa is a risk because of the fragmentation that exists within the political landscape. An example of this was the 2021 unrest (July riots/Zuma riots) which produced a series of civil unrest across the country. The riots brought a lot of damage to businesses and although some have recovered, others had to be permanently closed down.

Economically, South Africa is still a huge risk for businesses. Some factors that show economic risk include the energy and logistics crisis with Eskom and Transnet. Other issues are poverty, high unemployment, and social risks like crime and corruption. Weak state-owned enterprises and low foreign direct investment also contribute to the problem.

These factors highlight the ups and downs of South Africa. From its emerging market advantages to its disadvantages such as crime and poverty. South Africa is not without its faults, however, South Africa is a unique case for investment.