South African firms should shift their expansionary strategies northwards, targeting the growing economies of sub-Saharan Africa that were increasingly buttressed by an emerging African middle class and expanding consumer base, Econometrix director and chief economist Dr Azar Jammine said on Friday.
“South Africa should look to the sub-Saharan [region] for growth . . . which is [emerging as] a saviour for the South African economy.
“Recent trade figures are demonstrating how important sub-Saharan Africa (SSA) is becoming for South Africa,” he told a Business & Marketing Intelligence-Building Research Strategy Consulting Unit (BMI-BRSCU) strategic forum, in Johannesburg.
South African exports to SSA in 2014 comprised 30.5% of the country’s total export basket value – ahead of exports to Europe (23.4%) and only slightly behind exports to Asia (30.9%).
Jammine cautioned South African companies active in oil-producing countries like Nigeria and Gabon that moribund commodity prices would continue to weigh heavily on economies in sub-Saharan Africa.
BMI-BRSCU principal consultant Dr Llewellyn Lewis added that South African companies – particularly in the engineering and construction sectors – were prioritising SSAin their growth and development strategies.
Murray & Roberts reported in February that 93% of its profits before interest and taxes and 65% of its revenue in the six months ended December 31 had come from outside South Africa.
