With the second-largest manufacturing economy in Europe and unique expertise in many sectors, Italy is ideally positioned to help South Africa step up in the global value chain – but foreign companies need to be guided by local role-players to understand the needs and expectations of the country, says Italian Embassy ambassador Pietro Giovanni Donnici.
He notes that South Africa is regarded as an advanced and diversified economy in Italy, and considered to be a leading country in African development. Over the years, many Italian companies have, thus, shown a growing interest in the country, fostering trade at a business-to-business level in a range of sectors, spanning construction, automotive, energy, domestic appliances, agroprocessing, biofuels, information and communication technology (ICT), logistics, chemicals and fashion, as well as water and waste management.
“There is a high level of similarity between the industrial systems of the two countries, which means that there is a lot of scope for them to mutually reinforce each other through strategic trade opportunities,” says Donnici.
He adds that the Italian business community and its policymakers are, moreover, showing a growing interest in Africa, and are well aware of the important role that South Africa plays in their plans to further extend their reach on the continent, owing to its democratic political system, independent judiciary, advanced financial services and reliable tax collection system.
He notes that Italy was ranked the top European country, and the fourth country overall last year in terms of the value it has provided in foreign direct investment in Africa, with key business opportunities identified in energy, agroprocessing, infrastructure, housing, ICT, ocean economy, and food and beverages, among others.
“Africa has significant potential and a stronger integration of the continent’s economies is essential for maximising this potential. As the most developed economy on the continent, South Africa has an integral role to play in achieving this, and Italian companies can play an active role in fostering this process through the sharing of knowledge and expertise.”
As every country has its own specific regulations, however, Donnici points out that it is only natural that a company entering a new market and a new economic and social system may face some challenges.
“The South African economic environment has legal and technical requirements that are, at times, very different to what Italian companies are used to . . . what is needed to navigate the challenges and mitigate the risks . . . is continuous and productive dialogue between businesses and local authorities, public regulators, the private sector and labour organisations.”
The Italian Embassy, in Pretoria, works to enhance this dialogue between the two countries and the two business communities by helping Italian businesses and policymakers to gain insight into South Africa, and vice versa. The embassy strives to provide Italian companies and investors with unbiased and accurate information on the local business environment by organising seminars between the Italian business community and local government bodies and private companies, thereby assisting the different parties in understanding one another through their own interactions, rather than through misleading accounts.
For example, the embassy is organising a matchmaking event in the aerospace sector between Italian and South African academia and businesses active in this sector later this year. “We know that South Africa has much more than commodities; it has first-grade research facilities and professionals. Italy has advanced manufacturing and research capabilities and we hope we will be able to bring these strengths together.”
Donnici stresses that the embassy is not alone in its endeavour to pair Italy and South Africa in areas where the countries display significant and complementary strengths, with the Consulate General in Johannesburg and the Consulate in Cape Town providing reinforcement, the Italian Trade Agency specialising in trade promotion, the Italian-South African Chamber of Trade and Industries liaising between businesses, the Italian Institute of Culture and the Dante Alighieri Italian Cultural Society driving Italian language and culture throughout South Africa.
“We have what we call a ‘Sistema Italia’ – a team of institutions and people coordinated by the embassy working continuously to strengthen the Italian-South African friendship.”
Crucial to developing this friendship is the fourth edition of the Italy-South Africa Summit, hosted by The European House: Ambrosetti from October 24 to 25 at the Hyatt Regency Hotel, in Johannesburg.
Donnici says the event further highlights the crucial role that dialogue plays when two countries want to intensify their relations, as it provides a poignant opportunity for policymakers and businesses to engage in discussions, underlining one another’s strengths and weaknesses, to find new paths of collaboration and establish, hopefully, long-standing business partnerships and even friendships.
“The idea is to reinforce a network of people interested in the growth of bilateral relations who are willing to make their businesses thrive together,” he concludes.