The Department of Trade and Industry’s (DTI’s) Trade and Investment South Africa (Tisa) division on Wednesday launched a new development programme aimed at bolstering South African exporters’ readiness to compete globally.
The National Exporter Development Programme (NEDP), Tisa’s flagship programme, served to boost the country’s slower-than-anticipated advancement into export markets, industrialisation and broad economic growth by reigniting the country’s “dormant” exporter base.
The nationwide plan aimed to enable exporter readiness through the identification of key products and markets, as well as skills enhancement, knowledge sharing and support, Trade and Industry Minister Dr Rob Davies said on Wednesday.
Currently, South Africa was well below the 9% to 15% acceptable critical mass export-orientation level for any sector or economy to gain competitiveness and benefits from trade processes, he commented.
The plan, which supported and aligned with the aims of South Africa’s current policies, including the New Growth Path, the National Development Plan, the National Industrial Development Framework and the Trade Policy and Strategic Framework, would assist and prepare exporters, particularly small, medium-sized and micro enterprises, to enter global markets.
The intended outcome of the NEDP would be increased exports, particularly those of value-added products and services that contributed to employment and a green economy, as outlined in the fifth iteration of the Industrial Policy Action Plan, which would be launched on Thursday.
It would also strengthen the changing export market.
Davies pointed to a major repositioning of trade wherein trade with traditional partners, such as the European Union (EU), was lagging; however, trade with emerging economies was rapidly increasing.
Trade between South Africa and EU countries, except Germany, and other developed regions had remained below 2008 levels, with indications that slower growth would remain for a long time.
Trade with dynamic emerging economies, particularly the countries within the Brazil, Russia, India, China and South Africa, or Brics, grouping, which provided untapped trade potential, was growing rapidly, rising well above pre-2008 trade levels.
However, many small South African firms did not meet the requirements or have the means to successfully establish a presence in international markets and exploit such opportunities.
Davies said South Africa was currently importing a great deal more than it was exporting, citing the country’s February current account deficit of R9.52-billion. South Africa had exported goods valued at R62.3-billion, but had imported goods valued at R71.8-billion. In January, that deficit had reached R24.5-billion.
PROMOTING EXPORT-READY COMPANIES
Those that had succeeded in exports had reached a level of “export readiness” – in other words, the companies that were well versed in trade trends and knew their target markets well. The successful firms also identified demand and competition, while ensuring sufficient and realistic production capacity.
To this end, the NEDP envisaged the development of an export village or consortium that would enable voluntary, medium- to long-term strategic cooperation between firms to promote and facilitate the export of goods and services of members through joint actions.
Further, a Global Export Passport programme embedded within the NEDP would focus on export capacity building and the training of emerging and experienced exporters to ensure their export-ready status and sustainability in the international market.
“The programme aims to build on existing activities and capacities of the DTI, provincial Economic Development departments, provincial trade and investment agencies, the Small Enterprise Development Agency and other international and local stakeholders to ensure the delivery of key interventions to emerging and experienced exporters,” the DTI explained.
The NEDP was not a one-size-fits-all plan and catered for the requirements of companies, depending on their level of export development.
Five phases of export development were identified, namely, the explorer, the export-aware enterprise, the export-ready company, the start-up exporter and the global exporter.
The explorer company was still in the phase of examining options of developing an enterprise, of which exporting was a possibility, while the export-aware business was aware of what exporting entailed but lacked the basic skills.
The DTI described the export-ready enterprise as holding the basic skills but requiring the development of an export marketing plan, after which the firm would transition into a start-up exporter.
The global exporter was an experienced exporter, but may want to develop new markets or products to grow further.
Further, it was suggested in the NEDP outline that a National Export Council be established by the DTI to advise and assist with all export development and promotional issues.
Tisa deputy director-general Pumla Ncapayi added that the NEDP would provide trade information services, assistance with export promotion activities and mentoring or advice, and would be supported by a national information network and an export call centre and integrated website.
The plan also proposed the establishment of a monitoring and evaluation framework to ensure aims were achieved and action taken where necessary.
Davies added that government was "opening the doors", but that businesses and industry stakeholders also needed to participate as export development was a collaborative task.
Tisa would initiate and drive the programme’s implementation over the next few months as the DTI embarked on a year-long awareness programme across all nine provinces.
Following a final round of consultation with stakeholders in the near term, the NEDP would be fully implemented in a “step-by-step” manner.