TRADE AND INVESTMENT

AUSTRALIA–SOUTH AFRICA: BILATERAL TRADE AND INVESTMENT RELATIONS CONTINUE TO STRENGTHEN

GITA KAMATH, Australia’s High Commissioner to South Africa, offers a positive message: Australia and SA will continue to look for ways to grow and broaden the scope of their relationship through shared resilience and agility

Australia–South Africa relations continue to grow, underpinned by strong government, business, sporting and cultural links between our two countries. While we might in some respects be trade competitors and fervent sporting rivals, our common values, southern geographies, shared challenges, and strong mineral endowments mean we both have much to gain by working even more closely together.

The contemporary bilateral relationship has its roots in the resolute opposition of successive Australian governments to apartheid. Australians joined people from across the globe in protesting and sanctioning the abhorrent inequality and conduct of the apartheid regime. And were delighted to welcome the new South Africa into the international community in 1994.

THE AUSTRALIA–SA TRADE BALANCE

Our strong economic relationship is the clearest, if somewhat under-appreciated, evidence of our countries’ ties. South Africa is Australia’s largest trading partner on the continent. While bilateral trade was temporarily dampened by the Covid-19 pandemic, in 2021, Australia’s two-way merchandise trade with South Africa was valued at over R31-billion – split almost evenly between exports and imports. South Africa makes up more than a third of Australia’s merchandise trade with Africa. In 2021, over 11 000 vehicles made in South Africa were exported to Australia, with a value of some R4.3-billion.

Bilateral investment is also relatively balanced between the two countries. In 2020, total two-way investment was valued at some R157.2-billion. Overall, Australia is the eighth-largest foreign direct investor in South Africa and ASX-listed companies are the largest foreign investors in South Africa’s mining sector.

South32 and Richards Bay Minerals, a subsidiary of Rio Tinto, are the two largest Australian investors in KwaZulu-Natal, providing direct employment to some 7 000 people, with in excess of 35 000 downstream jobs also created. In March 2022 at the President’s 4th Investment in South Africa Conference, ASX-listed firm Renergen pledged to invest a further R14-billion in mining beneficiation as it develops LNG and helium reserves in the Free State. Orion Minerals is looking to commence mining in 2022 at its Prieska copper/zinc project in the Northern Cape, while West Wits Mining’s new Johannesburg project is already producing gold ore. Besides resources and energy, Australian investment in South Africa covers a range of other sectors, such as retail. For example, Cotton On operates some 170 stores in South Africa and operates its largest store globally in the Mall of Africa in Midrand, Gauteng.

OTHER IMPORTANT LINKS

The substantial people-to-people links between South Africa and Australia are a major driver of the relationship. South Africans are now the seventh-largest migrant group in Australia. Undoubtedly, these bonds and diaspora connections promise to stand the bilateral relationship in good stead moving forward. The opening of Australia’s borders and the recent resumption of direct Qantas flights between Johannesburg and Sydney are thus extremely welcome developments. Australia and South Africa cooperate on a number of exciting science and technology projects that are generating new commercial opportunities for industry in both of our countries. The Australiandesigned and co-funded Digital Earth Africa platform – which is hosted by the South African National Space Agency – uses opensource technology to translate satellite data into decision-ready maps and information, allowing policymakers, scientists and the

private sector in Africa to address social, environmental and economic challenges. This project, along with the ground-breaking Square Kilometre Array – the world’s largest radio telescope, jointly hosted by South Africa and Australia – are catalysts for innovation and new technologies with broad commercial applications. Australia and South Africa share many challenges related to climate change; however, our continents are also blessed with abundant sources of renewable energy as well as the metals and minerals vital to the transition to a low-carbon economy. There are substantial opportunities for our respective countries to share expertise and knowledge in support of climate action and energy transition, including in the emerging renewables and clean hydrogen sectors.

IN CONCLUSION

We continue to look for ways to grow and broaden the scope of the bilateral trade and investment relationship. In addition to the work of my offi ce and the Australian Trade Commission (Austrade), the Australian Business Chamber of Commerce for Southern Africa based in Johannesburg continues to strengthen. The Australia Africa Chamber of Commerce based in Melbourne is also working hard to expand trade between Australia and Africa. During the Covid-19 lockdown last year, both business chambers, supported by the Australian High Commission and Austrade, sponsored a webinar which looked closely at South Africa’s BroadBased Black Economic Empowerment (B-BBEE) policies and the investment environment. Speakers included B-BBEE Commissioner Zodwa Ntuli and Invest South Africa Head Yunus Hoosen. The webinar provided Australian investors and traders with valuable insights into the business environment in South Africa. We live in a time of great fl ux in which global developments, although perhaps geographically far removed from our shores, create considerable uncertainty. It will take the combined efforts of political, labour, business and civic leaders in both our countries to guide us through this era. I am confi dent that our countries’ resilience and agility – thankfully both cornerstones of our respective national psyches – will ensure we adapt and thrive in the shifting global landscape. For more information on the Australian High Commission in Pretoria: Email pretoria.info@dfat.gov.au Twitter @AuHCSouthAfrica Facebook @AuHCSouthAfrica LinkedIn australian-high-commissionsouth-africa

GITA KAMATH

AUSTRALIAN HIGH COMMISSIONER TO SOUTH AFRICA

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