While South Africa’s budget deficit is reason for concern, SMEs can help to boost exports if they receive enough support.
It is important to support SMEs in South Africa’s export sector as recent economic data paints a concerning picture of South Africa’s trade balance. Traditionally a higher exporter, the country now finds itself in a less than ideal scenario with imports climbing and closing the gap on exports, resulting in a fairly significant and growing, trade deficit.
According to the latest figures from August 2023, imports amounted to R168 billion, against exports of R181.3 billion, translating to a net trade surplus of just R13.3 billion. While this is more positive than a net deficit, the fact that imports and exports are largely on par is concerning in the longer term.
“As a result, many shipping vessels are bypassing South African ports for more efficiently managed alternatives. Poor rail infrastructure, slow economic growth and low levels of manufacturing activity are also contributing factors to this worrying situation.” “Given these pressing issues, South Africa urgently requires a comprehensive strategy focused on resolving challenges and mitigating risks, while also enabling businesses, particularly SMEs, to adapt. Of course, participants in SA’s export sector cannot expect government to fix the problems on its own.
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