Pakistan’s Exports to S. Africa face downfall

Pakistan’s exports to South Africa fell 38 per cent over the past couple of years due to many obstacles to the expansion of bilateral trade. Pakistan’s exports to the African nation declined to $184m in 2015-16 from $294m in 2013-14. Pakistan has a share of 0.3pc in the total imports of South Africa. South Africa’s total international trade in 2015 was $172bn, consisting of $85bn exports and $87bn imports.

The reasons for the increase in Pakistan’s trade deficit given by the Ministry of Commerce were a slowdown in the South African economy and a sharp depreciation in the rand, the South African currency.

Pakistan’s major exports to South Africa are cement, cotton fabric (woven), made-up articles of textile materials, synthetic fabrics, leather, iron and steel manufacturing. 

 According to the commerce ministry, South Africa applies high customs tariff on products that are of export interest to Pakistan.

 Currently, the customs tariff rate is 95pc on textile made-ups, 42pc on knitted garments, 28pc on articles of leather, 28pc on footwear, 42pc on woven garments, 22pc on carpets, 27pc on sugar and confectionery, 22pc on cotton fabrics and 25pc on meat.

The South African economy moved into recession with the reported decrease of 0.7% in GDP during the first quarter of 2017, on the back of a 0,3% contraction in the fourth quarter of 2016. South Africa has experienced seven economic recessions since 1961, the longest occurring over two years, 1991 and 1992, mainly as result of a global economic downturn and the political specificities of South Africa then. The most recent recession occurred over three quarters in 2008/09, on the back of the global financial crisis.

 In the first quarter of 2017, both the secondary and tertiary sectors recorded negative growth rates. The trade and manufacturing industries were the major heavyweights that stifled production, with trade falling by 5,9% and manufacturing by 3,7%.

Economists say agriculture is the beacon of hope for South Africa's declining economy. The sector contributed 12.8 percent to the Gross Domestic Product for the first quarter of the year, despite poor output in the Western Cape due to the ongoing drought.