South Africa Logistics and TradeReviewSummarized from extended study by the Center forSupply Chain Research at Penn State
Trade Policy Overview• Most diversified economy in Africa• Ranked 79th out of 141 countries for inward FDI  performance   ...
African Free Trade Zone• Free Trade Zone created between three trade  blocs: SADC, COMESA, EAC    Announced October, 2008...
SADC & SACU• Southern African Development Community    Angola, Botswana, the Democratic Republic of     Congo, Lesthoto, ...
SADC: Gateway to Southern Africa• Market access to 14 countries• Member states are  committed to the  development of trade...
BRICS• South Africa now official 5th member of summit    Brazil, Russia, India, China & South Africa• Indicator of future...
South Africa as an alternative to theSuez CanalSuez Canal                        South Africa• Regional political unrest m...
South Africa as an alternative to theSuez Canal (continued)Suez Canal           South Africa
Logistics Overview• Ranked 28th of 155 countries for logistics and  supply chain performance    Source: The World Bank• L...
Transnet• Authority and operator of all major ports,  railways, pipelines and roadways• State owned company• Leading the r...
Ports• Eight deep water ports      Each serving specialized       market/cargo type• Controlled by Transnet• Ngqura (Coeg...
Rail• Most developed rail system in Africa     12,800 km core network     7,300 km branch network• Outdated infrastructu...
Rail (continued)• South African Government pushing for railway  integration with other African nations    Trade between A...
Key Takeaways• South Africa is one of the leading emerging economies in  the world     Newly included in BRICS summit• In...
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ExxonMobilSouthAfrica

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ExxonMobilSouthAfrica

  1. 1. South Africa Logistics and TradeReviewSummarized from extended study by the Center forSupply Chain Research at Penn State
  2. 2. Trade Policy Overview• Most diversified economy in Africa• Ranked 79th out of 141 countries for inward FDI performance  United Nations Conference on Trade and Development• Open market policy  Six major international trade agreements ▫ EU-TDCA, SADC, SACU-EFTA, SACU-India PTA, SACU- MERCOSUR PTA, AGOA• Significant Chinese FDI in South Africa and Sub- Saharan Africa  Potential to serve as low cost labor market in future
  3. 3. African Free Trade Zone• Free Trade Zone created between three trade blocs: SADC, COMESA, EAC  Announced October, 2008  26 countries with a combined GDP of U.S. $624bn  Lowered tariffs, import quotas
  4. 4. SADC & SACU• Southern African Development Community  Angola, Botswana, the Democratic Republic of Congo, Lesthoto, Madagascar, Malawi, Mauritias, Mozambique, Namibia, Seychelles, South Africa, Swaziland, Tanzania and Zimbabwe ▫ Eliminated tariffs and import quotas• South Africa, Botswana, Lesthoto, Namibia and Swaziland  Oldest customs union in the world
  5. 5. SADC: Gateway to Southern Africa• Market access to 14 countries• Member states are committed to the development of trade and transportation infrastructure Map Showing the Southern African Development Community
  6. 6. BRICS• South Africa now official 5th member of summit  Brazil, Russia, India, China & South Africa• Indicator of future potential  As wage rates increase in East Asian countries, labor intensive processes may shift to emerging African economies ▫ Six of the world’s fastest growing economies are on the African continent
  7. 7. South Africa as an alternative to theSuez CanalSuez Canal South Africa• Regional political unrest may • Less risk; political stability complicate trade • Could serve as a cross-docking• Risk of piracy surrounding point for large international eastern coast of Africa shipments• Less expensive, faster route • More expensive route between Asia and Europe
  8. 8. South Africa as an alternative to theSuez Canal (continued)Suez Canal South Africa
  9. 9. Logistics Overview• Ranked 28th of 155 countries for logistics and supply chain performance  Source: The World Bank• Logistics market valued at U.S. $41 billion• Outdated infrastructure; renewal underway
  10. 10. Transnet• Authority and operator of all major ports, railways, pipelines and roadways• State owned company• Leading the renewal of South Africa’s infrastructure
  11. 11. Ports• Eight deep water ports  Each serving specialized market/cargo type• Controlled by Transnet• Ngqura (Coega) Industrial Development Zone  One of many recent constructions to modernize infrastructure & promote Ports: Richards Bay, Durban, Saldanha, Cape Town, Port Elizabeth, East trade London, Mossel Bay, and Ngqura (Coega)  Located at Port Elizabeth
  12. 12. Rail• Most developed rail system in Africa  12,800 km core network  7,300 km branch network• Outdated infrastructure  Average locomotive fleet age is thirty three years• Renewal  South African Government investment ▫ U.S. $4.5 billion over the past four years ▫ Additional U.S. $5.2 billion underway  GE to update locomotive fleet with new diesel and electric models ▫ Contract worth U.S. 7.49 billion
  13. 13. Rail (continued)• South African Government pushing for railway integration with other African nations  Trade between African nations will be made easier and less expensive  Infrastructure expansion a priority within the African Free Trade Zone
  14. 14. Key Takeaways• South Africa is one of the leading emerging economies in the world  Newly included in BRICS summit• Infrastructure is outdated, but undergoing modernization  Heavy investment both by the South African Government, and other governments (e.g. China)• African continent as a whole is moving forward  Six of the top ten fastest growing economies were on the African continent  South Africa in a key strategic position as a gateway to other African nations  As nations grow, so will demand for consumer products (e.g. Mobil 1)

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