Germany is one of the largest investors in South Africa with more than 370 German companies in South Africa. As one of South Africa`s most important trading partners, the trade balance remains very favourable to Germany, but in recent years there has been an improvement with an increase in South African exports to Germany. Germany was South Africa`s second largest bilateral trading partner in 2017 (behind China and ahead of the United States); With a trade volume of more than €17 billion, South Africa was Germany`s most important partner on the African continent in 2018. South Africa is an emerging country. A large part of the population lives in poverty. The EU is by far South Africa`s most important development partner and provides a significant share of funds for external aid. The asymmetrical nature of the Economic Partnership Agreement (EPA) means that African signatories are not obliged to respond with the same level of market opening that the EU offers. Germany is located in the moderately cool westerly wind zone of the Atlantic and in the continental climate of Eastern Europe. In winter, the average temperature is between 1.5 degrees C in the lowlands and 6 degrees C in the mountains. During the hottest month of the year, July, temperatures range from 18 degrees Celsius in low-lying areas to 20 degrees Celsius in protected valleys in the south. It rains all year round, but especially during the summer season. Today, South Africa trades worldwide and is considered one of the most powerful economies in Africa. Far-reaching macroeconomic reforms have improved competitiveness, stimulated the economy and thus played a key role in the global market.
This is supported by a highly developed financial, legal, communication and transport infrastructure. In addition to its role as an important emerging market, South Africa is also seen by investors as a bridge to other African markets. Bilateral commitments in the field of financial and technical cooperation since 1994 total around EUR 1.5 billion. As part of the government negotiations in 2018, additional funding totalling €152.6 million was promised. These resources will be used to strengthen cooperation in agreed priority areas, as well as to anticipate new trends in digital transformation and possible approaches in the link where energy, water and governance overlap. Particular emphasis is placed on cooperation with the private sector, including with a view to mobilizing private funds for development, as well as for employment. Trade relations between South Africa and Europe are of paramount importance to the South African economy. 38.5% of South Africa`s world trade is generated with the EU (40.4% including the rest of Europe). Within the EU, the UK and Germany are South Africa`s most important trading partners. Since the EU and South Africa concluded a Trade Cooperation and Development Agreement (TDCA) in 1999, the two sides have enjoyed a strong and growing trade relationship.
In June 2016, the EU and South Africa – along with Botswana, Lesotho, Mozambique, Namibia and Swaziland – signed the Southern African Economic Partnership Agreement (SADC EPA), which regulates trade in goods between the two regions, replacing the TDCA`s trade-related provisions. Imports The Department of Trade, Industry and Competition (the DTIC) has the power to regulate, prohibit or ration imports into South Africa in the national interest, but most goods can be imported into South Africa without restrictions. Cultural relations between Germany and South Africa are based on the 1998 Agreement, which entered into force on 10 January 2000. It was supplemented in 2004 by an agreement on joint audiovisual productions, which entered into force on 7 January 2005. At €15 billion, bilateral trade between South Africa and Germany recorded a good volume of trade in 2016. Compared to 2015, exports to Germany increased by 5% to €6.2 billion and imports from Germany by 8% to €8.8 billion. Under the so-called “SADC EPAs”, the EU has totally or partially eliminated tariffs on 98.7% of imports from South Africa, while guaranteeing full free access to other signatory countries. Today, the EU remains South Africa`s largest trade and investment partner. The strategic approach to German development cooperation with South Africa is, on the one hand, to strengthen South Africa`s contribution to the protection of global public goods and, on the other hand, to strengthen South Africa`s efforts to address the major development challenges of a society characterised by high inequalities. The cooperation framework is the jointly agreed bilateral strategy (2015-2020), which has four priorities: green economy (energy and climate), vocational training, good governance and HIV prevention.
To check the dynamics of trade in South Africa and Germany, visit the bilateral page. The EPO contributes to improving the business climate between partners by providing a stable and forward-looking framework for businesses in South Africa and across Southern Africa. It helps boost bilateral and regional trade, creating new opportunities to achieve the objectives of the strategic partnership between South Africa and the EU. German companies, which without exception enjoy a great reputation in South Africa, focus on the automotive and chemical industries as well as mechanical and electrical engineering. This makes Germany the largest investor in the country`s manufacturing sector. The German-South African Chamber of Commerce and Industry in Johannesburg and the German Trade and Invest Office (GTAI) support German companies with branches in South Africa. An Economic Partnership Agreement (EPA) between the EU and six Southern African countries (including South Africa) has been in force since October 2016. It offers the countries concerned wider and duty-free access to European markets. This could further develop trade.
About 74% of foreign direct investment in South Africa comes from the EU (UK: 38.2%, Netherlands: 21.4%, Germany: 4.9%, compared to 4.2% in China). And the trend is upward. The South African market continues to offer significant opportunities for German companies, particularly in the areas of renewable energy, water and infrastructure. Many German companies see South Africa as a gateway to other African markets in the region. South Africa is the only African member of the G20 and, together with Germany, Chair of the G20 African Consultative Group. .