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TRADE: Italian Delegation Finds More Than Big Five in S. Africa

Moyiga Nduru

JOHANNESBURG, Jul 27 2007 (IPS) - ‘‘Italians used to think of Africa in terms of safari and animals, especially the Big Five. Now they are realising that there’s business potential in South Africa,’’ says Giovanna Roma, secretary general of the Italian South African Chamber of Commerce and Industry of Northern, Eastern and Western Cape.

That South Africa is about more than elephant, lion, leopard, rhino and buffalo (the Big Five) was clear during the visit of a trade delegation from Italy to South Africa earlier this month (July 9-12).

Headed by Massimo D’Alema, both Italian deputy prime minister and foreign minister, the 150-strong delegation included one of Italy’s largest tour operators, trading under the acronym ASTOI, a few infrastructure firms and eight banks, including UniCredit Bank, Italy’s largest.

‘‘Italian companies have realised that it’s not only in Brazil, China or Argentina that they can do business,’’ Roma told IPS in an interview. ‘‘They see good infrastructure in South Africa.’’

Italy ranks amongst South Africa’s top ten trading partners. Total trade between South Africa and Italy, which picked up after the demise of apartheid in 1994, now amounts to about 5.2 billion dollars, according to figures supplied by the Italian Central Institute of Statistics.

D’Alema believes there’s still room for improvement. ‘‘South Africa represents an emerging power in economic terms. Italian entrepreneurs are convinced that the business partnership with South Africa is a real and attractive opportunity.

‘‘I think that the presence of so many Italian entrepreneurs in our delegation is an important signal that they are confident about the future of South Africa,’’ he said during the visit.

According to Ronnie Mamoepa, spokesperson for the South African department of foreign affairs, South Africa has a negative trade balance with Italy when gold and certain other minerals are excluded.

South Africa’s exports to Italy include iron, steel, alloys, coal, granite, fish, beef and leather as well as chemicals. The exports amounted to 1,108,114 dollars in 2005 and rose to 1,385,178 dollars in 2006, according to South Africa’s department of trade and industry.

In 2005 South Africa imported goods from Italy worth 1,527,520 dollars and the following year 1,395,977 dollars. They include machine tools, vehicles and components, industrial machinery, jewellery and telecommunications equipment.

Issues of concern from the Italian point of view, said Roma, are ‘‘problems with customs duties for products such as wine and spirits. There is too much bureaucracy. They also find certain duties too high. It is also hard to export cold meat to South Africa.’’

Asked whether Italian companies signed any new deals in South Africa during the visit, Roma laughed. ‘‘From my experience, Italian people are not quick to sign a deal. July and August are holidays in Italy. Business will pick up from September after the holidays,’’ she said.

‘‘The companies which came to South Africa will hold meetings, workshops and seminars with their associates in Italy to ‘sell’ South Africa. We’ll find out in a few months whether they are going to do follow-ups,’’ she said. ‘‘The companies were mostly using the visit to network in South Africa.’’

At a one-day (July 9) conference organised by South Africa-Italy Business Forum in the commercial hub of Johannesburg, South African deputy president Phumzile Mlambo-Ngcuka, echoed Mamoepa’s statement.

‘‘The challenge is, of course, to narrow the balance of trade which is currently in favour of Italy so as to ensure that our countries benefit mutually from our trade relations. However, this should be done without holding back the current levels of investment from both our countries,’’ she said.

South Africa hopes to benefit from Italy’s experience in the small, medium and micro enterprises (SMMEs) sector.

‘‘I’m told that companies such as Fiat and Parmalat are household names in the Italian business world. These are among the many Italian companies that have also become household names in our country, serving as living examples of the success stories that South Africa can and must tell.

‘‘The number of joint ventures between companies from both our two countries, particularly in our mining sector is, encouragingly, rising,’’ Mlambo-Ngcuka said.

Mamoepa said Italian investments in South Africa amounted to 53.2 million dollars in 2005.

Local companies such as South African Breweries (SAB) Miller, Sasol and Dimension Data have also made inroads in Italy. ‘‘We are beginning to observe encouraging signs that more and more South African companies are following the path charted by companies such as Sasol,’’ Mlambo-Ngcuka said.

South African authorities have been working hard to project their country as a safe destination for foreign investment. ‘‘Ours provides one of the friendliest business environments in the world. South Africa is ranked 28 in the World Bank Investment Climate Survey,’’ she pointed out.

South Africa’s economy is also doing well. ‘‘For the past three years we have been registering an annual growth rate of five percent and creating 500,000 jobs per annum. Government is confident that we will be able to achieve our targeted annual growth rate of at least six percent as of 2008,’’ Mlambo-Ngcuka said.

But challenges remain. One of them is Zimbabwe which D’Alema and his South African counterpart, Nkosazana Dlamini-Zuma, discussed during the visit. Zimbabwe, whose inflation rate has hit 10,000 percent, the highest in the world, used to be the second strongest economy in the 14-member Southern African Development Community (SADC), after South Africa.

‘‘Clearly a problematic economy in Zimbabwe means that SADC as a region, including South Africa, will feel the consequences. But we have to do all our best to revitalise or restart in a way, regenerate the economy there for the benefit of the Zimbabwean people and the region,’’ Dlamini-Zuma told journalists.

‘‘Of course, Zimbabwe has been one of our biggest trading partners so it’s very important on all fronts that their economy is regenerated.’’

Speaking in Cape Town on July 11, Giuseppe Boscoscure, president of ASTOI, regretted that only 50,000 South Africans, half of them on business, visited Italy last year.

‘‘To sort out the problem, I think Italy should introduce a direct flight to South Africa to boost trade and tourism,’’ Ben Broun, who is researching international trade at the University of South Africa (UNISA), told IPS by phone.

Italian tourists have to take connecting flights from other European countries to travel to South Africa, and South African tourists have to take connecting flights to get to Italy.

The other challenge which worries the business community, including foreign investors, is South Africa’s growing crime rate. The 2006/2007 report by the South Africa Police Service (SAPS) shows a 3.5 percent rise in murders, a 118 percent increase in violent bank robberies, a 25.4 percent escalation in house break-ins and a six percent rise in car hijackings.

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