Trade Relations between Bangladesh and South Africa
Trade relations between Bangladesh and the Republic of South Africa have been on the rise over the past few years, though far from realizing the potential. The Government of Bangladesh is working along with trade agencies in South Africa to promote trade between the two countries. Bangladesh has been participating in the biggest annual trade exhibition in South Africa for the last few years through the Export Promotion Bureau and also at private levels by various enterprises. Bangladesh's participation in the exhibition has helped a lot to expose her products to the South African importers, buyers and also to the participating enterprises of various African countries. During the exhibition, Bangladeshi companies had the opportunity to contact with potential importers of South Africa and at the same time got a number of spot orders. South African traders are importing Readymade Garments from Bangladesh at private levels. Bangladesh Mission in South Africa participated in the Asia+ Expo 2007 to exhibit Bangladeshi products, where more than 20 countries participated. The trade fair was held in Kimberley (Northern Cape Province) from 23-25 August 2007.
Volume of trade is on the upward trend and Bangladesh Mission in South Africa, for the last few years has been able to exceed the export target fixed by the Government for last five years. From 20 May-02 June 2013 a trade delegation lead by Hon’ble Minister for Commerce visited Zambia, South Africa and Mozambique in order to enhance the export of Bangladeshi products to Africa. DG (Africa) was a part of the 15 member delegation. During the visit there was a trade seminar regarding trade potentiality in Africa and a meeting was arranged with the concern officers of the Ministry of Foreign Affairs of those countries.
A draft Trade Agreement between the two countries has been finalized, which is yet to be signed by the two countries. [The final draft of the agreement was sent to South Africa on 26-5-09 for their views/comments. Since then no further communication was received from South African side.] It is hoped that the said agreement would strengthen institutional framework to strengthen bilateral trade between the two countries in future.
The High Commission in Pretoria has been making persistent efforts to encourage the potential South African business communities to import /buy Bangladeshi products, especially, jute, jute-goods, ready-made garments, handicrafts, leather, leather-goods, chemical fertilizer, stuffed toys, women's apparels, caps, hats, plastic wares, melamine products, ceramic products, toiletries, sea-food, cosmetics, pharmaceutical products etc. In this regard the Mission continues to provide the South African business entrepreneurs with necessary contact details and information of the Bangladeshi exporters/manufacturers.
A Memorandum of Understanding (MOU) was signed between the Federation of Chamber of Commerce and Industry of Bangladesh (FBCCI) and Durban Chamber of Commerce in 1999 in order to make closer commercial, economic and investment relations between the two countries.
South Africa, being a flourishing democracy, has opened up its economy to the rest of the world with the aim of strengthening economic relations with African and Asian countries and specially, with the LDCs. South Africa is gradually scaling down its tariff rates and is easing non-tariff barriers on many importable items which would facilitate ways for expanded trade between Bangladesh and South Africa. South Africa's investment in the field of gas, oil, coal, and mineral exploration in Bangladesh could be considered as prospective because of its technology and expertise. Besides, setting up of production ventures in few selected fields with buy back arrangements and with the provisions to re export to third countries may also be considered prospective. Since the South African companies are now shifting their business in the developing economies by relocating their production units, Bangladesh could well be regarded as a prospective area of relocation. On the other hand South Africa could be used as a launching pad for the Bangladeshi commodities to enter into the markets of other African countries, because of its geographic location and influence on the economies of other African countries.
It may also be mentioned that South Africa enjoys the advantages derived from the African Growth and Opportunity Act (AGOA) which was promulgated by the United States and provided opportunities of duty and quota free access of goods from 35 Sub-Saharan countries to the US market. AGOA also provided scope for relocation of industries/factories from other countries to South Africa and other Sub-Saharan countries and export their products to the U.S. There exists vast opportunities for the Bangladesh RMG manufacturers to avail of the advantages of the AGOA by relocating their manufacturing units in South Africa.
Recently South Africa has imposed restrictions on importing garments from China, one of the major trading partners of the country. Instead, they are looking at sources like Vietnam, Bangladesh, Pakistan, and Indonesia etc. Thus it would be an opportunity for Bangladesh to penetrate into the South African market more vigorously.
Bangladesh has been successful in achieving its export target to South Africa for the last few years. During FY 2010-2011 Bangladesh exported USD 56.20 million worth of goods to South Africa against its import of USD 38 million. Import from South Africa is also increasing day by day. Unlike the previous years, balance of payment is now in favor of South Africa.
Figures in Million US$
Source: Exports and Imports Controller’s Office
Our High Commission in South Africa is constantly pursuing to enhance exports from Bangladesh. We believe that the volume of export will increase in the coming days.