Does your business depend on importing goods from somewhere in the world? Our businesses do, so we understand how the exchange rate, cargo delays and new regulations can affect the daily running of your business.
We build on knowledge and we are here to share what we know with you. The imports business is such an interesting business field to be involved in and it’s truly amazing how the economy and world events affect this business category.
Here are some interesting facts about South Africa’s imports:
The Republic of South Africa imported US$88.1 billion worth of goods from around the globe in 2019. That dollar value reflects a 3.1% increase over 5 years starting in 2015 but a -5.7% decline from 2018 to 2019.
With the recent health issues that China is experiencing, it has affected the world economy and have you thought about how this will affect your business in any way?
Based on the average exchange rate for 2019, the South African rand depreciated by -13.2% against the US dollar since 2015 and dropped by -9.2% from 2018 to 2019. South Africa’s weaker local currency makes its imports paid for in stronger US dollars relatively more expensive when converted starting from the South African rand.
From a continental perspective, 45% of South Africa’s total imports by value in 2019 were purchased from Asian countries. European trade partners supplied 31.5% of imported bought by South Africa while about 12% worth originated from fellow African nations. North American exporters accounted for 7.6% of South Africa’s imports, with 2.3% coming from Latin America (excluding Mexico) plus the Caribbean and 1.3% shipped from Oceania led by Australia.
Given South Africa’s population of 58.8 million people, the total of $88.1 billion in 2019 imports translates to roughly $1,500 in yearly product demand from every person in the resources-rich South African country.
The following product groups represent the highest dollar value in South Africa’s import purchases during 2019. Also shown is the percentage share each product category represents in terms of overall imports into South Africa.
- Mineral fuels including oil: US$14.8 billion (16.8% of total imports)
- Machinery including computers: $11.2 billion (12.7%)
- Electrical machinery, equipment: $8.6 billion (9.7%)
- Vehicles: $7 billion (8%)
- Plastics, plastic articles: $2.5 billion (2.8%)
- Pharmaceuticals: $2.4 billion (2.7%)
- Optical, technical, medical apparatus: $2.2 billion (2.5%)
- Other chemical goods: $1.6 billion (1.8%)
- Organic chemicals: $1.4 billion (1.6%)
- Books, newspapers, pictures: $1.3 billion (1.5%)
South Africa’s top 10 imports accounted for three-fifths (60.7%) of the overall value of its product purchases from other countries.
What does your business import? Have you sourced other options when it comes to suppliers for this specific product? Or have you looked at replacement options?
In business, we believe to always prepare for the unexpected and to structure your business in some way, so you have an income source that is not solely depended on your imported items. The current situation in China could affect your business in more ways than you think. Even if you don’t import from China directly. We suggest you always look for more creative ways to save extra money in your business and personal finances and if you need some professional advice, head on over to our sister company Hitek Accounting at www.hitekaccounting.co.za and let Mark, our CA assist you with the best advice.
In next week’s article, we will be discussing the most exported items from South Africa, make sure not to miss it.
Wishing you a productive day tomorrow.
The Hitek Clearing Team