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Johannesburg – German businesses are keen on investment opportunities in South Africa, according to Dr Andreas Dombret, a member of the executive board of the Deutsche Bundesbank.
Dombret was speaking at a media briefing in Pretoria on Monday, following the appointment of a Bundesbank representative in South Africa, a first on the African continent. The representative, Jenny Kilp, will be based in Pretoria.
He highlighted the economic importance and potential of trade between Germany and South Africa. South Africa is Germany’s most important trading partner in sub-Saharan Africa, while Germany is South Africa's second-largest trading partner, he stated in his address.
“Your country has vast economic potential and with your developed financial, communications and transport infrastructures, German investors also see South Africa as a bridge to other African markets,” he said.
Bilateral trade volume grew to more than R241.5bn in 2015. South Africa’s exports to Germany rose by close to 20%, or R80bn. Vehicles topped the list of exported goods, followed by parts, accessories, gems, precious metals and machinery, he said.
Imports from Germany grew by about 16% to R144.9bn. Vehicles again topped the list of imports, followed by parts, accessories, machinery and electronic equipment.
Currently there are over 600 German companies operating in South Africa. These include BMW, DHL, Mercedes Benz, Volkswagen and Siemens. “Together, these companies are estimated to provide around 90 000 jobs and contribute significantly to vocational training and technological development,” he said.
“Your country is fertile ground for the private sector. It has a diversified industry and a well-regulated financial sector with a recognised and independent central bank,” he added. Germany regards South Africa - the only African member country of the G20 - as the most developed economy in Africa.
Collaboration to achieve global and financial stability
The appointment of a Bundesbank representative is part of a cooperation agreement signed by the two central banks in February, at the G20 meetings in Shanghai.
The central banks will jointly undertake two research projects. One will look at exchanging best practices in bank stress testing, which looks at whether a bank has enough capital to withstand the impact of adverse economic developments. The other will focus on exploring how to cooperate more closely with G20 issues.
South African Reserve Bank (Sarb) deputy governor Daniel Mminele said that the representative would facilitate collaborative research projects between the two central banks to achieve monetary policy and financial stability.
“The posting of a Bundesbank representative to South Africa also underpins the ongoing cooperation between the Sarb and the Bundesbank which has developed over many years,” he said.
“It will also strengthen our capacity individually and jointly to participate in international organisations and forums with the intention of securing outcomes beneficial to our countries and contribute to global economic and financial stability.”
Audio: Dr Andreas Dombret on the role of Bundesbank representatives in South Africa
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