South Africa should be encouraging development and trade with favourable countries

In a recent interview, Hüttenes-Albertus’ CEO Christoph Koch gives his views on the many current challenges such as high energy costs, overwhelming bureaucracy and production migration in Germany. Despite one in four medium-sized companies in Germany currently thinking about relocating production abroad, Hüttenes-Albertus is not planning to do so. However, Koch was also keen to point out that the current German government is not making it easy for industry and others.

“We have far too many regulations. Germany will only remain viable for the future if the government finally stops this bureaucratic madness.”

His statement is backed up by a recent study conducted by the Institut für Mittelstandsforschung (IfM) in Bonn on behalf of the New Social Market Economy Initiative (INSM) which shows that the burden of bureaucracy has now become a key obstacle to investment. Most companies are investing less in Germany because of bureaucracy two-thirds of companies in Germany feel disproportionately burdened by government bureaucracy. The study says the overwhelming majority of companies (80%) feel controlled by the state, with only 9% having the impression that the state trusts them. As a result, 58% of all companies surveyed plan to avoid investing in Germany in the future. 18% are considering investing more abroad due to the bureaucracy.

Germany has always been a great friend of South Africa, trying to advance all aspects of life, for many years now. We only have to look at the foundry industry and see how they have funded many different initiatives in South Africa as well as addressing human capital and skills development by training students at universities in Germany through bursaries. Technology and innovation transfer from Germany is vindicated by the number of German businesses (major international companies) with established offices and manufacturing facilities operating in South Africa, none more so than the automotive OEMs BMW and Mercedes-Benz South Africa.

In short Germany has fostered a development partnership between itself and South Africa – even more so now – aimed at helping the country overcome the development challenges that persist, especially in the areas of good governance, energy, health, vocational education, and prevention of violence.

Many millions of euros have poured into South Africa for the various projects that Germany has initiated. This trade between the two countries has been South Africa’s second largest trading partner and also a major investor. In 2021, South Africa exported $10.4 billion worth of goods to Germany. The main products exported from South Africa to Germany were cars ($2.86 billion), platinum ($1.9 billion), and precious metal ore ($1.5 billion). In the same period Germany exported $8.89 billion worth of product to South Africa, which gives South Africa a trade surplus of $1.5 billion.

This is a healthy number in South African terms but is quickly put into perspective when comparing Germany’s trade with other countries. Nevertheless, the trade between the two countries should be encouraged and increased. If you compare, for example, South Africa’s exports to Russia of $282.85 billion during 2022, according to the United Nations COMTRADE database. Russia’s exports to South Africa were $342.22 million during 2021. This is a $60 million deficit. And yes, we are talking millions – not billions – as is the case with Germany – but to our advantage.

South Africa should be encouraging development and trade with favourable countries like Germany. There are many more morally correct countries that want to be involved with South Africa but currently there is no objective to do so. I don’t think I am wrong in saying self-indulgence is high on the agenda rather than having a happy population.