South Africa’s trade balance is thinning and in need of urgent resolve

A review of South Africa’s trade data for the period 2018 to 2022 revealed that South Africa remained a net exporter in value terms, peaking the positive balance during this period to ZAR444.53 billion in 2021 from lows of ZAR15.21 billion in 2018 and ZAR31.80 billion in 2019. In 2022, the positive balance dropped by just over 60% to ZAR192.21 billion. Although the country remained a net exporter, the rate of import growth in value terms (2022 versus 2021) increased at a rate (32.6%) close to three times the export rate (10.9%). This wouldn’t warrant the raising of alarm bells because the country stayed a net exporter. What does raise alarm bells is that it would have been expected that value exported in Rand terms should have increased based on the local currency’s depreciation when compared to the US$ or the Euro. Even if the country exported the same volumes, it would have earned more in Rand terms and thus the rate of export value growth, in theory, should be much higher if more volumes were exported.