Indian investment in South Africa amounts to over R50 billion, says PwC
Dating back to civil liberty movements in the colonial era, India and South Africa have had a lot in common across the economic, social, and political domains. A new report from global professional services firm PwC reveals that bilateral trade between the two countries grew by as much as 400% in the decade between 2004 and 2014.
In many ways, the economies of India and South Africa appear to be on similar growth trajectories. Both countries are positioned as major regional economic powers on the one hand, but are internally battling inefficiencies and corruption on the other.
One trend that is highly visible across the two countries is the appeal that both economies hold for members of the international consulting industry. As the business environment in the two countries thrive, international consulting firms are rushing to support new firms with expansion, and multinational businesses with entry into the respective markets.
Disruption from AI and automation is another common threat to both countries, where unemployment is high and skill-levels lack the maturity to work with the latest in machine learning technology. Both countries are also actively battling socio-economic inequality in the business environment.
Not surprisingly, according to a new report from Big Four accounting and advisory firm PwC, the two countries have significantly close trade relations with each other, spanning a range of sectors, including pharmaceuticals, automotive, financial services, information technology, mining, and environmental sustainability.
As per the report, the total investment from Indian companies in South Africa currently exceeds R50 billion, creating a total of 18,000 jobs in the South African community. Overall, the total value of bilateral trade between the countries stood at nearly $12 billion in 2014, which represents a 400% increase from its 2004 level of $2.5 billion.
India represents South Africa’s fourth largest market for imports, with a total import value of over R45 billion. Between 2006 and 2016, imports grew at a strong compound annual growth rate (CAGR) of 15%. In terms of exports, India is South Africa’s fourth largest trade partner, with a total export value of just under R48 billion, having grown at a staggering CAGR of 25% between 2006 and 2016.
Aside from the large volume, trade between the two countries has also been qualitatively significant. For instance, Indian multinational pharmaceutical company Cipla has played a critical role in reducing the price of anti-retroviral drugs, which are used in the treatment of HIV – a disease that affects more than 7 million people in South Africa.
