I am pleased to present this Africa edition of Business Envoy, which highlights Australia’s growing engagement with the continent, and the trade and investment opportunities for Australian business there.
The countries of Africa are important trading partners for Australia, with two-way trade worth $11.4 billion in 2018. Trade with South Africa was a strong contributor to that figure, at $3.8 billion. South Africa is also a strong investment partner, with an inward investment flow of nearly $8 billion in 2018. Prominent South African companies are expanding their investment holdings in Australia, for example Woolworths Holdings purchased David Jones and Country Road in 2014.
Australian businesses are partnering with African counterparts, creating jobs and empowering communities. They are actively embracing good corporate citizenship and bedding down their investments with strong community engagement programs.
This edition showcases a selection of Australian businesses at the forefront of our growing trade and investment relationship. Companies like Rheem/ Solahart, Windlab and Orion Minerals, which are active in producing or sourcing renewable energy in South Africa. Costa Group, which is taking advantage of Morocco’s place as a stepping-stone into the European Union’s agricultural market, and NOJA Power, which is helping bring stable electricity to Nigeria.
Africa’s economic future is centred on minerals and commodity-based industrialisation and regional and global value chains. They are areas where Australian companies have expertise and are very active—over 170 Australian Stock Exchange-listed companies are invested in more than 400 projects in 35 countries across the continent.
At the same time, significant economic, technological and demographic changes are taking place across the continent, creating new opportunities for Australian businesses. A shift is underway towards high value-added and more complex goods and services, and e-commerce is providing new access to African markets.
With further economic development occurring across Africa, interest is likely to grow in fields where Australia has world-class expertise, such as renewable energy, and services, particularly in education. Africa will also seek more growth-fuelling foreign investment.
A major recent development is the African Continental Free Trade Area (AfCFTA), which aims to create a single continental market for goods and services. With free movement of business people and investment. AfCFTA will create a market of more than 1.2 billion people with a combined GDP of more than US$3.4 trillion.
AfCFTA’s entry into force on 30 May 2019, for the 24 African countries that had ratified, brought Africa closer to becoming one of the largest free trade zones in the world.
The Australian Government is making sure Australian business is well-placed to take advantage of these developments, by building strong relationships with countries of Africa, noting the geographic, cultural, linguistic and economic diversity of the continent.
The Advisory Group on Australia Africa Relations (AGAAR), launched in 2015, and tasked with advising the Foreign Minister on ways to advance and diversify Australia’s relationships with the countries of Africa, will play an important role.
Australian businesses that can navigate diverse and challenging environments with differing cultural, security and regulatory landscapes will have the chance to thrive in Africa. These businesses also understand that due diligence, effective risk management and a social license to operate are essential.
I encourage Australian businesses with these credentials, and an interest in Africa, to attend Australia Africa Week (AWW) in Perth from 1-7 September. AAW provides a platform to strengthen relationships between our two continents. Built around the longstanding Africa Down Under Mining Conference, AAW offers a diverse program linking Australian companies, universities, African ministers, senior officials and diaspora communities.
This edition also highlights further opportunities for Australian business with the signing of the Hong Kong Free Trade and Investment Agreement on 26 March 2019 in Sydney.
I commend this edition of business envoy to you.