ECIC AR 2024 9TH

E

D

H

S

I

L I

N

B

2

0

A

0

T

S

1

E

Integrated Report 2024

E X P O R T C R E

L T D

O C

A S

C

R I

D I

F

T

A

I

N

H

S

T

U

U

R

O

A

S

N

F

C

O

E

N

C

O

O

I

R

T

P

A

O

R

Fiscal consolidation in most parts of the region is improving, while debt restructuring negotiations encourage more prudent fiscal management. Noteworthy, investment appetite in Africa is likely to be subdued by interest rates, which will also limit government consumption capacity. Resolution of debt issues enables governments to focus on developmental projects and unlock funding from various financiers, thus improving future business prospects for ECIC. The ECIC has acknowledged key lessons from past projects and is reviewing its strategic approach for sovereign risk management based on foreign public debt levels and proposed commensurate project structures to ensure that it complies with responsible lending practices. Globally, over 40 countries will hold elections in 2024, with South Africa, Madagascar, Rwanda, Mozambique, Botswana, Ghana, Tunisia, Namibia, South Sudan, Guinea Bissau and Algeria, amongst those on the continent. Surveys and polls show that some incumbents are likely to face challenges in securing a landslide in their respective 2024 elections. Legacy liberation parties are expected to have lower parliamentary representation in some countries, signalling probable changes in the political landscape and the policy environment. Meanwhile, violence risks, particularly military coups and elevated security risks, remain an

international investor concern for the entire region. Of importance to the ECIC is policy continuity and an enabling environment for trade and investment opportunities. On the other hand, political and security instability are major risks, as the Corporation cannot underwrite risks in jurisdictions where conflict exists or where a non-civilian government presides. According to the National Treasury, South Africa’s gross debt stock is projected to reach R5.21 trillion (73.9% of GDP) in 2023/2024 and increase to R6.29 trillion in 2026/27 (74.7% of GDP). This is partly due to increased public sector salaries and the continuation of the unemployment welfare grant. GDP growth for 2023 was 0.6%, down from 1.9% the previous year, with projections of 1% for 2024. While the electricity issues have been partially addressed, manufacturing continues to decline with infrastructural challenges, posing a risk to the outlook. The manufacturing sector is pivotal to the achievement of South African content, which is a requirement for ECIC. Thus, South African exports must be competitive, especially with the African Continental Free Trade Area Agreement, offering access to non-traditional markets and creating opportunities for other suppliers and producers on the continent.

YOUR EXPORT RISK PARTNER

48