Merchandise imports and exports dropped sharply at end of 2023

Merchandise imports and exports dropped sharply at the end of 2023 thanks to high oil prices, diminished commodity export receipts and increased congestion at South Africa’s ports. The country’s cumulative merchandise trade surplus for 2023 decreased to R61.0 billion from R192.0 billion in 2022.

According to Sars, the value of merchandise imports as well as exports fell sharply at the end of 2023. The latest trade statistics show that goods imports dropped by 9.0% in December compared to November to reach R149.9 billion, while exports slumped 11.5%.

In the end, South Africa had a preliminary trade surplus of R14.1 billion at the end of 2023, compared to a downwardly revised merchandise trade surplus of R20.6 billion in November.

The biggest decreases in Rand terms during December were recorded for vehicles and transport equipment that declined by 18% compared to November, precious metals and stones that declined by 16% and mineral products that decreased by 8%. These decreases coincided with the intense logistics backlogs at South Africa’s.

At the opposite end of the trade ledger, sizeable declines were recorded in December compared to November for vegetable products (-37%), original equipment components (-34%) and mineral imports (-6%), reflecting the impact of lower oil prices at the time.

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South Africa’s trade partners in Africa and Europe

In terms of trade partners, South Africa logged a R28.7 billion merchandise trade surplus in relation to the African continent during December, while recording a R1.2 billion trade deficit with Europe. At the same time, South Africa registered a trade shortfall of R18.5 billion with Asia.

Jee-A van der Linde, senior economist at Oxford Economics Africa, says export flows for December 2023 were 0.9% higher compared to the R162.4 billion recorded in December 2022 on an annual basis, while imports were 5.0% lower than the R157.8 billion recorded in December 2022.

“In addition, South Africa’s cumulative merchandise trade balance came in at R61.0 billion for 2023, which is markedly weaker than the R192.0 billion trade surplus recorded in 2022. Logistics challenges at South Africa’s congested ports have become a major headache for businesses and present a significant risk to the domestic economy this year.”

Van der Linde points out that the International Monetary Fund (IMF) has warned that South Africa’s logistics challenges constrain economic activity and act as a drag on the entire region, with the fund reducing South Africa’s 2024 real gross domestic (GDP) growth forecast to 1.0% from 1.8% previously.

“We forecast the economy will grow by 0.7% this year, after having likely increased by 0.5% in 2023,” he says.