Africa-Asia trade corridor at the forefront
Jessica Gadimang, Head of Bank, Developed Markets, Middle East & Africa and Carl Henriksen Executive Vice President and Head of Japanese Corporates at Standard Bank
Across the world, we have recently seen increasing challenges to globalisation and integration as a wave of nationalism, protectionism and increased talk of punitive tariffs sweep across international regions.
Of course, the recent developments have largely been precipitated by the natural reaction to a perceived or real threat to traditional industries as technological and other advances create newer industries. The human reaction is to close ranks under such threat, to close shop and turn inward to protect what we deem sacrosanct to our national identities and economies.
South Africa, for its part, has managed to create a fine balance between protecting domestic labour while maintaining an international interface. South Africa is ranked 36 out of 138 countries that export goods, 40 of 138 countries that import goods and 19 of 138 countries trade balance. We remain a member in good standing at the International Labour Organisation (ILO) and have some of the most internationally progressive labour laws.
This balance between national imperatives and a global outlook has allowed for the growth and expansion of various bilateral and multilateral relationships. Among these is the vitally important relationship with powerful Asian allies such as Japan.
Having originally established formal diplomatic ties with Japan in 1910, the ties were re-established in January 1992. Japan is South Africa’s fourth biggest export market with exports of over USD 8 billion. We also import goods from the Asian juggernaut that are valued at over USD 2.6 billion. Bilaterally we have strong and deep diplomatic relations, particularly in the fields of trade and investment, science and technology, education, and skills development.
Relations between the two countries were upgraded in 2010 to a Strategic Cooperation Partnership and 2025 will mark 115 years of relations between South Africa and Japan.
Standard Bank, in its commitment to supporting Japanese business on the continent, has built a formidable partnership with Japan’s third largest banking group, Mizuho Bank Ltd (MHBK). This relationship with MHBK has enjoyed remarkable momentum since our initial cooperation memorandum of understanding (MOU) signed in Kenya in 2012 followed by additional MOU addendums in 2016, 2019 and 2022.
As the biggest bank in Africa, we have long held a global outlook and through our partnership with MHBK we have been fortunate to partner with a broad base of Japanese corporates, financial and non-bank financial institutions and a myriad of trade and development finance institutions. This collaboration also allowed us to jointly execute significant funding transactions, whether through bilateral agreements and/or loan syndications.
The relationship spans over 25 years, predating the signing of our formal MOU. MHBK also celebrated the 10-year anniversary of its representative office’s presence in Johannesburg last year, highlighting the importance that South Africa holds for the group.
According to the Department of International Relations and Cooperation, Japan is the fourth largest economy in the world, when measured in nominal gross domestic product. Total bilateral trade in 2023 was R155.7 billion (with South Africa recording a trade balance of R55.8 billion) and over 13,000 Japanese tourists visited South Africa in 2023, according to Stats SA.
The Asian giant also has 278 companies that operate in South Africa, adding to the economy and job creation here. The extent and depth of the relationship is therefore redoubtable and steeped in deep-seated respect.
2024 marks 31 years since the inception of the Tokyo International Conference on African Development (TICAD) in 1993 and eleven years since the African Union adopted its flagship Agenda 2063, on which the Tunis Declaration placed distinct emphasis. Next August, Japan will play host to the ninth TICAD, which will be held in Yokohama. Further deepening ties that have been built over time with patience and intentionality.
These ties demonstrate why we are passionate advocates for global trade, integration and strategic trade corridors.
As we look to the future, let us celebrate what we have accomplished in partnership with Japan and look forward to a bright future as we continue to build and strengthen our ties in South Africa and more broadly in the beautiful continent, we are proud to call home.