Peter van Binsbergen, President of the Southern African-German Chamber of Commerce and Industry (AHK Southern Africa), on Tuesday addressed concerns regarding potential changes to the African Growth and Opportunity Act (AGOA) and their impact on German companies operating in South Africa.
The AHK Southern Africa is an organisation that fosters bilateral trade and investment between Germany and Southern African countries.
AGOA is a U.S. trade agreement that allows duty-free access to American markets for certain African countries, including South Africa. It is under threat after Donald Trump criticized South Africa’s land expropriation policy, raising fears that he might revoke the country’s AGOA benefits.
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According to van Binsbergen, 28% of German companies in South Africa that engage in trade with the United States could be affected by changes to AGOA.
No bad anticipations, AGOA is mutually beneficial
However, these companies do not anticipate that such changes will severely disrupt their operations. Van Binsbergen stressed that AGOA is mutually beneficial, helping with trade between South Africa and the U.S.
South African businesses export goods to America and import U.S. products, thereby supporting jobs in both countries.
Looking at BMW as an example
Illustrating this point, van Binsbergen cited the example of BMW’s manufacturing operations in South Africa.
The Rosslyn plant in Pretoria produces vehicles for export, including to the U.S. Under AGOA, these exports are duty-free, making them more competitive in the American market. Important to note is that many components used in these vehicles—such as engines and electronics—are sourced from U.S. suppliers. This arrangement, he said, supports American manufacturing jobs and demonstrates the mutually beneficial nature of AGOA.
Van Binsbergen shared these insights during a media briefing on the German-Southern African Business Outlook 2025, a survey conducted by KPMG Germany and AHK Southern Africa.
KPMG AG Wirtschaftsprüfungsgesellschaft and AHK Southern Africa surveyed member companies with business activities in South Africa and the Southern African region.
A total of 98 companies participated in the survey, which was conducted between November 11 and December 31, 2024. The questions focused on the economic outlook of members’ companies in the region, as well as the challenges and business opportunities they face.
German company cautiously optimistic
The study showed a cautiously optimistic outlook among German companies regarding South Africa’s economic prospects.
Factors contributing to this optimism include the formation of a Government of National Unity (GNU), which has introduced reforms aimed at stabilizing the economy.
The study also cited improvements in energy supply reducing load-shedding incidents, and a decrease in the repo rate, making borrowing more affordable for businesses.
Key findings from the survey include:
Economic Environment: 77% of respondents expect the economic climate in South Africa to improve, though only 12% anticipate significant enhancements.
Profit Expectations: 48% of companies in South Africa and 35% in the broader Southern Africa region expect increased profits.
Growth Factors: The top three factors identified for growth are improved political stability (50%), reduced bureaucratic hurdles (44%), and stricter anti-corruption measures (35%).
Government Priorities: Respondents believe the new South African government should focus on combating corruption and crime (46% each) and modernizing infrastructure (39%).
Despite global economic challenges, German companies view South Africa as a strategic gateway to sub-Saharan African markets. The country’s established infrastructure, access to regional markets, and ongoing reforms present substantial opportunities for growth and investment.
