Trade in goods between Singapore and South Africa soared to US$1.4 billion in 2024, nearly doubling 2020 levels. This significant increase highlights a broader shift as companies re-evaluate supply chains, production bases, and logistics hubs in response to global economic instability. Singaporean firms, facing a limited domestic market and rising costs, are expanding internationally. Africa is increasingly seen as both a destination market and a key location for production, processing, and distribution.

South Africa’s manufacturing sector is poised for a timely boost, attracting interest from established global players seeking alternative production locations. This comes as the sector has long grappled with challenges such as energy constraints, export competitiveness, and domestic uncertainty. A Singaporean delegation, comprising firms like steel-infrastructure specialist Mlion Corporation, car-leasing company Lumens, snack-maker Cocoba, refurbished-device trader Mercantile Pacific, and industrial-equipment supplier Chee Fatt, is bringing a combination of capital, technical expertise, and global networks to the country.

What manufacturing means in this context

In this context, manufacturing transcends simple production; it’s integral to a broader strategy of value-chain reorganisation. Singaporean companies aim to utilize South Africa for the following:

Access to regional markets: South Africa is a gateway into the Southern African Development Community (SADC) region and beyond.

Cost arbitrage and operational diversification: Moving elements of manufacturing or assembly out of Singapore and into a lower-cost base complements resilience.

Agri-processing and industrial supply: In terms of food-processing, consumer goods and industrial equipment flagged as priority sectors, the potential is for South Africa to become a hub for value-added production rather than mere raw-export.

Logistics and supply-chain re-engineering: As global freight costs, tariffs and disruptions bite, having a Southern-Hemisphere (that is Africa-based) manufacturing anchor helps companies hedge risk.

For South Africa, this presents several opportunities: attracting foreign direct investment (FDI) in manufacturing, boosting local employment, enhancing skills, and increasing the value of exports.

The South African opportunity and the challenge

Singapore’s mission presents significant opportunities for South Africa, leveraging its advanced industrial infrastructure, SADC membership, and existing trade relationships within the region. Singaporean companies offer a strong history of global manufacturing and logistics, paving the way for South African firms to engage in joint ventures, supplier development, and technology transfer.

The Tolaram Group, a Singaporean conglomerate, has demonstrated a successful “manufacturing-for-Africa” model by producing fast-moving consumer goods locally on the continent instead of relying solely on exports. This approach holds significant promise for South Africa, which could similarly become a manufacturing hub for regional markets.

Successful execution, however, faces significant challenges in South Africa. These include power instability, risks associated with labour relations, infrastructure bottlenecks, and the crucial need to ensure foreign partnerships genuinely contribute to local value-addition. Realizing the potential benefits demands not only foreign investment but also robust local manufacturing ecosystems, encompassing suppliers, skilled labour, and logistics—that are effectively aligned with the imports and production activities of Singaporean companies.

Implications for South Africa’s manufacturing ambition

South Africa stands to gain significantly from Singaporean investment, which could accelerate its manufacturing sector’s transformation. By forming partnerships, the country can facilitate technology transfer, provide training, and integrate into global value chains. This collaboration could lead to an expansion of consumer goods manufacturing—including snacks, packaging, and devices—thereby creating employment opportunities in assembly, processing, and logistics.

Agri-processing presents a significant opportunity for South Africa. By combining the country’s abundant agricultural resources with the processing expertise of Singaporean firms, South Africa can transition from exporting raw commodities to producing finished goods. This advancement up the value chain is a long-standing goal in development efforts.

Efficient logistics are crucial for effective manufacturing. South Africa’s ports, rail, and regional corridors are integral to its value proposition, especially with Singaporean firms contributing their expertise in logistics optimization and global distribution, thereby strengthening South Africa’s regional standing.

The way forward: factors for success

To maximise benefits, South Africa needs to refine several key areas. These include establishing clear frameworks to encourage manufacturing investment, technology transfer, and supply chain localisation. Local businesses should be prepared to act as active suppliers to Singapore-led manufacturing projects, rather than simply hosting them. It’s crucial to leverage the SADC region and potentially the African Continental Free Trade Area (AfCFTA) to ensure that manufacturing operations serve not only South Africa but also the wider African markets. Additionally, power, transport, and logistics infrastructure must meet global manufacturing standards. Aligning with Singaporean firms’ high standards for quality, sustainability, and process innovation will elevate South African manufacturing.

This Singaporean delegation signifies more than a standard business visit. It represents a strategic convergence of global manufacturing principles with local prospects in South Africa. South Africa stands to gain tangible benefits: manufacturing investment, technology, and enhanced regional standing. For Singapore, this move is strategic, aiming to diversify production, access new growth markets, and establish more resilient supply chains by moving away from traditional risk areas.

This partnership could serve as a model for how mid-sized economies collaborate for mutual benefit, especially as the global manufacturing landscape is redefined. If successful, South African industry stands to gain new partners, fresh investment, and stronger global connections. Simultaneously, Singaporean firms would establish a presence in a dynamic region offering significant untapped manufacturing potential.

Sesona Mdlokovana

Associate at BRICS+ Consulting Group 

African Specialist

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