Sanctioning Apartheid - KORA

SamW and Finnncing South Africu's Foreign Trade
factor needed to keep the amount of outstandings constant That
is a steady state mnciitim with new loans reglacing previous
ones as they are paid up. For five-year u-edits the factor is 3 and
for seven-year credits 4. This gives total long-term outstandings
of $1.67 to !EL23 billion5
This estimation method gives a range of outstanding credits
needed to finance all of South Africa's trade of $4.99 billion to
$831 billion far 1985. South Africa primarily exports raw
materials and basic industrial inputs which were assigned 30- to
Way terms in the above scheme. Its imports, by contrast,
include a dety of industrial goods which have trade credits
with longer terms. As a result, the outstanding trade credits of
$3.41 billion to $5.65 billion needed to finance imports is about
three times greater than the $1.02 to $2.05 billion in oustandings
needed to finance expo*. All these results are scaled to trade
figure for 1985 and 1986 and they are summarid in Table 4.
The exporting country provides trade finance in most cases
of international sales. Where credit is provided as part of a sales
transaction, the exporter or the exportefs bank usually receive
delayed payment far gaods after they have been shipped.
Since South African imports require about three times the
oubtanding trade h c e as the countrfs exports, and since the
exporting countries gmmdy provide trade finance, it is logical
to qect that foreign countries provide about three quarters of
the credit needed to finance South Afnica's foreign trade while
South Africa only provides about one quarter.
miurn- and Long-Tmn Credits Estimated fiom Capital
Investment Data
The total annual imports of capital goods, requking medium
and long tenn &tan&& will now be estimated from entirely
di&rent source data in order to provide a better evaluation of
the possible error in the fEgure of $558 million for 1985 estimated
above frum trade data. Here the starting point will be figure of
total investment in machinery and equipment by the South
African economy as a whole.