Export promotion in South Africa : criteria for the evaluation of its success

Abstract

Internationalisation has required companies to look outside their domestic markets and also utilize opportunities internationally. Companies are engaging in export activities to pursue greater market share and growth in profits. Countries also benefit from increased exports by earning more foreign exchange and creating more employment opportunities. Therefore governments and other private entities are providing export promotion programmes which are designed to encourage companies to promote the exports of goods and services in foreign markets. When assistance to promote exports is provided, it is important to evaluate how effectively the limited government resources are spent and applied. Such evaluation of export promotion programmes will enable public policy-makers to expand those programmes that are more effective. The aim of this study was to determine the Return on Investment (ROI) of some of the export promotion programmes provided by the Department of Trade and Industry (DTI). The relationship between the total cost of export assistance and actual export sales for national pavilions and trade missions were evaluated. These two programmes are the largest in the DTl's Export Marketing and Investment Assistance (EMIA) scheme. Evaluation measures or criteria which have been successfully implemented by four other countries were examined in order to make practical recommendations to the DTI on how to implement appropriate criteria for the evaluation of these export promotion programmes. The results of this study yielded that the ROI per sector for national pavilions and trade missions produced positive results. For sustainable export growth, however, the DTI will have to develop new criteria for the evaluation of export promotion programmes. It should also focus more on the manufacturing and services industries to increase the export volumes and obtain higher ROI of government spending in export promotion programmes.