- JOHANNESBURG: African firms exporting everything from Kenyan roses and South African BMWs to Europe are suffering from euro and sterling weakness that is making the continent a pricier destination just before its first World Cup.
In South Africa, which rolls out the red carpet in June to thousands of World Cup visitors, many from Europe, fruit growers are trying to shift export lines to the Middle East and Asia, whose currencies have remained firmer than European units.
South Africa's rand is 17 percent stronger against the euro compared to a year ago, and 14 percent against the pound - meaning Europeans arriving for the World Cup will not find it as cheap a destination as they imagined when they booked their flights in 2009.
Kenya's shilling has also appreciated in the last year, by 11 percent against sterling and 7 percent against the euro, making a safari stopover on the way home a far from cheap option.
The Indian Ocean island's New Mauritius Hotels last week cited the weak pound and euro as reasons for an uncertain earnings outlook, reflecting the fears of many tourism operators on the continent.
Europe accounts for 30 percent of all South African exports, and with concerns about budget deficits likely to hang over the euro and pound for the foreseeable future, trading for many exporters is likely to remain tough.
"It will impact on sales," said Justin Chadwick, chief executive of South Africa's Citrus Growers Association, which represents an industry that exports $600 million of oranges and other fruit each year, second only to Spain.
"A lot of people are trying to divert fruit to the Middle East and Far East, but in reality there's very little one can do about it."
Another sector likely to be hit is the automotive industry, which accounts for 6 percent of South African gross domestic product and 11 percent of all exports.
Nearly half of those shipments, worth a total 25 billion rand ($3.2 billion) in 2009, are to Europe, according to industry body NAAMSA.
In Kenya, much of the brunt will be borne by the horticultural sector, the east African country's leading hard currency earner that raked in nearly $1 billion last year. Most of Kenya's flower and fruit exports are to Europe.
Neighboring Uganda and Ethiopia have similar industries but on a much smaller scale.
One region that stands to gain, however, is the 14-country CFA franc zone, whose currency is pegged to the euro and whose exports to the rest of the world will therefore become more competitive.
Shipments of commodities priced in dollars will also provide a local currency windfall.
"The whole of the CFA zone from Senegal down to Cameroon is going to be the beneficiary of dollar-based exports - oil, cocoa, coffee, groundnuts, you name it, said Christopher Hartland-Peel of London-based brokerage Exotix.
Meanwhile, a South African transport strike that has crippled rail and port operations looked set to drag on after one of two unions rejected on Friday a revised wage deal by state-owned logistics group Transnet.
The strike, in its second week, has curbed exports of metals, cars, fruit and wine to Europe and Asia as well as imports of vehicle parts and fuel supplies just three weeks before the start of the soccer World Cup in June.
Economists have estimated losses in the hundreds of millions of rand, but this could rise to billions if the strike dragged on, and it may take weeks to clear the backlog at the ports.
The strike has hurt global miners with operations in South Africa, forcing some to declare force majeure, and automakers - a big employer and contributor to the economy - warned they would shut their operations if the strike persists.
So far, coal exports to power plants in Europe and Asia have not been affected thanks to stocks at the ports, and fuel supplies to petrol pumps were also unaffected.
South Africa hosts the soccer World Cup next month, and FIFA said imports of some equipment for the event have been affected, but the country is bracing for more protests ahead of the event.
A strike by half of the workers at state-owned power utility Eskom due to start on Wednesday could disrupt electricity supply in Africa's biggest economy, and embarrass President Jacob Zuma's government before the world's premier sports event.
South African civil servants, including nurses, police and teachers, may consider striking unless a mediator helps to resolve a wage dispute with the government.
The industrial action over the past few weeks has drawn criticism from economists and the central bank who say the workers are trying to hold the government and state enterprises to ransom by staging strikes close to the World Cup, to squeeze wage hikes, mostly above inflation of 5.1 percent.
They say this could hamper the economy's ability to continue its recovery from its first recession in 17 years.

