More SA ‘economic involvement’ needed in Africa

2012-05-18 13:38

Finance Minister Pravin Gordhan has urged increased South African economic involvement in Africa.

Several economies in Africa and the developing world continued to grow more quickly than the main developed economies, he told the National Assembly during debate on his budget vote today.

Trade and investment patterns were shifting rapidly. Both South Africa’s international relations and trade and industry policies had to adapt to this rapidly changing global environment.

“We need to join our African partners in boosting industrialisation in Africa, developing regional value chains, and increasing intra-African trade. We need to take stock of where we are in the light of the financial crisis,” he said.

Growth was an imperative if poverty and inequality were to be reduced.

Much of Europe was currently grappling with growth and structural reforms, on the one hand, and the need to reduce debt and financial imbalances on the other.

“Our choices may not seem so stark, and perhaps our challenges are more about institution-building and adjustment to new global trade opportunities.”

There was good evidence that countries with sustainable macro-economic policies, sound institutions and good governance, fared better than others in sustaining rapid growth for long periods.

The evidence was also clear that human development and the quality of education were critical for growth and development.

The global financial crisis had exposed the limitations of unfettered liberalisation as a growth strategy, and had also highlighted the inadequacy of international co-operation in addressing collective interests and shared risks.

“In ensuring that our own interests are addressed in this global landscape, we seek with other developing countries a better balance in global governance and better institutions for collaboration and partnership.”

In this respect the work of the National Treasury and its associated institutions – the Development Bank of Southern Africa (DBSA), the Public Investment Corporation, the Financial Services Board, the SA Revenue Service and the Financial Intelligence Centre, among others – was highly dependent on the policies and programmes of his fellow ministers, other departments, and provinces and municipalities.

“Our successes, and our shortcomings, are shared. And we have to share in the challenge of finding a growth path that creates jobs, reduces poverty, and broadens participation in a more rapidly expanding economy,” Gordhan said.

The DBSA played a leadership role in regional development strategies and initiatives.

The funding of the international division for its regional operations was limited to 33% of the DBSA’s risk capital, and investments were targeted at Southern African Development Community countries.

The DBSA planned to expand its role to the rest of Africa.

The bank would place strong emphasis on reconstruction and low-income countries with viable projects.

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