Our gates to Africa are still open wide

2013-02-07 00:00

THE South African breakthrough in 1994 was a result of engagement and negotiations. Dialogue is the lifeblood of our democracy and is critical for the growth and prosperity of our country.

It is always from this starting point that the African National Congress (ANC) and its government approaches any contribution made on what we need to do as a country to attain our rightful place among the nations of the world.

The contribution offered by Hilton Tarrant, which appeared in The Witness on January 29, under the headline: “Wake up, South Africa: the myth of South Africa as the gateway to Africa is dead”, was received in this spirit and we hope he will also accept engagement on some of the assertions that he makes.

We trust Tarrant will recall an episode when Jim O’Neill, global chairperson of Goldman Sachs Asset Management, set the cat among the pigeons by claiming that South Africa did not qualify to be a member of the Bric nations. O’Neill is famed, at least from a South African perspective, for having coined the term Bric about 11 years ago, to describe the exclusive group of the fastest-growing nations on Earth, viz Brazil, Russia, India and China.

When South Africa was invited to become a member of the Bric nations, O’Neill was critical, saying South Africa’s was too small an economy to be part of Bric.

While the storm over O’Neill’s comments was raging, one of South Africa’s entities, the Airports Company of South Africa, together with a Brazilian joint venture partner, won a R70 billion ($9,2 billion) concession to overhaul and operate the business and the most valuable of three Brazilian airports.

So when Brazil (which according to the International Monetary Fund (IMF) has an economy valued at around $2,52 trillion, more than the United Kingdom’s at around $2,48 trillion) won the rights to host the 2014 Fifa World Cup and 2016 Olympic Games, they looked no further than “small” South Africa for expertise on how to manage and overhaul one of their busiest airports. Of course, in a world burdened with trouble, this story did not receive so much coverage as to be noticed.

As South Africans, we tend to get enveloped “in our little bubble” and forget to look at what is happening around us.

South Africa must be one of the few nations in the world that, despite obvious challenges, does not celebrate its achievements.

For example, as many people know, according to the World Economic Forum’s (WEF) Global Competitiveness Report 2012/13, our country is ranked number 52 overall out of 144 countries, higher than Russia and India. According to the report, the country is ranked 25th in the market-size pillar, 20th on the intellectual property protections, 26 on property rights and second on the accountability of its private institutions. As the report puts it, particularly impressive is the country’s financial market development (third), indicating high confidence in South Africa’s financial markets at a time when trust is returning only slowly in many other parts of the world.

Of course, it would be the height of self-deception to gloss over a number of issues that were raised as challenges in the report, particularly in education, health and labour-employer relations, to mention just a few.

But what does one make of the fact that South Africa’s gateway status to the continent is dead? The fact of the matter is that our foreign policy in the post-1994 era has always been predicated on the understanding that South Africa cannot be an island of prosperity in a sea of underdevelopment.

It is because of this reason that South Africa has committed substantial human and financial resources to placing Africa at the centre of the global agenda and, more importantly, to reforming multi-lateral institutions such as the United Nations, and Brettenwood institutions such as the International Monetary Fund (IMF).

It is also because of this reason that South Africa has been pushing for regional integration and the creation of a free-trade area in order to ensure that Africa is able to leverage its muscle as a trading bloc.

The proposed free-trade area would result in the East African Community (EAC), Common Market for Eastern and Central Africa (Comesa) and Southern African Development Community (SADC), which have a combined population of more than 590 million, and a gross domestic product estimated to be close to $1 trillion a year, merging.

The fact that six of the world’s 10 fastest-growing economies over the past decade are from Africa is thanks to a number of efforts in which, as part of the collective, South Africa played no small part to ensure that the continent’s rebirth is realised. In this regard, the growth of Africa’s economies should be a welcome development because in the end, to purloin the enduring aphorism coined by John F. Kennedy, a rising tide lifts all boats. The rapid growth of African economies will ensure that there is, for example, much more intra-trade between African nations.

As positive sentiment about Africa’s progress gains more currency, our country will have to compete with other African countries for investment. This competition should be symbiotic and mutually beneficial. The fact that MTN, which is a South African-based company, enjoys much growth in subscribers and revenue in Nigeria speaks to this relationship.

Of course, in a world characterised by intense competition for scarce resources, South Africa cannot afford to be complacent. The fact that South Africa is spearheading the biggest infrastructure-led development, which will see rail, road networks and ports, among others, being upgraded, shows that as a country, we are acutely aware that we have to sharpen our competitive advantages continuously.

Another point is that while South Africa has been growing at about three percent over the past few years, while other African countries, such as Mozambique, Ghana and Angola have been growing at more than five percent, they are growing from a small base, compared to South Africa’s vastly diversified economy. South Africa, notwithstanding its many challenges, is still by far the biggest economy on the continent. South Africa still has the most advanced financial system on the continent. For example, when it comes to business sophistication and innovation, South Africa, according to the WEF report, is ranked 38th and 42nd, respectively.

While he raises a genuine debate about our gateway status, Tarrant seems to base most of his arguments on the assertions of one social partner — those who represent business. As a result, one reads a lot about what the government has to do or has done wrong, which has resulted in us losing our gateway status.

Nowhere in the article is it mentioned that in KwaZulu-Natal, for example, the government has invested about R7 billion in constructing the King Shaka International Airport within the state-of-the-art Dube Trade Port. Nor are we reminded that, last year, the government allocated R300 billion over the next seven years for infrastructure development to Transnet.

Our state is a developmental one. It leaves the business of trading to business players. Our business must show its appetite for competing in the global economy. This government cannot do that for them.

The challenge facing all South Africans (and not the government exclusively) is to ensure that we deal candidly with our challenges, without over-amplifying them. It is up to all social partners to engage and collectively address our common challenges.

• Michael Mabuyakhulu is the KwaZulu-Natal MEC for Economic Development and Tourism. He writes in his personal capacity.

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