2 July 2012
Africa, and South Africa as a key gateway to the continent, will have a bright future as the next growth frontier in the global economy if they can position themselves correctly, says Trade and Industry Minister Rob Davies.
Speaking during the New Age/SABC breakfast briefing in Sandton, Johannesburg on Friday, Davies highlighted the need for economic integration on the continent, noting that promoting regional economic integration was an important element of South Africa’s trade strategy.
He noted that there were around 20 emerging economies that were becoming the main drivers of economic growth and economic dynamism in the world.
Emerging economies to drive global growth
“It is estimated that the 20-odd emerging economies will be responsible for something like 61% of global growth over the next few decades and that these countries were already responsible for something like one-third of world trade,” he said.
The hope of recovery from the economic crisis still resided in the emerging economies.
“Good news for us is that Africa is very much part of the growth story,” Davies said. “There is growing recognition across the world that Africa is the next growth frontier after Asia ahead of some other parts of the emerging world.”
This was exemplified by the fact that the IMF estimates that this year the average growth on the African continent will be about 5.5%. In addition, six of the 10 fastest growing economies were located on the African continent.
“If one attends international forums and engages investors across the world, we will see that many of them are now taking seriously the African continent as the growth frontier.”
The factors Davies identified as having driven growth in Africa included a mineral products boom; a consumer-driven boom in Africa; the fact that the continent had been spared either a systemic financial crisis or a sovereign debt crisis; and infrastructure development that had taken place and which has supported economic growth across the continent.
Africa ‘must now industrialise’
What was now required was to change this economic spurt into a sustained development effort, and that required the continent to industrialise, Davies said.
South Africa had an important role, an important set of opportunities and important responsibilities in this regard, as it was the most industrialised country on the African continent.
Three main areas that have been identified for the focus of industrial development, Davies said, were the need to add value to mineral products, to agricultural products and to develop a pharmaceutical industry.
Also important was the need to consolidate and build new, mutually beneficial trade and investment relations with dynamic economics and dynamic sectors across the world.
South Africa’s membership of BRICS was a huge advantage in consolidating and building a relationship with the fastest growing economies and most important leading economies in the emerging world, Davies added.