18 July 2013
The next phase in Africa’s growth must be industrialisation, with the continent producing its own value-added goods, Trade and Industry Minister Rob Davies told the South Africa-European Union business forum in Pretoria on Wednesday.
“There’s a growing and significant recognition that Africa’s time has come, that Africa is part of the new growth frontier,” Davies told the forum, held on the eve of the 6th SA-EU summit scheduled for Thursday.
“The African continent has performed relatively well during the [2008-09 global financial] crisis, but more significantly the African continent is positioning itself to make some very important decisions which we believe will lead the continent to a new phase of growth and development.
“We can no longer afford to locate ourselves in the global value chains as producers and exporters of raw materials and importers of finished products.”
Referring to the negotiations on the Economic Partnership Agreement (EPA) between the EU and the African, Caribbean and Pacific Group of States, Davies said: “We are saying that we need to address issues of real economy co-operation.”
He noted that the recent UN Conference on Trade and Development report on African trade pointed to the need to the necessary infrastructure put in place to connect African economies with each other.
“Africa is poised to industrialise, the industrialisation requires regional integration and to address the infrastructure constraints,” the minister said, adding that there had been increasing interest in the continent from existing as well as new potential trade and investment partners.
SA’s largest trading partner
Davies said the EU remained South Africa’s largest trading partner, which was also true to a large extent to the rest of the continent as a whole. For example, South Africa was seeing an increase in investment from companies that operated in the financial sector.
“We continue as South Africa to support, encourage, welcome, work actively with potential investors,” he said.
Also speaking at Wednesday’s forum, European Commissioner for Trade Karel De Gucht said the Trade, Development, and Cooperation Agreement (TDCA) between South Africa and the EU had been a success.
In terms of the TDCA, South Africa has duty-free access to the European market for about 65% of its agricultural products and in return for that the country receives more than 90% from the EU.
“Trade between the EU and South Africa has increased steadily since 2000 – from €26-billion to €46-billion today. What is maybe more important is that trade has been diverse and has continued to diversify further as new business opportunities were created,” De Gucht said.
The EU remains the biggest investor in South Africa, with EU countries being the source of 88% of foreign direct investment stock in SA.