Since the advent of democracy 26 years ago, South Africa has been instrumental in promoting its African agenda on the premise of ‘African solutions to African problems’, based on the idea that Africans and African policymakers are inherently better suited to understanding and hence developing solutions to the challenges faced by its citizens. At the forefront of this common purpose is the drive to promote economic growth and sustainable development, not just for South Africa, but also for the continent.
South Africa has always been and remains committed to driving continental growth. As attested by the latest EY Africa Attractiveness Report of 2019, South Africa continues to be the most extensive investor into the rest of the continent, with the widest geographical spread, across the most sectors, among African nations.
For instance, in 2018, South African investors placed a record 10 projects in Nigeria, totalling $375m, by far its greatest Foreign Direct Investment (FDI) commitment over the last five years. Kenya also saw a sharp rise in South African inward bound investment, attracting $190m in capital spread across six projects in 2018. And while South Africa’s FDI into both Ghana and Mozambique slowed in that same year, it came from a relatively high base.
These investments affirm South Africa’s strong commitment to trading with the continent, with EY ranking the country the fifth largest FDI investor into the continent globally.
Furthermore, as the most industrialised country on the African continent, South Africa continues to make massive investments in infrastructure development. The Maputo Development Corridor is one such example. Officially launched by the governments of South Africa and Mozambique in 1996, it is touted as the region’s largest and most successful development corridor initiative. Comprising road, rail, border posts, port and terminal facilities, this transportation corridor connects South Africa’s Gauteng, Limpopo and Mpumalanga provinces to the port of Maputo in Mozambique, while also forming part of a greater transport axis linking the Atlantic and Indian Ocean via the sub-continent of Southern Africa.
On the global front, South Africa also continues to illustrate its commitment to ensuring that its membership of multinational clubs, such as the BRICS, benefits the continent, as showcased when the New Development Bank (formerly the BRICS Development Bank) approved its first cross-border infrastructure project – the Lesotho Highlands Water Project. Here South Africa is the borrowing country, and Lesotho the country of implementation.
South Africa has, time and again, illustrated its commitment to continental growth for a prosperous Africa. As this year’s Chair of the African Union, South Africa has assumed an influential position to give substance to the African Continental Free Trade Agreement (AfCFTA) which came into force on 31 May 2019 for the 24 countries that had deposited their instruments of ratification.
Intended to create the world’s largest free trade area of over a billion people, AfCFTA is the best and most sustainable way to bolster the economic growth of South Africa and the continent through accelerated intra-Africa trade.
As we seek ways to deal with the impact of COVID-19 on our lives – socially, politically and economically – ensuring the success of AfCFTA is now more important than ever.
Already, South Africa has shown proactive leadership in responding to what has become a global health pandemic, appointing five special envoys to mobilise international support for Africa’s efforts to address the economic challenges the continent will face as a result of the COVID-19 pandemic. The five envoys are Dr Ngozi Okonjo-Iweala of Nigeria, Dr Donald Kaberuka of Rwanda, Mr Tidjane Thiam of Côte d’Ivoire, Mr Trevor Manuel of South Africa and Mr Benkhalfa Abderrahmane of Algeria.
South Africa has emphasized Africa’s progressive future and the need, now more than ever, for African states to trade with each other, and through the AfCFTA, improve access to existing markets, while forging access to new markets.
“As African nations, there has never been a better time to deepen our collaboration to ensure the African Continental Free Trade Area, our most ambitious collective venture yet, is a success. This is an opportunity to grow our economies and to use our considerable collective resources to uplift our people” so President Ramaphosa.
Dr Judy Smith-Höhn
GM: Global Markets