23 May 2016
A range of challenges must be overcome to ensure better trade and investment between African countries, as well as with the rest of the world. This was one of the conclusions of a panel discussion led by Dr Petrus De Kock, Brand South Africa’s general manager for research, at the Tshwane International Trade and Infrastructure Investment Conference (Titiic) held at the city’s CSIR International Conference Centre last week.
The panel included Thomson Wilks Attorneys director Safiyya Akoojee, Portia Gumbu-Dube, head of business development at the Export Credit Insurance Corporation of South Africa, the Department of Trade and Industry’s chief director for Africa Lerato Mataboge, and Catherine Grant-Makokera of Tutwa Consulting.
In his introduction, De Kock highlighted research indicating positive trends in African trade, particularly the dynamic growth of trade and investment between the Middle East and Asia region and African countries on the continent’s eastern seaboard.
He also drew attention to the latest Ernst and Young (EY) Africa Attractiveness Survey, which revealed a huge boost in foreign direct investment (FDI) into traditionally small markets such as Rwanda – recent host of the 2016 World Economic Forum on Africa – and Botswana.
South African remains the top destination for investment, according to the EY survey, with Tshwane playing a vital role. The city ranked first for South Africa, out of 74 African metropoles, in the 2015 MasterCard African Cities Growth Index, thanks to its robust infrastructure investment and the access it provides to government structures.
The panel was asked to offer workable ways to solve challenges to ensure these rankings were maintained and improved, across the whole continent.
The DTI’s Mataboge said there were three main problems facing intra-African trade: lack of infrastructure, fragmented markets and inadequate diversity of industries. But, she said, solutions were being explored in partnership between private and public enterprises, including the DTI.
The DTI, she said, worked with three key pillars to find solutions:
- Further integration of free trade between more African countries by reducing red tape. This meant more efficient border control processes, visa regulations and trade permissions.
- More cross-border infrastructure development, including improving road and rail systems.
- Building more capacity in regional and urban industrialisation, where municipalities were well positioned at micro level to engineer ways of doing business.
The Trade Africa programme, a DTI initiative, is currently working to grow and strengthen bilateral trade between African countries. Mataboge said the ultimate goal was to involve all African countries, not only the larger regional players, in the continent’s economy. Vital to this was to inspire confidence in emerging economic players on the continent.
Gumbu-Dube of the Export Credit Insurance Corporation offered an innovative way to improve efficiency of cross-border trade in Africa. There should be an emphasis, she said, on language and cultural skills training, to supplement conventional trade, law and economics education. Graduates and new entrants into business in Africa should be proficient in the language, and have good knowledge of the culture and history, of countries they want to trade with. This would help them gain an upper hand in the market.
Improved technical knowledge, particularly in new digital technologies, should also be ingrained during tertiary education. These were the kind of soft skills needed to complement the harder, more traditional business skills that lead to success, according to Gumbu-Dube. “We need to educate each other on how to do good cross-border trade,” she said.
As a director at Tutwa Consulting, one of the Africa’s top trade consulting firms, Grant-Makokera emphasised the importance of cross-border trade facilitation – essentially helping all parties speak the same business language. Differing trade and business processes drove up costs and inhibited the production processes, reducing profits and jobs.
Trade in Africa, she said, should not be done in isolation. Infrastructure should be uniform and automated across the board as “one line of communication that helps neighbours communicate and trade more effectively”.
The key to this was more robust interaction between public and private enterprise, not only making mutually beneficial policies but ensuring these policies are properly put into practice.
A director at Thomson Wilk Attorneys, Akoojee outlined the role of international trade law and corporate litigation in improving trade between African countries. One challenge, in her experience, is that there was no longevity in investments. There had to be more security and assured confidence from partners in Africa to inspire international investors. Professional auditing and good legal assistance were key to making that happen.
Akoojee agreed that there had to be more cultural understanding between African partners. While English remained an important business language, French- speaking Africa held a lot of potential for more business, so understanding the history and language of these territories would be an advantage. She added that conferences like Titiic were great opportunities for businesspeople to find out what was going on at grassroots level across the continent, with the added benefit of finding new opportunities to invest in projects.
De Kock explained that there were more avenues for business to speak to governments about investments, to build and sustain strong relationships through individual business chambers or each country’s trade missions.
The Titiic conference also included presentations on global trade and investment trends by Gaung Zhe Chen representing the World Bank, and thoughts on Africa’s business trends at ground level from CNN’s Africa business correspondent Eleni Giokos.