31 January 2012
Brand South Africa brought together global leaders from business and politics to discuss the role of Africa in the “Global Transformation”, the key theme of this year’s World Economic Forum (WEF) in Davos, Switzerland.
Hosted in partnership with TIME magazine, the event featured Finance Minister Pravin Gordhan alongside Zurich Financial Services’ Asia Pacific and Middle East CEO Geoff Riddell and TIME international editor Jim Frederick.
The session, which focused on Africa’s role in an increasingly multi-polar world, reached a consensus that infrastructure development, the removal of trade barriers, more sophisticated financial markets and shifting from distributing raw commodities to exporting modified commodities are key conditions for creating more diversified economies across the continent.
“There is a huge opportunity for the continent to start picking up dividends as China moves up the value chain and releases jobs, enabling African countries to outbid countries like Vietnam for these jobs,” said Gordhan. “However, people won’t come to Africa just because its Africa, we need to create the opportunity for people to partner; that is the great transformation.
“In the near future, we will need to create jobs for a billion people and we must ensure that there is political will, the institutions and infrastructure that enable us to move into the next epoch of developments and bringing more value to our exports, for example beneficiation.”
Development at three levels
The panellists noted that because of its size – both in terms of population and land mass – development in Africa needs to be considered at three levels: country, sub-regional and pan-regional.
“The more we get cross-country initiatives, the more we get rid of some of the curses like over-politicisation and corruption,” said Riddell. Echoing this sentiment, Gordhan added, “Only 10% of African trade happens in Africa, in Europe this figure is up near 60%. We need Africa to invest in Africa.”
Gordhan noted that while the global economic crisis has put pressures on Africa, the current situation in Europe has presented Africa with an opportunity to learn and improve on regional economic integration.
“The world is looking at itself and saying multi-polarity is a reality,” he said. “The recent crisis has shown us that despite the euro, in terms of identity, policy and financial structures, sub-regions in Europe still exist.”
Corruption ‘not unique to Africa’
Responding to a common perception that corruption with governments was a key barrier to development in Africa, Gordhan noted it is not a problem unique to the continent.
“Corruption exists in every country – it is just a question of degree,” he said. “In Africa, it is an issue and one we take seriously. I believe there is an obligation on investors in Africa to help create a better climate.
“I am hopeful that we will challenge it more as new leaders emerge in business and politics.”
Riddell agreed and pointed to the impact corruption indices had had on governments in the Middle East. He believed the same effect was taking place across Africa.
He also added that cross-border trade had less corruption, and noted that with an increase in regional economic integration he expects to see a parallel decrease in corruption.
“The economy is going in the right direction,” said Riddell. “It will keep doing so, there will be bumps on the road, but Africa is where we see balance and growth in our corporate portfolios.”
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