31 October 2013
South Africa and the Democratic Republic of Congo (DRC) must explore ways to increase trade and investment between the two countries, President Jacob Zuma told the South Africa-DRC Business Forum in Kinshasa on Wednesday.
Zuma, who wrapped up his two-day state visit to the DRC on Wednesday, told the forum that the prevailing state of the global economy dictated that regional integration be placed at the top of Africa’s economic agenda.
“There is no stronger case for intra-African trade than the recent global financial crises, which decreased African export revenues generated from the traditional western markets.
“Africa has a potential market of US$2.6-trillion. The DRC and the countries surrounding it have a potential market comprising 200-million consumers. Yet only 10% of global trade takes place between African countries.”
Zuma underscored the current view that the time was right for investors to turn to Africa as the next growth frontier.
“African growth rates will average 6% in 2014. In comparison, growth in the developed world will average 3.6%. The DRC is estimated to grow at 8.2% in this year alone. Against this backdrop, any investor would be hard pressed to find higher rates of return elsewhere in the world.”
South African companies are investing in the DRC in the mining, telecommunications, financial services, road infrastructure, construction and hospitality sectors, among others. Total South African investment in the DRC between 2006 and 2012 is estimated at R12.5-billion, with over 4 000 jobs created.
South Africa and the DRC have a bi-national commission (BNC) which has so far overseen the signing of 32 bilateral agreements.
Stimulating continental growth
Various African governments have signed the Tripartite Free Trade Area (T-FTA) agreement paving the way for more meaningful intra-African trade.
Zuma said one notable initiative already launched under the arrangement was the Tripartite North-South Corridor Investment Programme.
With initial funding of $1.2-billion (a large proportion coming from the African Development Bank and the Development Bank of Southern Africa), and strong support from the South African government, actions are being taken to fast-track this project.
The programme supports some of Africa’s busiest trade routes, linking the port of Dar es Salaam in Tanzania to the copper belt in Zambia and Lubumbashi in the DRC. It then continues down through Zimbabwe and Botswana to Africa’s largest and busiest port, Durban, in South Africa.
In all, the North-South Corridor Initiative will service eight countries: Tanzania, the DRC, Zambia, Malawi, Botswana, Zimbabwe, Mozambique and South Africa.
Zuma’s visit to the DRC also saw the signing of a treaty on the Grand Inga Hydropower Project, which could eventually become the largest hydroelectric project in the world, with the potential to power half of the continent.