“Africa is rising”

Honourable Premier, Ms Thandi Modise,

The Minister of Trade and Industry, Minister Rob Davies and all Ministers and Deputy Ministers,

Captains of commerce and industry,

Ladies and gentlemen,

It is my honour to join you today at this 4th International Trade and Investment Conference hosted by our government through the Department of Trade and Industry.

By being here, you are joining a remarkably diverse group of premier leaders in both government and industry, from across the world, to discuss the vast array of opportunities in Africa.

There is no doubt that over the past decade, Africa has come from being the so-called ‘hopeless Continent’ to being a rising star.

Profound changes have taken place which has brought about this turnaround.

We can count the fact that Africa has come from being the notorious continent with 16 raging wars in 2002, to a continent which is fast achieving peace and stability.

Around two thirds of governments in Africa are democratically elected, compared with just eight in 1991. The newest democratic states are Guinea Conakry, Niger and Cote d’Ivoire.

The spread of peace and good governance is providing Africa’s entrepreneurs with the necessary conducive environment to promote themselves and establish their industries.

They can now turn their ideas into major projects.

These new developments are backed up by growth figures. According to the International Monetary Fund figures, region-wide GDP growth has averaged 5.5% from 2000 to 2010, more than double the rate we had in Africa during the 1980s and 1990s.

It is remarkable that six of the world’s fastest ten growing economies were African. In eight of the past ten years, Africa has grown faster than East Asia.

Naturally, we all want to see Africa’s growth acceleration being widespread and also fairly inclusive, with the poorest seeing significant improvements in their lives.

Steady progress has also been made in education, health, sanitation, and in empowering women but as the progress with the implementation of the Millennium Development Goals shows, the continent has a long way to go. But it is good that progress is being made economically, as this will produce the resources we need to achieve economic growth and improve the quality of life.

Ladies and gentlemen,

As you can appreciate, we are standing in an incredibly privileged position today, where we can witness Africa’s epic comeback.

We are all aware of Africa’s history. Many of us have even been closely intertwined with Africa’s struggles, pain and suffering. But today we can stand here and proudly watch Africa finally rising.

There is no doubt that these are only the first rays of light, glorious Africa is yet to reveal itself.

But despite all the good news, companies have been slow to enter Africa. Some executives are still missing the signals. Others question whether Africa’s surge is just the result of one-off lift by the global commodities boom, or whether it is really a sustained economic take-off? “Will Africa continue to rise,” they wonder, as the Economist asked last year?

The answer to this is widely found. I expect that over the next two days this question will be answered numerous times, each time giving the same answer. Yes, – undoubtedly yes. Africa will continue to rise.

But what Africa needs, is to have her own people to believe this, and to spread this powerful positive message using all the tools and information at our disposal. We need Africans to stop being pessimistic about their continent, and to be the leading spokespersons and ambassadors. If we do not believe what we see and experience, the rise of our beloved motherland, why should the rest of the world!

I challenge all Africans today, to accept the fact that their continent is changing. They must release themselves from the shackles of self-doubt and celebrate these new developments.

Many reports have been produced by reputable think tanks pointing to the rise of Africa.

Some are busy studying what makes Africa finally succeed.

The 2010 Mckinsey Global Institute report, which I suspect you are all aware of, “Lions on the move: The progress and potential of African economies”, it was found that natural resources explain only a part of the African story.

It said natural resources account for just about a quarter of GDP growth from 2000 through 2008, while other industries, particularly manufacturing and services, contributed the rest.

A further answer to the rise of Africa can be found in the current activities and developments taking place in Africa.

Firstly, the African Union has taken a conscious decision about integration and to promote intra-African trade. Because of costly barriers, intra-African trade is unusually low. It averages 10%, which is less than half the level in other emerging market regions.

Creating larger regional markets will increase specialisation and competition and boost manufacturing.
A continental free trade area is being established.

And at a regional level, the Tripartite Free Trade area, bringing together COMESA, SADC and the East African Community will create a market of 26 countries, with a population of about 600-million people and a combined GDP of one trillion US dollars. This augurs well for the economic future of these regions.

Secondly, the infrastructure developments that have been undertaken in Africa will eliminate most of the hindrances to growth.

It is widely known that Africa’s inadequate infrastructure is one of the main factors inhibiting trade, integration and economic development.

It has been calculated that if the continent continues to narrow its infrastructure gap, economic growth will receive a further large boost – perhaps by as much as 2 percentage points a year.

In view of this, the AU has set up the Presidential Infrastructure Championship Initiative, a continental committee of eight NEPAD Heads of State and Government, to champion infrastructure projects at the highest level.

South Africa is also chair and champion of the North-South Road and Rail Corridor project.

This corridor cuts across eight countries in eastern and southern Africa and aims to facilitate trade by upgrading road, rail, power and port facilities, as well as simplifying cross-border regulatory procedures. This will enable producers and traders to access regional and international markets more easily.

The projects have already passed the feasibility studies phase and should be at the implementation phase by 2016.

Encouragingly, Africa is now able to spend about 72 billion US dollars a year on infrastructure, but there remains a 480 billion US dollars shortfall over the next decade to provide for unmet needs, particularly in water, power and transportation, and there is much scope for private participation and investment in this area.

Domestically, you would be aware of our own massive infrastructure development programme, which I announced in February this year.

We are on course to spend billions of rand on infrastructure in the coming years, focusing on rail, roads, energy, water, sanitation and the communication sectors throughout the country.

The plan also includes the building and refurbishment of universities, further education and training colleges, schools and hospitals. We have been working hard to unpack the projects and development implementation timelines.

This week the three spheres of government are meeting to discuss implementation. The programme will change the South African landscape. It will boost job creation, improve access to basic services and boost the competitiveness of our economy. You will get details later today in this conference.

I invite you to join us on this infrastructure journey and find areas in which you can participate.

Thirdly, ladies and gentlemen, on why Africa is succeeding, Africa’s demographic composition is bound to fuel long term growth. In 2010, 42% of Sub-Saharan Africa’s population was younger than 14 years old.

By 2050, the continent will be home to one in five of the planet’s young people and will have the world’s largest workforce of 1.2 billion. In that year, one in four workers in the world will be African, compared to one in eight from China, reversing today’s balance.

While other regions rapidly age, Africa will enjoy a demographic competitive advantage of young, energetic and increasingly educated workers to power the continent’s services and manufacturing sectors.

Finally, the growth of the information and communications technology sector in Africa has been phenomenal.

The number of mobile phone users has multiplied 33 times to 316 million users since the year 2000.

The internet is spreading around Africa at an even faster pace. These trends have strong positive effects on growth.

For example, for every 10 new mobile phones per 100 people a country adds, GDP is likely to increase by 0.8 percentage points.

Due to the lack of fixed line internet infrastructure, roughly 39% of mobile users access the internet via mobile. This has opened an entire new portal for assistance in health and education, in especially the most rural areas.

Ladies and gentlemen, indeed Africa is rising, and the signs are there for all to see.

What is left is for the business sector to grab the opportunity and reap the rewards of this growth, in a manner that promotes inclusive growth, and which creates decent work for the African people.

Africa is indeed open for business.

It is my pleasure to declare this Africa Dialogue Conference officially open!

I thank you.