SAs Strategy for Africas Economic Devolopment Mr Tshediso Matona Acting DirectorGeneral: Trade and I

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SAs Strategy for Africas Economic Devolopment
Mr Tshediso Matona Acting Director-General
Trade and Industry 24 August 2005
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Contents

• 1. Rationale and context
• Africas Developmental Challenges
• Africas Development Opportunities
• SA in Africas Economy
• SA/dti Challenges in Africas Development
• Guiding Principles in SAs Africa Strategy
• Areas of Engagement
• Stakeholders
• Conclusion
• Questions?

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Rationale Context

• Strategy seeks to establish framework and
  action-plan to guide interventions and
  engagements to promote economic development in
  Africa by SA government, private sector and other
  actors
• Strategy affirms the NEPAD framework and seeks to
  define a Role and Agenda for SA in implementation
  of NEPAD

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Development Challenges in Africa

• Challenges well-documented, esp. in NEPAD
  document
• Marginalisation from benefits globalization
• Africas share of global trade and investment
  minuscule, at 2 respective.
• Low levels of productive and institutional
  capacity, and underdeveloped physical
  infrastructure
• Low intra-Africa trade (at 10 of total) and low
  regional integration
• Dependence on commodities and on extra-Africa
  trade preferences for narrow export basket
• Debt (limit on gains from trade
• Political and macro-economic instability
• Human capital challenges (brain-drain, Hiv/Aids
  others

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Africas Development Opportunities

• Africa well-endowed with natural resources that
  are unexploited, and human capital reservoir
• Theres increasing stability, economic reform,
  and serious attempts to promote conducive climate
  for investment and growth
• Theres active recruitment of SA investment and
  other FDI

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SAs Position in the African Economy

• SA accounts for a third of Africas GPD is
  among the 3 leading sources of FDI on continent
• SAs economic links in Africa growing, SAs
  growth dev. drives Africas growth dev. (see
  recent IMF study)
• Africa increasingly key in SAs GDP growth, esp.
  manufactures (and in future key to advance of
  BEE)
• 16 of South Africas exports destined for Africa
  in 2003
• Full potential of links with continent yet to be
  fully tapped
• Huge trade imbalance in SAs favour
  unsustainable
• SAs contribution to economic dev. in the region
  Africa is a strategic imperative
• SA needs to proactively reposition itself in
  Africa as long-term economic partner for mutually
  beneficial co-op and sustainable development
• Development perspective impact must inform
  criteria for interventions/engagements in Africa,
  projects supported

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Challenges facing SA the dti

• External
• Legacy of apartheid past (Big Bro Syndrome
  trust problem)
• Afro-pessimism globally
• Low institutional capacity a barrier to
  cooperation
• Trade barriers
• Political Economic instability Risk
• Competition from major powers (EU, US, China,
  etc)
• Internal
• No institutional history culture of cooperation
  with Africa
• Afro-pessimism xenophobia
• Short-term-ism in approach to business
• Constraints in capacity in coordination in
  govt. with private sector
• Need to adopt Africa-centric instruments
  measures to support economic dev. on continent
• Need to bring SACU along SADC

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Guiding Principles for SAs Africa Strategy

• Asymmetry SA to lead make bigger concessions
  in trade economic dealings with African
  partners
• Africas challenges intertwined SAs strategy
  must be multi-pronged, promoting both trade
  supply-capacity, conducive investment climate
  infrastructure
• Strategy must located within NEPAD framework
  emphasise partnerships

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Areas of Engagement

• Regional Integration key pillar of economic dev.
  platform for cooperation with continent
  (strengthen SACU consolidate SADC)
• Market Access/Intra-Africa Trade Strategy
• encouraging access of Africa products to SA
  market ( SACU)
• adopt active import promotion policy programme?
  
• Need to consider Agoa-type preferential trade
  scheme?
• Need to pursue targeted FTAs (eg, Nigeria, Egypt,
  Kenya) export promotion
• Outward Investment Need to develop effective
  method to rehab. dev. infrastructure
  production (Spatial Dev. Initiatives)
• Establish Institutional Legal frameworks for
  coop, trade investment (BNCs/JMCs, MOUs,
  Investment Agreements, Tech coop)
• Coordinate NEPAD Implementation promote
  alignment of engagements/interactions in Africa
  with NEPAD goals
• Multilateral Engagement (AU) Participate lead
  in AU trade integration agenda
• Forge Common African Approach to Global Economic
  Issues (e.g. WTO and Doha Round of trade
  negotiations)

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What role can South Africa play in African
economic development?

• South African growth and economic development can
  have an even more profound impact in African
  development (Recent studies from the IMF indicate
  that South Africas growth has a positive effect
  on Africas growth)
• Trade (direct and indirect effects-spillovers)
  an increase in intra-Africa trade
• Regional economic integration (SACU, SADC and
  other RECs)
• Business and consumer confidence
• Market and product diversification
• Strengthening of institutions and harmonisation
  of policies, standards and customs

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Partners Stakeholders

• dti divisions (esp. EIDD, TISA, TEO, Marketing,
  CCRD)
• Govt. Clusters (IRPS, EE)
• NEDLAC Civil Society
• Parliament
• SACU and SADC
• Private sector (Industry Assocs., Chambers,
  Export Councils)
• NEPAD AU Secretariats
• Development agencies UN Bretton Woods
  Institutions