By More Matshediso
Pretoria - Economic growth in sub-Saharan Africa is expected to exceed 6% by the end of 2014, with Africa’s share of global foreign investment rising, says Finance Minister Nhlanhla Nene.
He said in 2013, the rest of Africa accounted for over 15% of South Africa’s dividend receipts and over 20% of the country’s exports.
“Indeed, the narrowing of the current account deficit is due, in part, to the strong growth in dividends that our dynamic companies are receiving from their investments around the world, but particularly Africa,” said Minister Nene, on Friday, during a lecture at Fort Hare University, in the Eastern Cape.
Moreover, the Minister said South Africa was a favoured hub for international companies that desired to expand into Africa.
“Growth has been pronounced in dynamic sectors with high growth potential, including technology, telecommunications, financial services and retail [in South Africa],” Minister Nene said.
He said government committed to support the expansion of South African firms into the rest of Africa, which will be mutually beneficial and bolster long-term growth prospects on the continent.
“It will provide tax revenue, profits and dividends into the receiving country and to South Africa,” he said.
He said SA provided a number of natural advantages as an African hub, including advanced financial, regulatory, tax and accounting standards, a modern telecommunications network, extensive economic infrastructure and direct air connections to most major cities on the continent and abroad.
The Minister said, over the past two decades, South Africa’s economic prosperity has become increasingly intertwined with that of the rest of the continent.
He added that SA remained far ahead in terms of per capita Gross Domestic Product (GDP), given the relative population size, while the economy of Nigeria grew larger than that of SA.
“Their success is fantastic for us – it brings new trade opportunities for our firms, opens up new markets and contributes to the growth of the African economy,” said Minister Nene.
Investment climate
To continue to attract big firms to the country, “we must take clear steps to improve the investment climate” the minister said.
He said the National Development Plan (NDP) sets out a clear vision, comprising:
- Modernising the SA approach to tax policy
- Creating more competition in our markets for goods and services
- Bringing policy certainty and investor protection.
“South Africa must stay ahead. We must work harder and smarter. We cannot rely on the star companies of yesterday if we want to win tomorrow.
“Our compatriots in Africa have raised their game. They are implementing economic reforms, building infrastructure, educating their people, and building winning nations,” he said. - SAnews.gov.za
