SA-Angola must diversify their economies

Friday, November 24, 2017

President Jacob Zuma has urged South Africa and Angola to diversify their economies and challenged the two to lead industrialisation efforts on the continent. 

While Angola is an oil rich country and South Africa is renowned for its minerals, there is an impending need for the two to wean themselves off the reliance on revenues earned only from the extractive industries.

“We have an opportunity to intensify industrialisation through agriculture and agro-processing, particularly in meeting the nutritional needs of our burgeoning populations through food production and building sustainable agri-businesses,” said President Zuma.

The President was addressing the South Africa-Angola Business Forum held at the CSIR International Convention Centre in Tshwane on Friday. The engagement was preceded by the Angolan President João Manuel Gonçalves Lourenço’s state visit to South Africa.

For beneficiation to take place, the two countries recognised that they must provide conducive environments in their countries. 

Steps have been taken in this regard, chief among them, the visa waiver between the two countries. 

As of 1st December 2017, ordinary passport holders between these two countries traveling for a period of 30 days and less can travel without a visa. 

The two governments assured the private sector that they were ready to support its targeted efforts to increase the levels of investment which currently stands at R8-billion.

Cooperation in energy

With energy highlighted as a key sector for the industrialisation and manufacturing ambitions of the two economies, President Zuma urged South African companies to grab the opportunity with both hands. The Angolan government’s aim to reach national electrification levels of 60% by 2025 was marked as a potential starting point for keen investors.

“I would encourage the South African companies present here to consider maintenance, service and investment partnerships in the power generation, power transmission as well as pre-paid metering opportunities that are on offer from Angola.”

Angola plans to reach its electrification target through an energy mix comprising hydropower, natural gas and fossil fuels.

Forestry a gold mine

Forestry was also identified as a gold mine that has the potential to diversify the economies to avoid over reliance on one sector. Africa’s commercial forestry industry is worth approximately 39 billion US dollars. With this in mind, forestry offers an attractive alternative in agri-business investment.

Currently, Angola is one of South Africa’s major trading partners on the continent. In 2016, South African exports to Angola stood at R8.2 billion and imports from Angola amounted to R18 billion, largely consisting of crude oil.

Although there are a number of South African companies involved in Angola in a variety of sectors including construction, mining, housing, retail, food and beverages, hotels and leisure, banking and medical services (rescue), the two Presidents have identified untapped sectors.

These include opportunities in agriculture, mining, infrastructure development, energy and tourism, which need to be explored to grow trade.

The two governments assured the business sector that they are deliberating on reducing transaction costs and safeguarding citizens’ investment. -

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