Pretoria - There is growing recognition that Africa is the next growth frontier but should be characterised by the industrialisation of the continent, Trade and Industry Minister Rob Davies said on Wednesday.
“There’s a growing and significant recognition that Africa’s time has come, that Africa is part of the new growth frontier. The African continent has performed relatively well during the crisis but more significantly the African continent is positioning itself to make some very important decisions which we believe will lead the continent to a new phase of growth and development,” said Davies.
Speaking at the second South Africa (SA)-European Union (EU) Business Forum on Wednesday, Davies said the next phase of the continent’s development has to be characterised by industrialisation.
“We can no longer afford to locate ourselves in the global value chains as producers and exporters of raw materials and importers of finished products,” he said, adding that the continent should be producers of value added products.
Economic Partnership Agreement
The minister spoke of the negotiations of the Economic Partnership Agreement (EPA). The negotiations form the EPA between the EU and the African, Caribbean and Pacific (ACP) Group of States.
“We are saying that we need to address issues of real economy co-operation,” he said, adding that the United Nations Conference on Trade and Development (UNCTAD)report on African trade pointed out to a need to put in place infrastructure that is necessary to connect African economies with each other.
“Africa is poised to industrialise, the industrialisation requires regional integration and to address the infrastructure constraints,” the minister told delegates at the forum.
There had been increasing interest in the African continent from a number of existing as well as new potential trade and investment partners.
EU is SA’s largest trading partner
Davies said that the EU remains South Africa’s largest trading partner which was also true to a large extent to the rest of the continent as a whole. South Africa, he said, was seeing an increase in investment from companies that operate in the financial sector for example.
“We continue as SA to support, encourage, welcome, work actively with potential investors,” said the minister.
Speaking at the forum, European Commissioner for Trade Karel De Gucht said the forum was important and that the EU remains a strong investment destination which still receives the highest share of Foreign Direct Investment (FDI) in the world year on year.
South African companies, such as Steinhoff (in the furniture retailing sector) and Aspen (in the pharmaceutical sector) have been active on the EU market.
Trade relations between SA, EU
Speaking on the trade relationship between SA and the EU, De Gucht said that the Trade, Development, and Cooperation Agreement (TDCA) has been a success.
“Trade between the EU and South Africa has increased steadily since 2000 – from €26 billion to €46 billion today. What is maybe more important is that trade has been diverse and has continued to diversify further as new business opportunities were created,” he said.
“You are aware that we are now negotiating a region-wide EPA. South Africa has openly said that it wishes to benefit from these negotiations by increasing market access to the EU.
“Under the TDCA we liberalised many more lines than South Africa. South Africa has also had a steady surplus in trade in agricultural goods.
“”And yet, we have again agreed to asymmetric market opening in the current EPA negotiations. We are willing to give South Africa more agricultural market access than what we will be asking for,” he explained.
In terms of the TDCA, the country has duty-free access to the European market for about 65% of its agricultural products and in return for that; the country receives more than 90% (from the EU).
The EU is the biggest investor in South Africa. EU countries are the source of 88% of foreign direct investment stock in South Africa.
The business forum comes ahead of the SA-EU Summit tomorrow to be addressed by President Jacob Zuma. - SAnews.gov.za
