SADC needs a strong Free Trade Area to industrialise

Tuesday, August 1, 2017

Regional industrialisation requires a strong Southern African Development Community (SADC) Free Trade Area (FTA), says the Department of International Relations and Cooperation.

Addressing the SADC Industrialisation Week currently taking place at the Focus Rooms in Sunninghill, Johannesburg, Director-General of the Department of International Relations and Cooperation (Dirco), Kgabo Mahoai, said the FTA will facilitate increased export diversification, greater competitiveness, more inclusive growth and increased movement of goods and services. 

Speaking on behalf of Dirco Minister Maite Nkoana-Mashabane, Mahoai said the FTA will not only facilitate increased export diversification but that it would also help create the economies of scale to facilitate new industrial capabilities to take advantage of a large integrated market. 

“The global economy is unfortunately characterised by serious push backs on globalisation and trade agreements. This has resulted in an increase in protectionism, with our small economies by global standards as SADC, we should therefore put more focus on improving efficiencies in the regional market and to promote regional integration,” said Mohoai on Monday.

The Director-General further added that it is paramount for the continent to provide an attractive business environment for industrial growth and more opportunities for the traders.

In addition, the SADC Regional Industrialisation Strategy and Roadmap can only be taken forward and implemented with the support of the region’s private sector.

He emphasised that the expertise and financial resources lies with the private sector, and were the ones who would ultimately take the investment decisions that are required.  

The SADC Industrialisation Strategy and Roadmap 2015-2023 was developed as an inclusive, long term modernisation scheme which will result in major economic and technological transformation of the region. The Strategy and Roadmap sets out three potential growth paths, namely agro-processing, mineral beneficiation and downstream processing value chains.

The Director-General further appealed to the business sector to work with government to create new opportunities for cross border manufacturing under the SADC Industrialisation Strategy.

He added that growing the economy of the region is an investment in the future stability and socio-economic progress to the benefit of citizens.

Industrialisation to raise standard of living

Also speaking at the start of the Industrialisation Week, SADC Acting Director of Industrial Development and Trade Dr Lomkhosi Mkhonta-Gama said industrialisation will raise the living standards of people of the SADC region.

“With industrialisation, we will raise the living standards of the people of the region, we will structurally transform the region and catapult our member states to be at par with other industrialising and developed countries,” said Mkhonta-Gama.

She added that the first Industrialisation Week, which took place in Swaziland in August 2016, produced the Esibayeni Declaration. The declaration emphasised the fact that policy certainty including stability, predictability, consistency and transparency was key for attracting investment for regional industrialisation, regardless of sector or scale.

It also stressed that enabling trade through the removal of non-tariff barriers, coordinated border management and a solid regional transit system was a prerequisite for industrialisation in all sectors.

“Essentially, the declaration calls for specific actions on how to develop infrastructure required to catalyse industrialisation, and to develop corridors in addressing issues relating to trade facilitation, non-tariff barriers and movement of skills and innovation,” she said.

The Acting Director of Industrial Development and Trade further added that the declaration also identifies sector specific proposals dealing with the pharmaceutical sector, agro-processing, mineral beneficiation and development of regional value chains.

“It also calls for the involvement of the private sector in the development of key regional plans and policy documents,” said Mkhonta-Gama.

Industrialisation Week, which is being held under the theme: “Partnering with the Private Sector in Developing Industry and Regional Value Chains,” will conclude on Friday. –

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