Trade with Africa can underpin SA’s growth, says Sihle Zikalala
Trade among African countries is up 42% since 2007, and the proportion of SA’s outbound investment that goes to the continent has quadrupled — but obstacles remain
For the economy to grow‚ SA needs to concentrate on growing exports.
Sihle Zikalala‚ KwaZulu-Natal’s MEC for economic development‚ tourism and environmental affairs‚ told delegates at Trade and Investment KwaZulu-Natal’s Export Week at Durban’s ICC on Monday that it was ideal for a country to have a positive trade balance.
Export Week, which is in its sixth year‚ is intended to recognise‚ promote and assist with growing export opportunities in the province.
KwaZulu-Natal is SA’s second-largest economy, behind Gauteng, contributing on average 16% to the country’s gross domestic product (GDP).
The province is strategically positioned by being home to two of Africa’s busiest and largest ports‚ Durban and Richards Bay.
Zikalala said Africa’s future hinged on intra-African trade and investment, which has expanded by 42% since 2007‚ led primarily by Kenya‚ Nigeria and SA.
"While in the late 1990s only 5% of the country’s outbound investment was directed towards Africa‚ that figure increased to 20% by 2008 and there are at least 80 JSE-listed companies operating in Africa.
"Deepening regional integration is a key platform of SA’s trade regime as it offers substantial opportunities for the country‚" said Zikalala.
He said intra-African trade was between a few economic powerhouses on the continent.
"In order for there to be more intra-African trade‚ a few prerequisites have to be met. These include the elimination of the nontariff barriers among African countries‚ reduction in transport costs‚ minimal delays at border control posts and the reduction of red tape that heightens the cost of doing business in Africa."
He said that in the past year SA shipped $74.1bn worth of goods around the globe‚ a 37.6% increase since 2009.
"South African exports are still dominated by minerals‚ particularly platinum and gold. Other important minerals include coal‚ iron ore‚ diamonds and manganese.
"This means that the economy is very vulnerable to changes in demand and prices in the international commodity markets."