Africa Day Celebrations
25 May 2006
Chairperson,
Ambassadors,
Distinguished delegates
I would like to extend a warm welcome to all of you who have gathered here on
this occasion of Africa Day Celebrations. While this is a day to celebrate the
African continent and its people in all its diversity, it is important not to
lose sight of the challenges and goals we have set for ourselves. I am inspired
to see that commitment reflected in the agenda for this afternoon, as
discussion will touch on very topical and important issues.
The decision to designate a special day in the calendar to celebrate Africa and
its achievements is a small but significant element that forms part of a
combination of initiatives towards a larger vision. It is an occasion for us to
focus on the positive, to focus on what we know we are capable of achieving. We
therefore celebrate Africaâs vibrancy, diversity and her abundance of resources
and people with rich history, culture and heritage. But to reach the bigger
goal of Africa and her peoples reaching their full potential, will require that
we implement and strengthen the wide range of measures aimed at continual
improvement in our social and economic environment.
Todayâs theme of an âAfrican Growth Trajectory" focusing on trade, investment
and economics, could therefore not have been better chosen. In emphasizing the
role of partnerships between governments, business and labour movements in
promoting growth and economic development on the continent, it seeks to promote
key steps we need to take at this critical juncture.
The seriousness attached to this challenge is underscored by a number of events
that have recently been held and a number of others that will take place that
specifically seek to address the issue of Africaâs economic development. For
instance this morning, I was privileged to open the Africa Export Week also
taking place at the Gallagher Estate. This Export Week, together with the
varied trade exhibitions that take place throughout Africa are in fact
practical manifestations of the various types of platforms that are a necessary
part of developing trade and investment relations and new business linkages.
(May I take this opportunity to strongly encourage you to attend the various
and absolutely stunning exhibitions and hope you will be equally
impressed).
Three weeks ago another very significant meeting was held in Kliptown, not
far from here and a place that is famous for being the site of the birth of the
Freedom Charter in 1956. The subject of the exercise was South Africaâs
submission to the African Peer Review Mechanism (APRM). As many of you already
know the APRM promotes and encourages the adoption of laws, policies and
practices that provide an enabling environment for political stability, higher
rates of economic growth, sustainable development and Continental economic
integration.
The APRM is unique and pioneering in that it encourages African countries to
analyse and assess their own progress and performance in important areas and
then to develop their own indigenous responses as they see appropriate. By
sharing experiences, identifying and promoting best practices as well as
undertaking practical interventions to build capacity, it provides us with an
opportunity to increasingly develop African solutions for African challenges,
within a democratic climate. African countries are also making more targeted
efforts to create an enabling environment for business activity. Furthermore,
NEPAD has defined good governance in holistic way through the adoption of codes
that have the potential to promote market efficiency, to control wasteful
spending, to consolidate democracy and to encourage private financial
flows.
These codes and standards cover good practice and transparency in monetary
and financial policies, fiscal transparency, best practice in budget
transparency, guidelines for public debt management, principles of corporate
governance, the adoption of international accounting and auditing standards and
core principles for effective banking supervision. All of these are critical
elements necessary for creating an environment in which trade and industry can
thrive. Business codes are being updated so that they are comparable to those
used by Asian countries that receive the bulk of foreign direct investment in
the developing world. To overcome the constraints inherent in small markets,
African countries are promoting regional integration and creating regional
markets. They are establishing banking and other institutions and protections
for property rights. They are trying to offer tax breaks and other incentives
that reward entrepreneurship and investment, without undermining the public
benefits of such investments. African stock exchanges are increasingly active
and well managed with recent studies showing that, even when adjusted for risk,
investments in Africa have yielded high returns.
African states are building a new architecture of institutions, such as the
African Union, and showing their determination to resolve long-standing
conflicts and new emergencies. Most African countries are at peace, and have
more democratically elected governments than ever before. Many are experiencing
rapid and economic and social recovery and are undertaking constitutional and
civil reforms. There are positive signs though those African countries are
taking concrete steps towards integrating their economies-building regional
communities, adopting common currencies and increasing trade with each other
enabling them to benefit from larger markets.
In this regard, one prominent legacy of Africaâs colonial history is the
predominance of small countries; 31 countries have a population of 10 million
or less, and most of these less than 5 million. Given the importance of market
size in attracting foreign direct investment (FDI), this is potentially
significant constraint on inflows to the region.
We cannot integrate with the global economy unless we increase market access
and trade within Africa. Integration will increase the market size and
potential for learning-by-doing, eventually making African firms more
competitive in the international arena.
Despite four decades of integration efforts, intra-Africa trade, an important
indicator of the intensity of regional integration, accounts for only 10,5% of
Africaâs total trade.
Ambassadors, ladies and gentlemen, I have described some of the many programmes
being undertaken by African governments to realise our vision for Africa. A
week from today the World Economic Forum will be held in Cape Town. The Forum
engages leaders in partnerships to shape global, regional and industry agendas.
This years World Economic Forum will focus on a number of topics, but of
particular interest to Africa will be the âYear of Africa in Reviewâ in terms
of assessing what Africa has delivered and strengthening partnerships to boost
African economic development.
Ladies and gentlemen, in confronting the challenges of African economic
development we must also ensure that development is sustainable. As we
celebrate the fact that, Africa is on a dynamic path of economic growth, we
must participate fully in processes that will assist our countries in
attracting trade and investment as well as increasing Africaâs global share of
exports. These relate to challenges involved in moving goods across borders,
the high costs of transport, inadequate infrastructure, the lack of financial
and human resources and a host of social factors that conspire to inhibit
growth.
Furthermore, Africaâs exports remain stubbornly in the agricultural products,
minerals and commodities basket. To succeed in expanding our global share of
exports not only is it necessary for to diversify exports but also to ensure
that can compete internationally. Simply put, we must find ways that can add
value to our natural resources so that we do not export them only to buy
finished products made from the same resources from the same countries we
exported to. Geography has bequeathed the continent an impressive endowment of
mineral wealth, including near global monopolies of platinum, chromium and
diamonds, a high proportion of the worldâs gold, cobalt and manganese reserves;
extensive reserves of bauxite, coal, uranium, copper and nickel. North Africa,
Nigeria and Gabon have long been major producers of oil, and more recently
Angola, Chad, Equatorial Guinea and Sudan have emerged, or re-emerged as
important suppliers.
In light of these riches, the diversification of our exports base through
beneficiation is a necessity rather than a ânice to haveâ if we are to move
away from our historical dependency on mineral extraction and commodity
production We will therefore need to find innovative and creative ways of
adding value to our exports that will meet the needs of global market demand.
To find and develop such innovation is far from impossible. Consider for
example this very real example here in Gauteng. A century ago Gauteng was a
small mining town entirely dependant on gold exports. Today, its diverse and
modern economy has grown to such an extent that manufacturing and services
rather than mining, is the mainstay of what has become the strongest economy in
South Africa.
In this challenge of diversification and growth, our own business sectors on
the continent must work together and network to take full advantage of the
comparative advantages of each African country and to ensure that we do not
undermine the interests of Africans. A multitude of opportunities exist where
African businesses can source products from African countries. It is in
Africaâs interests to grow the levels of trade between African countries. It is
equally important that African countries commit themselves and work together to
ensure that the current status quo of the international economic order is
altered in favour of African countries, taking into account their developmental
needs.
Ambassadors, it is therefore a concern that despite four decades of integration
efforts, intra-Africa trade accounts for approximately only 10,5% of Africaâs
total trade. Integration with the global economy will not take place unless
market access and trade within Africa is increased. A by-product of integration
is an increasing market-size, learning-by-doing, which in turn leads to greater
competitiveness. It will lead to greater cooperation on regional public goods
including transport and infrastructure. A problem is the proliferation of
regional economic communities. For instance, of sub-Saharan Africaâs 53
countries, 6 are members of one regional economic community, 6 belong to two
and 20 are members of at least three. In some cases, this is a recipe for
paralysis. Positive steps have, however, been taken. Some regional economic
communities have made significant strides to liberalize trade with their
neighbours, permit the free movement of people and build external
infrastructural links. Concrete steps towards integrating their economies,
building regional communities, adopting common currencies and increasing trade
with each other. The results of these efforts could be significant. Some
research results suggest that African crops targeted for export at the
international market generate an annual income of US$17 billion. Improving the
continents local and regional markets and financing the poor could on its own
generate US$ 50 billion in intra-continental trade annually.
We have seen increased levels of trade between African countries and also
greater co-operation between business entities on the continent. A direct
consequence of the increased co-operation has resulted in a growth in Africaâs
trade almost five times between 1994 and 2004. The potential and opportunities
for intra-Africa trade is vast.
The contribution of the private sector and the Small, Medium and Micro
Enterprises (SMMEs) to the growth of the economy in terms of output and job
creation is enormous. In this regard, there is a need to address the practical
and real concerns of entrepreneurs. This is essential to empowering the private
sector and to grow SMMEs. Women and youth are often neglected and the
contribution of these groups to development is often under estimated and under
valued. Concerted efforts are required to identify factors that prevent the
women and youth from accessing resources to assist them in developing their
businesses.
Ladies and gentlemen, we regard Africaâs destiny as being inextricably linked
to Africa and for this reason South Africa understands that it must develop in
partnership with African countries. It is through NEPAD, its aims and
objectives that we see greater levels of co-operation between governments of
African countries in areas such as transportation, telecommunications, and
trade and customs regulations. There are also a number of infrastructure
projects, which aim to facilitate greater and efficient movement of goods and
people across borders thereby reducing the costs of transactions.
The African continent has undergone remarkable changes and has made significant
strides in terms of development. Africa recorded a 4.6 percent growth in 2004,
the highest in almost a decade. This improvement over 4.3 percent in 2003 was
underpinned by a strong global recovery, higher commodity prices and higher oil
production and prices. Also contributing were good macroeconomic management,
better agricultural performance across the continent and improved political
situations in many countries.
In conclusion, we know that our economies are interdependent, and that
development is only sustainable if we cooperate for mutual benefit. We will
continue to promote outward investment on the continent with a focus on
developing infrastructure and productive capacity. We will offer whatever
institutional capacity we have to assist in strengthening the institutional
capacities of our neighbours. We undertake to make a comprehensive assessment
of options that collectively need to be considered in advancing intra-African
trade.
Go down to the Market Theatre this weekend to celebrate, as only Africans
can!
I thank you.
Issued by: Department of Trade and Industry
25 May 2006
M<EOD>
