the New Partnership for Africa's Development (Nepad) Projects conference
8 October 2007
Honourable Ministers and Deputy Ministers
Excellencies, Ambassadors
Leaders of organised Business, Labour and civil society
Distinguished guests
Ladies and gentlemen
Great Wisdom emanates from Africa. Such as this African Proverb, it says:
"For tomorrow belongs to people who prepare for it today."
It was thus wise for the Department of Foreign Affairs, the New Partnership
for Africa's Development (Nepad) Business Foundation and the Department of
Trade and Industry (dti), to organise today's event. For us to claim tomorrow,
I must also thank all of you for your wisdom shown in attending.
As we begin let us remind ourselves of the essential elements of Nepad? In
its simplest terms, the Nepad is an indigenous, long-term, continental and
internationally recognised socio-economic development programme for the
continent. It has as its core, economic renewal and as key objectives, poverty
eradication, and development of the African continent, integration of the
African continent into the global economy and the acceleration of the
empowerment of women.
I do not believe that anyone could argue that this vision encapsulates what
Africa needs. However, in his booklet, 'the Journey so Far' Professor Nkhulu
cautioned us in 2005, that Nepad is a major transformation process, and history
shows that similar processes took decades or even generations in other parts of
the world. But indeed it is a process that cannot be allowed to falter and for
which we do not have the indulgence of centuries to perfect. It is therefore
exciting to learn that over the over the past four years the work on this great
task continues unabated. Already we can point to new work in agriculture,
infrastructure, science and technology, the environment, health, education,
tourism and the work of the African Peer Review Mechanism.
The challenge is to stay the course
It also is a task that takes place in the midst of exciting times for
Africa. Our continent is experiencing an unprecedented growth curve as shown by
the most recent Economic Report on Africa, published by the United Nations
Economic Commission for Africa in February 2007. The report provides evidence
that African economies continue to sustain the growth momentum of previous
years, recording an overall real GDP growth rate of 5,7% in 2006 compared to
5,3% in 2005 and 5,2% in 2004. The report bases Africa's growth performance in
2006, as in previous years, on the improvement in macroeconomic management in
many countries, and strong global demand for key African export commodities,
sustaining high export prices, especially for crude oil, metals and minerals.
It must also be attributed to the fact that many governments are addressing the
critical questions such as investment in infrastructure, the promotion of a
stable investment and business environment as well as private sector
development.
The challenge is to broaden and deepen the scope of our economies
What we also know is that Africa's share of global trade is currently small
in relation to its importance as a resource provider for the overall growth of
the world economy. But through development and improving the pace of regional
integration the levels of intra-Africa trade are certain to grow. Which in turn
will create significant opportunities for African exports via FDI and expansion
of productive capacity therefore the development of domestic markets is a
priority as many of our economies are small.
The challenge is to speed up integration
It is therefore critical that Africa's business sectors work together to
optimise the comparative advantages of each country and thus promote the
interests of Africans. The reality is that a multitude of opportunities exist
where African businesses can source products from African countries. Therefore
we have already seen increased levels of trade between African countries and
also greater co-operation between business entities on the continent. And it
has had a dramatic impact. For instance, a direct consequence of the increased
co-operation has resulted in a growth in Africa's trade of almost five times
between 1994 and 2004. Clearly, the potential and opportunities for
intra-Africa trade are vast and even more so once the regional integration
processes mature as an integrated market will reduce transaction costs and
facilitate the efficient movement of goods and services across borders.
The opportunity for intra-African trade and business linkages
Ladies and gentlemen, it is also true that Foreign Direct Investment (FDI)
investment in Africa is at its highest level ever. But we also know that as
long as the current growth curve is based largely on the export of commodities,
this growth cannot be sustained in the long-term. Africa's industries therefore
require development to expand beyond extraction into value-addition and
beneficiation.
The challenge and opportunity to industrialise
The Nepad framework is critical if we are to achieve this structural change
in our economies. But, we are well aware of the dangers of preaching to your
neighbours, what you do not practice at home. So, a number of national
consultative workshops on the implementation of Nepad in South Africa have been
held since 2005. The first event was held in Port Elizabeth during December
2005 and the second in Sandton during April 2006. Some critical milestones have
been reached as a result of this work. Key amongst this has been the drafting
of criteria for defining a Nepad project and the development of a Nepad
Implementation Strategy for South Africa. This strategy serves as a framework
for South Africa's engagement with the Nepad process and guides as well as
defines the role of all stakeholders.
South Africa inc. has needed to have its own engagement on Nepad with regard
to our role and response given our own challenges, position / capacities and
expected contribution. This being a Nepad projects conference we shall have to
grapple with what a Nepad project is. In my view this has to be answered in the
context of the understanding that regional economies have to be the building
blocks for Nepad. For our region, we need to move beyond the Regional
Indicative Strategic Development Plan (RISDP) to concrete infrastructure
projects of regional scope and scale. Rail/Energy/Roads.
We can also proceed with confidence because Nepad, since its inception in
2001, has registered many successes. Little more than a week ago, South Africa
hosted the Conference of African Ministers of Industry. The conference was a
gathering of African industrial experts to discuss the elements of an
industrial framework to develop Africa's industrial base with a long term view
of developing Africa's productive and trading capacity. Much work was done,
amongst which the agreement was reached to establish a continental industrial
policy framework within the context of the developments taking place within the
regional economic communities.
Simultaneously, The African Peer Review Mechanism (APRM) has already proven
to be most useful. It is a voluntary self-monitoring and self-assessment tool
allowing, through peer learning, for all of us to achieve best practice.
The programme covers the four thematic areas of:
* democracy and good political governance
* economic governance and management
* corporate governance
* socio-economic governance
The process of country assessment using these thematic areas has as its
objective the creation of an environment for growth and development. In the
areas of corporate and economic governance, the establishment of a predictable
legislative environment is fundamental to attract and ensure that business is
able to thrive. Minister Fraser-Moleketi, who has led the process in South
Africa is here today and will provide more details later.
Another important initiative focusing on good governance is the
Collaborative Africa Budget Reform Initiative (Cabri) which promotes the
importance of effective management of public finances to foster economic growth
and to promote accountability.
Ladies and gentlemen, these are very important enabling mechanisms for
business. But I, think the business representatives here today, whilst
hopefully agreeing with this assessment, will also, undoubtedly be saying: show
me the bottom line, the results. Well, there is something to show, consider in
relation to our regional examples of success.
On infrastructure, we have the Spatial Development Initiatives (SDI's) such
as the Maputo Development Corridor. The positive policy environment created by
the South Africa and Mozambique governments and a few high profile investments
had an immediate and, subsequently, enormous economic development impact â and
that virtuous cycle continues to strengthen the investment profiles and the
economies of the South African Mpumalanga province and of Mozambique - and to
improve the future prospects of the individuals who reside there.
The Mozal aluminium smelter is also often cited as an example of the
catalytic impact of a public private partnership. Mozal was considered a risky
project when it began in 1992 as a result of the civil war. Today however,
Mozal accounts for 48% of total manufacturing output and contributes 3,3% of
Mozambique's Gross Domestic Product (GDP). Mozambique grew at an average rate
of 10% during the 1990s and growth rates continue to be impressive.
In recognition of the need for infrastructure development the Pan Africa
Infrastructure Fund was recently launched. The fund is worth $625 million
dollars and will be used to develop infrastructure on the continent. The need
for infrastructure is crucial to the regional integration process and
increasing levels of intra-Africa trade.
I conclude by reminding ourselves that 'tomorrow belongs to people who
prepare for it today.'
Yes, we must continue to prepare. We are enthused by the fact that Nepad has
registered numerous successes in various sectors. We are motivated by these
massive developments taking place throughout our continent. And it is our
responsibility to ensure that a virtuous cycle is created through the
development of infrastructure and the creation of integrated markets which in
turn will guarantee that the flow of goods is facilitated, the cost of
production is brought down and international competitiveness improves. However,
the pace of regional integration is still a source of concern and we need to
address this if we are to accelerate Nepad implementation.
To reach this point, requires from all of us commitment and willingness to
stay the course. Where-ever we find ourselves, in business, labour or
government, one of the greatest opportunities to make a difference, anyone can
expect in their life-time, awaits us.
Thank you.
Issued by: Department of Trade and Industry
8 September 2007
Source: Department of Trade and Industry (http://www.dti.gov.za)
