Africa has great investment potential, Zuma tells Brics forum

Africa has great investment potential, Zuma tells Brics forumTrade between the emerging markets Brazil, Russia, India and South Africa (BRICS) has increased but has been highly inequitable, President Jacob Zuma told the Brics Business Forum on Sunday.

Zuma and eight cabinet ministers travelled to the Xiamen, China to attend the 9th BRICS Summit in Xiamen. The forum, a side event, was held on the eve of the summit.

He called on the Brics’ partners to collaborate with South Africa to decrease the reliance on raw material exports. “Exports have been driven particularly by raw materials. This dominance …has adversely impacted South Africa.”

He warned that although the country was endowed with natural resources, it was critical that beneficiation programmes were put in place that support the country’s industrialisation policy.

This included investing in supply and development programmes in Africa, skills development and technology transfer and also engaging in projects that would support inclusive development and equal partnerships.

South Africa’s trade with its Brics counterparts has increased from US$15 billion in 2010 to US$31.2 billion in 2016.

He said: “Given the history of institutionalised racism in South Africa, we continue to work hard to reverse the impact on the economy.” South Africa has thus set for itself a plan of action towards the attainment of radical socio-economic transformation.

“He said this meant business partnerships would be expected to include, more than before, participants from the black majority, who had been excluded in the ownership, management and control of the economy during the apartheid era.

Zuma said South Africa offered many opportunities in many areas, as the government sought to reignite economic growth.

“There is an increased focus on industrialisation, mining and beneficiation, agriculture and agro-processing, energy, small, medium as well as micro enterprises (SMMEs), attracting investments, growing the oceans economy and tourism.”

He said in addition to this,cross-cutting areas such as science and technology, water and sanitation, infrastructure, transport infrastructure and broadband roll-out have also been prioritised.

“We also have a specific programme focusing on the development of black industrialists. This initiative aims to expand the industrial base of the country and grow the economy through bringing in the majority to productive sectors such as manufacturing.”

Zuma also focused on Africa’s great potential.

Despite the recent challenges, Africa’s household consumption and business spending were both growing strongly, offering companies a 5.6 trillion US dollars opportunity by 2025 according to the latest Mckinsey Report.

Africa’s manufacturing sector does not compare favourably with those of other emerging economies. However, Mckinsey predicts that output could expand to nearly one trillion US dollars in 2025 if Africa’s manufacturers were to produce more to meet domestic demand from consumers and businesses, and work with governments to address factors hindering their ability to produce and export goods. Zuma said these statistics cannot be ignored.

“Africa is thus the current frontier for growth and prosperity and the opportunities from an investment perspective are limitless.”

BRICS business community were important partners. But this year’s session was set against the backdrop of challenges as a result of the downturn in the global economy.

The president said the primary goals for South Africa in the Brics context included development and inclusive economic growth. South Africa wanted to promote value-added trade among Brics countries and also promote investment into productive sectors.

“These goals would enable us to facilitate greater trade, investment and industrialisation which is a key part of addressing common challenges facing us including unemployment, inequality and poverty.”

The South African delegation included Minister of International Relations and Cooperation Maite Nkoana-Mashabane,Minister of Finance Malusi Gigaba, Minister of State Security David Mahlobo, Minister of Small Business Development Lindiwe Zulu, Minister of Energy Mmamoloko

Kubayi, Minister of Water and Sanitation Nomvula Mokonyane, Minister of Cooperative Governance and Traditional Affairs Des Van Rooyen, and the Deputy Minister of Trade and Industry, Gratitude Magwanishe.