Friday, July 2, 2010

Africa's integration 'will boost SA'

Political and business leaders agreed yesterday that the regional integration of Africa was vitally necessary if South African companies were to expand their markets and take advantage of the vast opportunities available on the continent.

Africa as “the new global opportunity” was the focus of the three-day Fortune-Time-CNN Global Forum, which gathered the top executives of the world’s leading multinational companies to discuss business trends, challenges and new opportunities. Their activities in the developed world have been badly affected by the global financial crisis and the executives are looking to Africa as one of the new frontiers of economic growth.

South African companies too needed to expand into Africa, which was an obvious, natural export market for them, but Business Leadership SA CEO Michael Spicer said during one of the forum’s panel discussions that this would not be possible unless there was greater regional integration.

Rules and standards had to be harmonised and the host of bureaucratic and logistical obstacles that got in the way of robust trade had to be removed. There was too much fragmentation in Africa.

SA’s market of 50-million people was small in international terms and had to incorporate the rest of Africa, Mr Spicer said.

There were things that could easily be done and he welcomed the strong political will to foster integration which Trade and Industry Minister Rob Davies had displayed.

BMW SA MD Bodo Donauer agreed the opening up of sub- Saharan Africa to South African exports would create large export markets but at the moment this was hampered by the lack of adequate logistical infrastructure.

Investec Asset Management CEO Hendrik du Toit also highlighted the difficulties of investing funds in Africa. Creating four effective regions with clear rules and entry points and the development of local capital markets was essential. There were projects on the continent but investors could not access them.

Mr Davies emphasised regional integration throughout the conference, saying talks were under way with the Economic Community for West African States (Ecowas) and the Common Market for Eastern and Southern Africa (Comesa).

The construction of a north-south corridor road and rail project from the Democratic Republic of Congo to Durban, traversing Tanzania and Zambia, was also under way.

In a discussion on food security, former president FW de Klerk said there were great opportunities to expand inter-regional trade in Africa, which represented a fraction of the continent’s total trade.