Political leaders attending the 13th African Renaissance Conference in Durban on Thursday argued that increased infrastructural connectivity between African countries should be prioritised, as it would create an important platform for social, political and economic development on the continent.
At present, only about 10% of African trade was intracontinental, while the balance was with countries in Europe, Asia and the Americas.
South Africa’s Public Enterprises Minister Malusi Gigaba argued that yearly infrastructure investment of $38-billion would be required over the next ten years to deal with the current deficits and to create the basis for greater trade and investment within the continent and with trade partners.
The bulk of the flows would be required to bolster energy capacity, but large logistics-related investment was also key to unblocking the current constraints to intraregional trade and to stimulating new agricultural, mining and manufacturing activities.
“As a result of the lack of transport infrastructure, Africa has become a target in the global scramble for resources, but social and political integration must be lead by Africans themselves as those who are still keen on plundering the continent don’t have the will to help us solve our problems,” he said.
“However, without infrastructure, economic activity will be stifled.”
He pointed out that China had identified Africa as a target for increased investment, which had risen dramatically over the past decade. “But we must not be romantic because Chinese involvement in Africa is for its own benefit,” he said, arguing that South Africa needed to develop a strategy for engaging China in Africa…One of the problems facing the country was that financial institutions were not focusing on financing production. Also, too few of the investments in public procurements were stimulating industrial development.
“While trade with other Brics partners quadrupled between 2006 and 2010, this mainly involved primary products, an issue that the Industrial Policy Action Plan is seeking to address,” he said.
The country was currently making a number of amendments to its national procurement mechanisms and the New Preferential Procurement Act is due to be implemented on December 7, 2011. Davies said this would designate particular sectors for a range of procurement activities that would focus on local participation.
Government, he said, was working to introduce localisation into its new policies and to build in embedded suppliers.
Further, the Industrial Development Corporation had revised its business model and would disburse R102-billion over the next five years for investment into sectors that could support growth and new jobs…Read more.