/ 3 October 2011

Gigaba pushing for more intra-African trade

South Africa's failure to integrate with other African countries is limiting its economic growth, says Public Enterprises Minister Malusi Gigaba.

South Africa’s failure to integrate with other African countries is limiting its economic growth, Public Enterprises Minister Malusi Gigaba said on Monday.

“By failing to foster high levels of economic cooperation and integration in Africa, we are effectively imposing limits on the growth of the South African economy,” Gigaba said in a lecture at the Solomon Mahlangu Freedom College in Mazimbu, Tanzania.

“The considerable priority that European governments have given to the building of an economic union suggests the importance of an analogous project in Africa.”

Infrastructure was a key enabler of trade and economic integration in Africa, but was severely lacking.

“An Africa infrastructure country diagnostic estimates annual investment needs in infrastructure in Africa at US$38-billion a year over the next 10 years, with two-thirds of this required from the energy sector,” Gigaba said.

“More recent studies suggest that water infrastructure requires US$10-billion per year, while energy requires US$42.6-billion per year over the next 10 years.”

South Africa, however, had to be realistic about what resources it had available to contribute to build Africa’s infrastructure.

“We have a significant infrastructure gap in South Africa that needs to be funded and while our development finance institutions can contribute to the African challenge, we clearly need to partner with players that have greater quantities of resources at their disposal.”

Gigaba called for international collaboration in tackling Africa’s infrastructure deficit and partnerships with established economies and the Brazil, Russia, India, China, South Africa group of economies.

He said Africa should stop being a global supplier of raw commodities and move to supplying value-added products.

This would help increase intra-African trade to at least the level of intra-Asian trade of 40% to 50% or, at best, intra-European Union trade of 80%, he said. — Sapa