Trade and investment from South Africa is crucial to the development of the rest of the African continent, according to a study released on Tuesday.
The publication of the Danish-funded study, compiled by researcher Dianna Games for the SA Institute of International Affairs, comes ahead of this week’s World Economic Forum Africa Summit in Durban.
She said initiatives such as the United States’ African Growth and Opportunities Act and preferential trading relationships with the US and Europe were likely to consolidate South Africa’s position as a leading recipient of foreign direct investment (FDI) in sub-Saharan Africa.
This had raised concerns about an even greater concentration of power in South Africa. However the fact that South Africa was also a leading source of FDI to other African countries meant the benefits of a stronger and wealthier South Africa were likely to outweigh the potential costs.
She said a strong private sector was key to Africa’s upliftment.
”Wealth creation and a rising middle class are deterrents to conflicts, and overall economic growth is the only way to begin the serious eradication of poverty.”
The private sector could be strengthened as an engine of growth through greater use of public-private partnerships, privatisation of utilities that linked the interests of the private and public sectors, and the creation of strong organised business to make inputs on government policy.
Business could also press for stronger regionalism, which would create interlocking economic interests across borders that reduced the potential for conflict.
The South African private sector was already creating regional links but was hampered by a lack of will among politicians to follow suit. – Sapa