Raising interest in Davos
Speaking in a Google Hangout from the World Economic Forum in Davos in January, Minister of Trade and Industry Rob Davies said the African issues have shifted from being a “fringe” activity at the gathering a few years ago, to matters now occupying central attention.
“If we look at the fragile recovery in the world economy, the figures released by the IMF recently pointed to growth of just over 1% in the European Union, and single digit growth in China.
“In contrast, Africa is predicted to raise its growth rate from 5.1% to 6.1%. In that context, a number of companies recognise that South Africa has a strategic presence in Africa, and that Africa is a continent whose future is one of huge new opportunities.”
There were challenges and problems in various sectors, he said, with some of them relating to labour in primary production sectors like mining.
“What we don’t sufficiently take into account sometimes is the context. The mineral product super-cycle passed its peak, prices have declined and mining economies around the world and countries that have specialised in the production and export of primary products are facing a decline in revenues.”
“Our message is that the future of African growth lies in value addition and industrialisation.
“That will be underpinned and supported by infrastructure development.”
Davies said South Africa’s growth rate is below what it needs to be.
“But it’s not just a question of the quantitative measure of the growth, but also a quality nature of the growth and what is going to move the growth further forward.
“What we are confronting is that we were exporting and receiving premium prices for our primary products.
“What has happened is that the prices of those products have declined.
“What we have to find is a new growth path, one that is going to be focused on much more value addition to our mineral products. We are going to have to develop all the skills, we are going to have to make structural transformations in our economy to place us on a higher growth plane.
“We need to make structural changes as envisaged in the new growth path and the national development plan, and the industrial policy action plan. We need to raise our game in all of those. The infrastructure programme has shown that we can make very significant progress in these.
“We will have spent in the life of this administration one trillion rand on infrastructure, compared to less than half of that in the next highest term of government.
“So we are on a track, but it’s a track which will take time, require us to make structural changes and to bring all players aboard around a narrative of growth and development in the South African economy.”
This article forms part of a supplement paid for by KPMG. Contents and photographs were sourced through and signed off by KPMG