Johannesburg – Finance Minister Malusi Gigaba says
state-owned companies and other entities should be building relationships in
Africa.
Speaking at the Black Business Council Breakfast
Roundtable on Wednesday morning, ahead of the World Weconomic Forum’s Africa
meeting, Gigaba noted government is “enormously excited about the developmental
possibilities of KwaZulu-Natal as a logistics and industrial hub, connecting
South Africa with Southern Africa and Africa, and Africa with the world”.
Gigaba adds it is government’s responsibility to put
enabling infrastructure in place, so that the private sector can have the basic
services, electricity and transport networks to produce and transport world
class goods and services.
He notes the National Development Plan provides a
long-term vision for the structure of the economy, investment in capacity
through infrastructure and further emphasises the importance of regional
economic integration amongst others.
“From a continental perspective poor infrastructure
continues to undermine intracontinental trade. While Africa’s infrastructure
backlog is estimated at around $100 billion per year, regrettably, available
financing covers only half of this.”
This, says Gigaba – along with exploitation – means African
roads and railways were mainly designed and built to facilitate transportation
of raw minerals and resources to markets outside the continent. “We need
infrastructure which supports industrialisation, the beneficiation of minerals
and the delivery of basic services to our people. We need social infrastructure
to support a globally competitive education system, such as schools,
universities and housing for students.”
Read also: #WEF: An African economy that benefits all
Gigaba adds the consequences of poor infrastructure have
been devastating; intra-African trade is shockingly low at about 11 percent
whereas intra-Asian and North American trade is both 40 percent.
In contrast, intra-continental trade in Europe sits at 60
percent, thus mobilising capital to build economic infrastructure.
“Unlocking industrial activity, intraAfrica trade, and
growing Africa’s share of global trade, is crucial for Africa’s development,”
Gigaba says.
Gigaba says Africa needs to mobilise its savings and
capital markets to invest as well as well structured projects that are bankable
and policy and regulatory regimes which attract investment.
“Our state owned companies need to build relations on the
continent, as there are many projects which they can co-deliver with our
African partners, rather than these being delivered by foreign companies.”
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