Minister scolds small-time business

Jacoline Prinsloo

Minister of International Relations and Cooperation Maite Nkoana-Mashabane.

International Relations and Co-operation Minister Maite Nkoana-Mashabane lashed business leaders on Friday for focusing too much on the challenges of competing with the other members of the Brics and told them instead to seize the opportunity presented by South Africa’s membership of the emerging markets block.

The minister scrapped her speech and tore into the business representatives at a breakfast put on by Business Unity South Africa and the Black Business Council to discuss this month’s summit in Durban of the Brics, which comprises Brazil, Russia, India, China and since 2010, South Africa.

“I want us to spend more time, not listing challenges, but talking about how we can get the most out of Brics,” she scolded, adding that business should “not spend so much time talking about our smallness”. She said the time was past for assessing the virtues of being a member.

The minister appeared to be reacting primarily to Richard Vries of the engineering consultancy firm Gibb, who described the challenge that construction firms faced in competing with South Africa’s giant Bric partners for infrastructure contracts in Africa.

The theme of the Brics summit is Brics and Africa: Partnership for Development, Integration and Industrialisation, and President Jacob Zuma has invited several African leaders to the summit for a special outreach session with the Brics leaders to discuss how they can boost Africa’s development.

Some analysts have warned that by joining the Brics and facilitating their entry into Africa, South Africa is creating competition for itself in one of its most promising markets.

Vries pointed out that the other Brics construction companies that local companies were competing with, like the Brazil’s Oudebrecht, had turnover of $37 billion (R341bn) in 2012 – larger than that of all of South Africa’s major construction companies combined.

Vries said China’s total infrastructure spend last year was $1.24 trillion, Brazil’s was $160bn, India’s $150bn, Russia’s $100bn and South Africa’s $30bn. “This raises the question of whether we can compete,” Vries said.

He recommended ways of improving the competitiveness of local construction companies including increased government funding for project preparation and a strong focus on the localisation aspects of future large-scale projects.

Nkoana-Mashabane’s response was that South Africa stood at a crossroads, that change was painful, and that if local business did not “get out of its comfort zone” and seize the opportunity presented by Brics, South Africa would slip down the rankings of the largest economies in the world.

“But if we change our mindset, we shall be counted among the 10 largest economies in the world,” she said.