DURBAN – The province of KwaZulu-Natal is aspiring to act as a gateway between global and regional markets and production facilities, Premier Sihle Zikalala told an import/export conference on Monday.
“This vision entails the need to improve operational efficiency at our ports and the general logistics value chain in the province. Immense investment opportunities exist in tourism, maritime, industrial economic hubs, and the aerotropolis,” said Zikalala.
He was speaking at the 2019 Afreximbank Trade Finance Seminar and Workshops, being held at Durban’s Inkosi Albert Luthuli International Convention Centre from 4 to 7 November.
The Cairo-based export-import bank is using the event -- in its 20th year -- to target “measurable transformative innovation” to address Africa’s $1.6 trillion international trade finance gap.
It will further use the seminar to advance its commitment to achieving a $4 billion intra-African trade portfolio by 2021.
Established in 1993, Afreximbank says it seeks to become ‘The Trade Finance Bank for Africa’ and to stimulate the expansion and development of African trade.
Earlier this year, South Africa along with about 28 other countries signed a free-trade agreement -- African Continental Free Trade Area (AfCFTA) -- with a combined GDP value of $2.5 trillion.
Zikalala said the continent’s partnership with Afreximbank “gives us confidence that we remain poised to harness the continent’s competitive advantages embodied in its people, history, cultures, natural resources as well as geo-political position to effect equitable people-centred growth and development”, in line with the African Union’s Agenda 2063.
Agenda 2063 is Africa's framework for the socio-economic transformation of the continent over the next five decades.
“Through such a partner, our continent is set to grow and accelerate the financing of projects and programmes aimed at eradicating poverty, developing human capital, social assets, infrastructure and public goods.”
Zikalala said that taking AfCFTA into account, financial institutions like Afreximbank played a “crucial role” in providing bespoke funding programmes to exporters.
“KwaZulu-Natal has identified export development as a key pillar to grow the economy and create employment. We are investing, for instance, in agriculture and agro-processing to ensure that there is value addition and commercialisation for export.”
The province was looking to create no less than 10,000 jobs between 2019 and 2024 via intensive export promotion, said Zikalala.
KwaZulu-Natal was also in support of the African Free Areas initiative, which aims to increase intra-Africa trade.
“The African free trade area presents any African company, no matter its location, with a market of about 1.2 billion people within the African continent before even looking at other international markets,” said Zikalala.
“In 2016, South Africa’s exports to the African market were valued at R315.2 billion whilst the country imported goods valued at R112.8 billion,"
said Zikalala.
“On the other hand, KwaZulu-Natal’s exports to Africa in 2016 were R37.74 billion whilst imports were valued at R5.68 billion. Our aim is to grow these numbers as we capitalise the immense opportunities bequeathed upon us by these trade agreements.”
KwaZulu-Natal’s special economic zones and industrial hubs had “high export propensity”, he said, and it was clear that the most successful world economies were those that were able to diversify their export basket.
China’s export to GDP ratio is 39.9 percent, Germany’s ratio is about 50 percent, compared to 25 percent for South Africa and about 18 percent for KZN.
The province viewed infrastructure development as critical to growing trade and investment in the region.
“As part of our economic development strategy, the province continues to invest in seaport, airport and road infrastructure," said Zikalala.
“We are also placing emphasis on developing regional corridors linking our neighbouring countries such as Mozambique, Swaziland and Lesotho. We are in the process of developing border development plans aimed at advancing regional integration at our borders with these three countries,” said Zikalala.
“As part of our industry development and trade policies, we continue to work with local companies to increase offshore investments in our neighbouring countries and encouraging regional companies to invest in our province.
“To improve the ease of doing business in KZN, in 2017, we set up a one-stop-shop for investment in Durban, and two satellite stations at the Dube Trade Port and Richards Bay Industrial Development Zones. Already, our SEZs are becoming a magnet for international investments aimed at growing export into the regional markets.”