Johannesburg - South Africa would assist poor countries build the capacity to export to the continent's richest economy in an effort to eradicate trade imbalances that often curbed economic growth and development, the minister of trade and industry, Mandisi Mpahlwa, said yesterday.
At the African Investment Forum conference hosted by the Commonwealth Business Council, Mpahlwa told delegates that South Africa would also encourage outward investment into developing infrastructure on the continent to realise the objectives of the New Partnership for Africa's Development (Nepad).
"South Africa intends to focus on systematically promoting imports from the continent into South Africa to take advantage of the opening of our markets," Mpahlwa said.
"We also want to encourage South African companies to invest not only in mining and extraction industries, but also in manufacturing in order to strengthen the capacity of African countries to be able trade with us," he added.
Nepad is an initiative aimed at improving governance and political stability across the African continent in exchange for improved donor funding and foreign direct investment (FDI).
The forum, which kicked off yesterday, was attended by hundreds of business leaders and African ministers, and aims to identify ways of boosting trade and investment within the continent and sourcing finance for small enterprise development.
South Africa enjoys trade surpluses with most countries on the continent and some of its locally produced goods find their way into countries such as Botswana, the Democratic Republic of Congo and Tanzania.
While FDI flows into Africa have dropped dramatically since the 1970s, local mining and telecommunications companies such as Anglo American and MTN have forged ahead in establishing their footprints on the continent and are making sizeable investment returns.
Local investment into Africa in 2001 amounted to R26.8 billion, marking an increase of R2.7 billion from 2000.
It is estimated that Africa requires investment flows totalling $389 billion (R2.55 trillion) to achieve a growth rate of above 6 percent.
But Wiseman Nkuhlu, the chairman of Nepad's steering committee, said about 18 African countries, including Nigeria, achieved growth rates of around 5 percent in 2003, compared with the average of 2.9 percent growth in 2002.
Nepad sought to raise economic growth in Africa to roughly 7 percent over the next 10 years.
"These results demonstrate that African countries are committed to improving economic and fiscal management, creating a better investment climate for private companies to operate and increasing government investment in infrastructure," Nkuhlu said.
To achieve Nepad's goals, Tony van Kralingen, the managing director of SAB, said heads of states, leading business executives, and finance and trade ministers must create an advisory forum to discuss ways of boosting economic growth and development on the world's poorest continent.