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.”
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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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