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SA aims to realign trade, investment policies to fast-growing African prospects


By: Brindaveni Naidoo
4th October 2011

South Africa would continue to focus on building its trade and investment relations with key countries in Africa, focusing on market integration, strengthening production capacities and cross-border infrastructure, Department of Trade and Industry (DTI) director for trade in services Sudhir Sooklal said on Tuesday.

Speaking at the South African Chamber of Commerce and Industry convention, in Johannesburg, he said over the next five years, growth in Africa would average 5.5%, the continent's output would expand by 50% and the continent's gross domestic product (GDP) per capita would increase by 30%.

Further, private consumption in Africa's 10 largest economies would more than double and trade could grow from $654-billion to $1.6-trillion by 2015, with capital inflows expected to reach $150-billion.

"In this regard, regional integration is compelling in a continent which is the second fastest growing region in the world after Asia."

South Africa was already one of the largest investors in Africa, while Africa was the main destination for South African manufactured exports, but the country's trade policy should be more alive to the opportunity Africa presented in bolstering South Africa's productive capacity.

"We must protect and expand our productive base while maintaining development policy space and it is necessary to build cooperative agreements for complementarity in economic structures for mutually beneficial outcomes."

What remained key for South Africa was to shift its structure and pattern of trade and ensure improved export performance in manufactured goods.

Therefore, South Africa would continue to consolidate and extend regional integration in Southern and Eastern Africa through the Southern Africa Customs Union, the Southern African Development Community, the East Africa Community, and the Common Market for Eastern and Southern Africa free trade agreement.

But the country would also continue to foster and develop it relations with key economies in the northern hemisphere, as well as with fast-expanding emerging markets.

Industrial countries would remain an important source of trade, investment, finance and technology, and it was, thus, important to extend and deepen the benefits of investment and trade with the US through an extension of the African Growth and Opportunity Act.

Sooklal said the country would coordinate with the members of the Brics (Brazil, Russia, India, China and South Africa) grouping at multilateral level for fair, equitable global rules and give voice to developing countries.

"We will continue to work with our partners in these groupings to identify areas of collaboration and build on existing work, as well as use the Brics engagement for national and African development objectives."

The Brics countries are among the fastest-growing, largest emerging economies and at the forefront of reshaping the global economy, with the global economic crisis a catalyst for growth of this trend, Sooklal believed.

This shift was reflected in GDP growth, shares of global trade, investment and purchasing power. Developing countries' share of world trade would double over the next 40 years, from 37% in 2007, to 69% in 2050.

Brics countries would account for 61% of global growth in three years, the International Monetary Fund indicated recently.

Meanwhile, South Africa would continue to support multilateralism and seek a strengthened rule-based trading system in the World Trade Organisation that supported development.

"We will continue to resist efforts to erode the developmental mandate in the Doha Round. Negotiations are at an impasse and the priority is to now preserve the developmental promise of Doha," he said.

Edited by: Terence Creamer

Source: Engineering News

SA aims to realign trade, investment policies to fast-growing African prospects

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