We meet against the backdrop of developmental challenges resulting from the downturn in the global economic order. Our discussions are thus informed by those challenges. The difficulties we face can be in part attributed to our status as commodity exporters. We are thus affected by the decline in the demand for our raw materials and negative resultant price decreases. Hence our own domestic growth patterns have displayed growth that unfortunately does not accurately reflect our true growth potential.
Within the BRICS context, South Africa has four primary goals: We want to see development and inclusive economic growth. We want to promote value-added trade among BRICS countries. We also want to promote investment into productive sectors.
I am of the view that focusing on these goals would enable us to facilitate greater trade, investment and industrialisation which is a key part of addressing common challenges facing us including unemployment, inequality and poverty. We have made much progress with the formulation of key blueprints including the BRICS Strategy for Economic Partnership and subsequent Roadmap, which clearly articulate practical areas of cooperation across all disciplines. I wish to encourage our Captains of Industry, to take ownership of the implementation of this document as you are ultimately the beneficiaries of the programmes contained therein.
It is also important to acknowledge the sterling efforts made by our BRICS Business Council in advancing our developmental objectives. To this end, I would like to applaud the initiatives championed by the Council as it relates to SME development, skills transfer programmes, increasing collaboration with the New Development Bank, the discussions surrounding the establishment of a BRICS rating agency, E-commerce collaboration and the issuance of an Investment Guide, amongst others.
An important development is also the recent launch of the Africa Regional Centre of the New Development Bank in South Africa. The launch of the ARC further demonstrates the commitment by BRICS members towards providing access to capital for infrastructure projects in Africa and other developing countries. We reiterate our view that the New Development Bank must be more welcoming to emerging and developing markets and to Africa in particular, and assist us in taking forward our developmental agenda. We look forward to seeing progress in the funding of infrastructure investment in energy, transport, water and other productive sectors which currently impedes our competitiveness in the broader global landscape.
I must also welcome the growing trade amongst BRICS nations. In terms of our current trade patterns, South Africa’s trade with its BRICS counterparts has increased from 15 billion US dollars in 2010 to 31.2 billion US dollars in 2016. However, despite the increase in intra-BRICS trade, the character of trade has been highly inequitable. Exports from South Africa have been driven particularly by raw materials. This dominance of raw material exports has adversely impacted South Africa.
In as much as South Africa is endowed with natural resources, it is critical that we have in place beneficiation programmes that support our industrialisation policy. It is in this regard, that we call upon our BRICS partners to collaborate with us in a few areas. This includes investing in supply and development programmes in Africa, skills development and technology transfer and also engaging in projects that would support inclusive development and equal partnerships.
We also wish to remind our BRICS partners that given the history of institutionalised racism in South Africa, we continue to work hard to reverse the impact on the economy. South Africa has thus set for itself a plan of action towards the attainment of radical socio-economic transformation. This means that all business partnerships will be expected to include more than before, participants from the black majority, who had been excluded in the ownership, management and control of the economy during the apartheid era.
South Africa offers opportunities currently in many areas as we seek to reignite economic growth. There is an increased focus on industrialisation, mining and beneficiation, agriculture and agro-processing, energy, small, medium as well as micro enterprises (SMMEs), attracting investments, growing the oceans economy and tourism. In addition to this, cross-cutting areas such as science and technology, water and sanitation, infrastructure, transport infrastructure and broadband roll-out have also been prioritised. We also have a specific programme focusing on the development of black industrialists. This initiative aims to expand the industrial base of the country and grow the economy through bringing in the majority to real productive sectors such as manufacturing. BRICS business partners will find South Africa ready to share opportunities in this area.
Let me also reiterate that Africa remains a continent of great opportunity with lots of potential. Despite the recent challenges, Africa’s household consumption and business spending are both growing strongly, offering companies a 5.6 trillion US dollars opportunity by 2025 according to the latest Mckinsey Report.
Africa’s manufacturing sector today does not compare favourably with those of other emerging economies. However, Mckinsey predicts that output could expand to nearly one trillion US dollars in 2025 if Africa’s manufacturers were to produce more to meet domestic demand from consumers and businesses, and work with governments to address factors hindering their ability to produce and export goods.
These statistics cannot be ignored. Africa is thus the current frontier for growth and prosperity and the opportunities from an investment perspective are limitless. I would like to remind you of the words of the great former President Nelson Mandela who once said: “Sometimes it falls upon a generation to be great. You can be that great generation. Let your greatness blossom.”
By Jacob Zuma
President of The Republic of South Africa.