#WEF: Build relationships in Africa – Gigaba

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.”

Read also:  #WEF: An African economy that benefits all

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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