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Call for region to embrace free trade agenda

The Zimbabwean, Harare

Call for region to embrace free trade agenda

31 October 2008

By Chris van Gass, Cape Correspondent

CAPE TOWN - The trade liberalisation agenda in southern Africa and Africa as a whole needed to be strengthened, Tshediso Matona, the director-general of the trade and industry department, said on 30 October.

Governments in the region needed to commit themselves to the concept by implementing free trade agreements that had already been negotiated, he said.

Matona said the launching of the Southern African Development Community (SADC) free trade agreement this year created the basis for a much deeper and broader regional trade for those countries already committed.

However, he said this was the first phase of expanding free trade among SADC countries and the benefits of increased investments would make those countries which have been reluctant so far “realise the value of going all the way”.

Matona, speaking at a media briefing during the South African trade and investment conference held in collaboration with the various provincial investment promotion agencies, said that SA as the biggest economy in Africa provided a “key platform” for investment into Africa. It was also a strategic access point for the Indian Ocean markets and South America.

He said trade into Africa now exceeded trade with the US and he anticipated that Africa would be the investment destination of choice for the next 15-20 years.

Matona said most of the investments targeted for SA would be export orientated and, while SA had its own domestic market, the investments would become more lucrative if they looked at exporting to the region, the continent and other markets such as Europe, North America and Asia.

He said it was necessary in certain sectors to integrate into international supply chains and one sector where there have been results was in manufacturing.

This had provided confidence in the government and the market to further consider growth in dynamic sectors, including aerospace technologies.

Matona said that in spite of the global financial turmoil and recession in the major markets, SA’s economy was slowing down - but not contracting.

In SA’s favour was the $60bn public investment programme over the next three years which would create a platform for private sector investment opening up a number investment opportunities and collaboration with international partners.

Another surprise had been realisation of how well regulated the South African banking industry was.

Andrew Peterson, MD of Procter & Gamble, which is investing more than R200m in a nappy factory in Kempton Park, said SA had an opportunity to use the financial crisis to build for the future as “crisis is a time of opportunity”.

He said there was a compelling case to invest in Africa as a consumer goods company and a strong, if not compelling, case to be in SA.

He said Africa was the last big market in the world that was untouched.

Peralt van der Merwe, of Heineken, said contrary to perceptions in Europe, SA’s infrastructure was “very good” and doing business in SA was far less challenging than in other countries.