by Munetsi Madakufamba
With southern Africa now enjoying relative peace and stability, there is need to re-Iocate resources toward promotion of increased regional trade and investment in order to achieve long-term sustainable economic development.
This was stressed at a two-day Southern Africa Trade and Investment Summit organised in Harare recently by the International Herald Tribune daily newspaper. The summit, which enjoyed a good turnout, drew more than 300 delegates including political leaders and business executives from around the region, as well as the international investor community.
Opening the summit, Zimbabwe President Robert Mugabe urged the Southern African Development Community (SADC) member states to seriously consider cross-border investment partnerships to instil regional confidence and remove the fear that some member countries were being turned into markets by others.
With reference to the SADC Trade Protocol signed in Maseru last August, Botswana President Sir Ketumile Masire said one of the key objectives was to “contribute toward increased domestic, cross-border and foreign investment, based on the vast natural and human resource potential of this region”.
“In this regard, a lot of ground work has already been covered to support intra-regional trade and investment through cooperation in various sectoral areas such as electricity power inter-connections, shared watercourse systems, as well as the development of corridors that are now actively being promoted,” he added.
Masire confirmed that, at country level, member states were pursuing forward-looking policies and practices aimed at creating an enabling environment to support expanding trade and investment opportunities. Citing his country as an example, he said his government, among other incentives, had slashed corporate tax from 35 to 15 percent in 1995 and there were no more restrictions on capital and dividend flows for portfolio investors.
In a keynote address, Mozambican Prime Minister Pascoal Mocumbi underscored the need to deepen economic ties by taking advantage of each other’s comparative advantages in the region. He noted that while the region was now enjoying relative political stability and had the regional trade protocol in place, it now remained for member states to put the latter’s resolutions into concrete and positive actions.
Intra-regional trade has increased from seven percent of the region’s combined gross domestic product (GDP) two years ago to the current 10 percent. By comparison, intra-regional trade in the European Union amounts to about 60 percent of GDP.
South African Deputy President. Thabo Mbeki called for regional cooperation in combating crime especially in the field of drug trafficking and car racketeering, a legacy of apartheid. He said it was imperative that SADC member states joined hands in ridding the region of this historical stumbling block that he said was hindering a free flow of trade and investment.
Drawing on the lessons of the Asian Tigers and the emerging nations of Latin America, the assistant secretary and director general of the United States Commercial Service, Lauri J. Fitz-Pegado said Africa, and in particular southern Africa, had great potential and that as a partner in trade and investment, it mattered to the US more than ever before.
“SADC’s unique history and growing tendency toward co-operative planning have spurred regional action unmatched elsewhere in Africa. The decision in August by the SADC heads of state to create a common market was the most significant development in the region since South Africa’s historic elections in 1994,” she commented.
She said with regional cooperation came regional opportunities, for southern Africa and US businesses alike, adding that by establishing infrastructure links such as the Maputo Development Corridor in the east and the trans-Kalahari rail-road in the west, the region has created attractive investment opportunities for foreign firms, created jobs and put in place the framework for enhanced trade throughout the region.
The corridor concept was also singled out as being particularly important to the growing partnership between Asia and southern Africa.
Likening SADC countries to the Asian Tigers, Michael Power, emerging markets specialist with UK’s Baring Asset Management, said the region’s fast developing financial market gave southern Africa a great potential to become the “Lions of Africa”.
Many delegates hailed the region’s improved political climate which they said is a fundamental factor in luring more foreign direct investment. They added that economic recovery of the region had to be a cooperative effort among the governments, the private sector, international investors, national and international development agencies.
“Of the five wars that have raged in this region in recent decades, four have ended and the fifth — in Angola — looks to be finally winding down. Compared to much of the Middle East, Central Asia and Africa to the north, southern Africa is a zone of peace and stability, the preconditions for investment and growth,” says Chester Crocker, a former US Assistant Secretary of State for Africa.
There are also high prospects in the mining sector where some major projects around the region have already got off the ground, or will soon do so. Plenty of cobalt deposits have been discovered in Zambia, one of the world’s largest platinum mining projects is underway at Chegutu in Zimbabwe and exciting gold prospects are on the cards in Tanzania.
Marking the closing of the two-day summit, former Secretary General of the African National Congress (ANC) and now executive deputy chairman of New Africa Investments Limited, Cyril Ramaphosa, underscored the need to empower those previously marginalised through affirmative programmes. (SARDC)
