President Cyril Ramaphosa says the African continent boasts huge potential for economic growth – making it a lucrative option for keen investors.
Addressing delegates at the Japan-Africa Public-Private Forum at the Sandton Convention Centre on Thursday evening, President Ramaphosa said: “Africa is open for business”.
“In 2017, Africa’s exports to Asia as a whole were worth around $64 billion, of which Japan accounted for around $8.3.
“However, the current basket of exports is very much commodity-based, exposing African countries to price fluctuations and denying them the opportunity to extract additional value from these commodities,” said President Ramaphosa.
Diversification and greater production
The President highlighted diversification and the shift towards greater production of intermediate and final consumer and industrial products as the next step for African economies.
He said while government was a key role player in growing economies, it cannot take on the task alone.
The forum was graced by Ministers and Deputy Ministers, business leaders from Africa and Japan who came together to discuss ways to strengthen trade relations in a mutually beneficial manner.
“This Forum is about cooperation and collaboration, not only between different countries, but also between the public and private sectors in those countries. The social and economic challenges on the African continent will not be effectively addressed if governments and business do not work together.
“Similarly, we will not be able to expand trade and investment relations between Japan and African countries unless our respective governments, state owned entities and other public institutions are aligned with the work of the private sector,” said the President.
Africa must learn from Japan
He called on African countries to take a hold of the opportunity to learn from Japan in order for their economies to be more effectively integrated into the global economy.
“In pursuing its economic development, Africa can learn much from Japan’s Kaizen philosophy, with its emphasis on productivity improvement, efficiency, support for SMMEs and skills development,” said President Ramaphosa.
While the President emphasised on the transfer of skills, the need to create jobs by tapping into the young unemployed population and growing the manufacturing sector as a fertile ground for growth, he added that investment was central to the realisation of the plans.
“A necessary condition for all these efforts to succeed is a massive increase in investment in the continent.
“As a country, we have realised that we will not be able to grow our own economy and reduce unemployment and inequality without a massive increase in both domestic and foreign direct investment,” said the President.
Stable country ready for investment
He made reference to his new investment drive that aims to generate at least $100 billion in new investment over the next five years to the country, adding that South Africa was a stable country ready for investment.
“The country has stable institutions, a thriving democracy, an independent judiciary and a strong commitment to the rule of law.
“South Africa boasts an advanced and competitive financial and professional services sector, backed by a sound regulatory and legal framework.
African Continental Free Trade Area
Turning his sights on the Africa continent, the President said the establishment of an African Continental Free Trade Area unlocks opportunities to create a single continental market for goods and services, with free movement of business persons and investment.
“It is expected to enhance competitiveness at the industry and enterprise level through exploitation of opportunities for production at scale, continental market access and better reallocation of resources,” said the President.
Fourth industrial revolution
While Japan is among the top 10 investors in South Africa with 280 companies – such as Toyota, Isuzu and NGK operating in South Africa, President Ramaphosa said the financial and technology sectors are areas for growth.
“The increase in digitisation and use of cutting edge technology and innovation are critical factors for Africa to ensure it takes advantage of the fourth industrial revolution.
“There is also great potential in financial services. African economies need capital and Africa’s people need banking. We therefore invite Japanese banks to expand their presence on the African continent, which, among other things, would greatly facilitate trade and investment between Japan and Africa,” said President Ramaphosa.