Date: 19/05/2003
Source: Ministry of Trade and Industry
Title: Hendricks: SMME NEPAD Conference
SPEECH BY DEPUTY MINISTER OF TRADE AND INDUSTRY, LINDIWE HENDRICKS, AT THE SMME NEPAD CONFERENCE, Didata Campus, Bryanston, 19 May 2003
Honoured guests,
Programme Director,
Ladies and gentlemen.
I would like at the outset to congratulate the organisers of this conference for keeping all of us on our toes and ensuring that the benefits of Africa's renewal are not lost to the SMME sector. Indeed in the normal scheme of things large corporations and multinationals would be the ones who win tenders and contracts for the reconstruction of Africa due to their financial muscle and experience of working access continents. It is events like this one that ensure that the SMME sector is prepared and enabled to participate. It is for this reason that I think we should all give a round of applause to the organisers. A follow up conference would naturally be "Financing NEPAD" where the World Bank, IMF and United Nations and its agencies would come and tell the SMME sector what resources they have set aside for NEPAD and how to access these resources.
NEPAD has the potential to turn Africa into a dynamic and economically vibrant continent offering many opportunities to the SMME sector.
As most of you are aware the New Partnership for Africa's Development, or NEPAD, is a strategic framework and a long-term programme for the socio-economic renewal of Africa. It is a programme that will help us to overcome the challenges and problems that we face as a continent.
The challenges in Africa affect and constrain small businesses in a number of ways. For example poor rail and road infrastructure creates high costs for enterprises to transport goods; lack of access to and availability of capital hampers business start up and growth, lack of managerial skills amongst middle- managers also acts as a barrier to growth and there is often poor take up of information technology by small businesses - ICT is often a basic requirement if businesses want to enter the global market. In addition, African small firms still have to deal with some of the prejudices that they find in their own market never mind such problems when entering overseas markets.
NEPAD is a coherent and holistic programme of action that will seek to address these and many more challenges faced by businesses in Africa. NEPAD has as it has as its overall objective to eradicate poverty and to place African countries both individually and collectively on a path of sustainable development and growth so as to ensure that Africa is no longer on the margins of the global economy. This will play a role in reducing the gap between the developed and developing countries. Integrating gender and women issues in the programme is an important element of NEPAD and special consideration has been given to this issue in the NEPAD Plan of Action. It has also been recognised that the private sector and SMMEs can play an important role in supporting the objectives of NEPAD.
NEPAD is a very broad programme and covers three broad areas. First are conditions for sustainable development. This area looks at Peace and Security, Democracy and Political Governance, Economic Governance and Management, Regional Integration and Capacity Building. The second area of NEPAD covers Sectoral Priorities, Market Access, Diversification of Production, and Exports, as well as Infrastructure Development, Health, the Environment, Science and Technology, Agriculture, and Human Resource Development (which covers education). Thirdly, NEPAD looks at the mobilisation and utilisation of resources for the implementation of these activities. This third area covers issues such as domestic savings and investment, debt reduction, overseas development assistance and foreign direct investment.
What NEPAD hopes to achieve is sustainable development, good governance amongst member countries, and further support peace and security efforts so as to end the remaining conflicts and wars that exist. Furthermore NEPAD will address the backlog of poor infrastructure, promote the acceptance of cultural diversity, and encourage regional co-operation by amongst other things the opening up of borders. This last point is linked to the need to increase intra-Africa trade and bringing down trade barriers between African countries, which will increase the access that businesses, including SMMEs have to new markets in those countries. NEPAD also seeks to identify where the comparative advantages of Africa lie so that new markets can be opened up, which can be turned into a competitive edge for the continent.
In order to achieve these objectives the NEPAD secretariat and the African Union are working with African governments to put a comprehensive programme in place. There is also consistent engagement by the leadership of the African Union and NEPAD with both developed and developing countries to support the objectives of NEPAD and to offer material support and assistance with several of the NEPAD initiatives. Some success has been achieved at the United Nations, European Union and with the G8 countries. While there are some concerns that international attention will shift away from supporting Africa due to the rebuilding of Iraq, the efforts to promote Africa and NEPAD will continue so that this shift does not negatively impact on our programmes and the donor aid that was earmarked for African and NEPAD initiatives.
Ladies and gentlemen the theme of this conference and the question that you will be asking is how will small businesses benefit from NEPAD. The opportunities arising from NEPAD are:
Firstly, through the donor assistance, development finance and contributions of national governments for the NEPAD initiatives there will be many opportunities in the areas of infrastructure development including building, upgrading and maintaining roads, ports, and railway links, as well as, opportunities in telecommunications, health care, and education and training. NEPAD is clear that these opportunities will be available primarily to indigenous businesses.
Secondly, by bringing down the risk of doing business in Africa through a concerted effort to reduce wars and conflicts, NEPAD will create a favourable environment for the private sector to thrive and grow. It will also provide the scope for the establishment of new enterprises who can service the basic needs of people.
Thirdly, NEPAD will also address the problem of corruption. Corruption is an impediment to the development of the private sector because it increases the costs of doing business and by undermining the rule of law prevents businesses from operating and transacting efficiently. By addressing corruption NEPAD will lower costs of entry into new markets and allow for greater access to these markets for SMMEs.
Fourthly, NEPAD will address the problem faced by some countries, which focus and are dependent on single commodities such as oil, minerals, coffee, and tobacco by assisting them to diversify their economies and develop a stronger industrial and manufacturing base. We need to find ways of ensuring that our natural resource base is harnessed and more and more value is added to these products.
Fifthly by addressing the above areas and improving the dynamism of the private sector NEPAD will act as a catalyst to attract new large-scale investments. Such investors will need small businesses that can supply them with quality goods and services at competitive rates. Those businesses within close proximity or accessible by a well functioning transport network to these operations, will have a good opportunity to win contracts.
The impact that these five areas will have is to create employment opportunities, raise the levels of income and grow the market place. Consequently, this will open up normal private sector opportunities that we see in any dynamic business environment. Once this has been achieved small businesses will have a multitude of opportunities in every sector, for example, in financial markets and services, retailing, ICT, manufacturing, agro processing, and business services.
Ladies and gentlemen, if NEPAD is to be successful it will require that all stakeholders in Africa give the programme their support. As you are no doubt aware the South African government is the driving force behind NEPAD. For example, President Mbeki is a member of the Implementation Committee of NEPAD, South Africa is hosting the NEPAD Secretariat, and government departments such as the Department of Trade and Industry (the dti) have prioritised the support of NEPAD - I will speak more about the dti support shortly.
I am pleased to see that there is also significant support for NEPAD from both South African civil society and the private sector. This conference and other forums are testimony to that support. I am also pleased that already many South African firms including small businesses are starting to identify opportunities and are entering the markets of other African countries to supply a range of products and services. In addition, many South African based firms are increasingly supplying larger firms that have established operations in other African countries. Good examples of this are in the telecommunications, minerals and food retail industries.
As I have just mentioned the dti is committed to supporting NEPAD and promoting intra-Africa trade. We see this as a vehicle to developing businesses not only in South Africa but also in the rest of the continent. The dti has, amongst other things, been working on negotiating bi-lateral trade agreements with other African countries and sits in several multilateral trade structures that promote trade co-operation. We have also embarked on a number of initiatives to promote trade through, for example, our recent signing of an improved trade agreement with the Southern African Customs Union (SACU). In addition, last year the dti hosted an African Union business event that ran alongside the African Union Summit, the dti regularly takes and supports trade missions to other African countries, and officials in the dti have gone on several technical missions to assess the viability of signing trade agreements and taking trade missions to other African countries.
Through the Export Marketing and Investment Assistance (EMIA) incentive of the dti, we subsidise up to 80% of the international travel costs of businesses that participate in our and other approved trade missions. We therefore are not only helping small businesses by negotiating trade agreements so that they can access these markets but are also providing the support to take them to these markets.
To conclude, programme director, NEPAD will create many exciting business opportunities for small businesses; some of these opportunities will arise directly from the programmes that NEPAD will be implementing and others from the improved economic and political situation brought about by NEPAD and the African Union. There is no doubt that many opportunities have been missed partly because of some of the perceived and real problems in many African countries. NEPAD will be addressing many of these problems and working very hard to change the perceptions that people have of Africa. Already the impact of the work done by the NEPAD and AU is being felt, for example, in working with governments and other structures to end several conflicts that have gone on for many years. What we have also seen is that African economies are starting to grow, with the continent on average having a growth rate of between 3% and 4% over the past year and with some countries achieving up to 10% growth p.a.
Through NEPAD and the support given by the dti we are hoping that South African businesses are able to take advantage of the benefits that NEPAD will bring and the growth opportunities that lie in other countries in Africa by going into these markets as investors, traders or suppliers.
It has been a exciting for me to talk to you about the possibilities that the New Partnership for Africa's Development holds for the continent and the possibilities that exist for small businesses not only to benefit from the developments that will take place as a result of NEPAD but also for small businesses to play an important role in contributing to the economic growth and development of the African continent.
I thank you for listening to me.
Issued by Ministry of Trade and Industry
19 May 2003
Source: Ministry of Trade and Industry
Title: Hendricks: SMME NEPAD Conference
SPEECH BY DEPUTY MINISTER OF TRADE AND INDUSTRY, LINDIWE HENDRICKS, AT THE SMME NEPAD CONFERENCE, Didata Campus, Bryanston, 19 May 2003
Honoured guests,
Programme Director,
Ladies and gentlemen.
I would like at the outset to congratulate the organisers of this conference for keeping all of us on our toes and ensuring that the benefits of Africa's renewal are not lost to the SMME sector. Indeed in the normal scheme of things large corporations and multinationals would be the ones who win tenders and contracts for the reconstruction of Africa due to their financial muscle and experience of working access continents. It is events like this one that ensure that the SMME sector is prepared and enabled to participate. It is for this reason that I think we should all give a round of applause to the organisers. A follow up conference would naturally be "Financing NEPAD" where the World Bank, IMF and United Nations and its agencies would come and tell the SMME sector what resources they have set aside for NEPAD and how to access these resources.
NEPAD has the potential to turn Africa into a dynamic and economically vibrant continent offering many opportunities to the SMME sector.
As most of you are aware the New Partnership for Africa's Development, or NEPAD, is a strategic framework and a long-term programme for the socio-economic renewal of Africa. It is a programme that will help us to overcome the challenges and problems that we face as a continent.
The challenges in Africa affect and constrain small businesses in a number of ways. For example poor rail and road infrastructure creates high costs for enterprises to transport goods; lack of access to and availability of capital hampers business start up and growth, lack of managerial skills amongst middle- managers also acts as a barrier to growth and there is often poor take up of information technology by small businesses - ICT is often a basic requirement if businesses want to enter the global market. In addition, African small firms still have to deal with some of the prejudices that they find in their own market never mind such problems when entering overseas markets.
NEPAD is a coherent and holistic programme of action that will seek to address these and many more challenges faced by businesses in Africa. NEPAD has as it has as its overall objective to eradicate poverty and to place African countries both individually and collectively on a path of sustainable development and growth so as to ensure that Africa is no longer on the margins of the global economy. This will play a role in reducing the gap between the developed and developing countries. Integrating gender and women issues in the programme is an important element of NEPAD and special consideration has been given to this issue in the NEPAD Plan of Action. It has also been recognised that the private sector and SMMEs can play an important role in supporting the objectives of NEPAD.
NEPAD is a very broad programme and covers three broad areas. First are conditions for sustainable development. This area looks at Peace and Security, Democracy and Political Governance, Economic Governance and Management, Regional Integration and Capacity Building. The second area of NEPAD covers Sectoral Priorities, Market Access, Diversification of Production, and Exports, as well as Infrastructure Development, Health, the Environment, Science and Technology, Agriculture, and Human Resource Development (which covers education). Thirdly, NEPAD looks at the mobilisation and utilisation of resources for the implementation of these activities. This third area covers issues such as domestic savings and investment, debt reduction, overseas development assistance and foreign direct investment.
What NEPAD hopes to achieve is sustainable development, good governance amongst member countries, and further support peace and security efforts so as to end the remaining conflicts and wars that exist. Furthermore NEPAD will address the backlog of poor infrastructure, promote the acceptance of cultural diversity, and encourage regional co-operation by amongst other things the opening up of borders. This last point is linked to the need to increase intra-Africa trade and bringing down trade barriers between African countries, which will increase the access that businesses, including SMMEs have to new markets in those countries. NEPAD also seeks to identify where the comparative advantages of Africa lie so that new markets can be opened up, which can be turned into a competitive edge for the continent.
In order to achieve these objectives the NEPAD secretariat and the African Union are working with African governments to put a comprehensive programme in place. There is also consistent engagement by the leadership of the African Union and NEPAD with both developed and developing countries to support the objectives of NEPAD and to offer material support and assistance with several of the NEPAD initiatives. Some success has been achieved at the United Nations, European Union and with the G8 countries. While there are some concerns that international attention will shift away from supporting Africa due to the rebuilding of Iraq, the efforts to promote Africa and NEPAD will continue so that this shift does not negatively impact on our programmes and the donor aid that was earmarked for African and NEPAD initiatives.
Ladies and gentlemen the theme of this conference and the question that you will be asking is how will small businesses benefit from NEPAD. The opportunities arising from NEPAD are:
Firstly, through the donor assistance, development finance and contributions of national governments for the NEPAD initiatives there will be many opportunities in the areas of infrastructure development including building, upgrading and maintaining roads, ports, and railway links, as well as, opportunities in telecommunications, health care, and education and training. NEPAD is clear that these opportunities will be available primarily to indigenous businesses.
Secondly, by bringing down the risk of doing business in Africa through a concerted effort to reduce wars and conflicts, NEPAD will create a favourable environment for the private sector to thrive and grow. It will also provide the scope for the establishment of new enterprises who can service the basic needs of people.
Thirdly, NEPAD will also address the problem of corruption. Corruption is an impediment to the development of the private sector because it increases the costs of doing business and by undermining the rule of law prevents businesses from operating and transacting efficiently. By addressing corruption NEPAD will lower costs of entry into new markets and allow for greater access to these markets for SMMEs.
Fourthly, NEPAD will address the problem faced by some countries, which focus and are dependent on single commodities such as oil, minerals, coffee, and tobacco by assisting them to diversify their economies and develop a stronger industrial and manufacturing base. We need to find ways of ensuring that our natural resource base is harnessed and more and more value is added to these products.
Fifthly by addressing the above areas and improving the dynamism of the private sector NEPAD will act as a catalyst to attract new large-scale investments. Such investors will need small businesses that can supply them with quality goods and services at competitive rates. Those businesses within close proximity or accessible by a well functioning transport network to these operations, will have a good opportunity to win contracts.
The impact that these five areas will have is to create employment opportunities, raise the levels of income and grow the market place. Consequently, this will open up normal private sector opportunities that we see in any dynamic business environment. Once this has been achieved small businesses will have a multitude of opportunities in every sector, for example, in financial markets and services, retailing, ICT, manufacturing, agro processing, and business services.
Ladies and gentlemen, if NEPAD is to be successful it will require that all stakeholders in Africa give the programme their support. As you are no doubt aware the South African government is the driving force behind NEPAD. For example, President Mbeki is a member of the Implementation Committee of NEPAD, South Africa is hosting the NEPAD Secretariat, and government departments such as the Department of Trade and Industry (the dti) have prioritised the support of NEPAD - I will speak more about the dti support shortly.
I am pleased to see that there is also significant support for NEPAD from both South African civil society and the private sector. This conference and other forums are testimony to that support. I am also pleased that already many South African firms including small businesses are starting to identify opportunities and are entering the markets of other African countries to supply a range of products and services. In addition, many South African based firms are increasingly supplying larger firms that have established operations in other African countries. Good examples of this are in the telecommunications, minerals and food retail industries.
As I have just mentioned the dti is committed to supporting NEPAD and promoting intra-Africa trade. We see this as a vehicle to developing businesses not only in South Africa but also in the rest of the continent. The dti has, amongst other things, been working on negotiating bi-lateral trade agreements with other African countries and sits in several multilateral trade structures that promote trade co-operation. We have also embarked on a number of initiatives to promote trade through, for example, our recent signing of an improved trade agreement with the Southern African Customs Union (SACU). In addition, last year the dti hosted an African Union business event that ran alongside the African Union Summit, the dti regularly takes and supports trade missions to other African countries, and officials in the dti have gone on several technical missions to assess the viability of signing trade agreements and taking trade missions to other African countries.
Through the Export Marketing and Investment Assistance (EMIA) incentive of the dti, we subsidise up to 80% of the international travel costs of businesses that participate in our and other approved trade missions. We therefore are not only helping small businesses by negotiating trade agreements so that they can access these markets but are also providing the support to take them to these markets.
To conclude, programme director, NEPAD will create many exciting business opportunities for small businesses; some of these opportunities will arise directly from the programmes that NEPAD will be implementing and others from the improved economic and political situation brought about by NEPAD and the African Union. There is no doubt that many opportunities have been missed partly because of some of the perceived and real problems in many African countries. NEPAD will be addressing many of these problems and working very hard to change the perceptions that people have of Africa. Already the impact of the work done by the NEPAD and AU is being felt, for example, in working with governments and other structures to end several conflicts that have gone on for many years. What we have also seen is that African economies are starting to grow, with the continent on average having a growth rate of between 3% and 4% over the past year and with some countries achieving up to 10% growth p.a.
Through NEPAD and the support given by the dti we are hoping that South African businesses are able to take advantage of the benefits that NEPAD will bring and the growth opportunities that lie in other countries in Africa by going into these markets as investors, traders or suppliers.
It has been a exciting for me to talk to you about the possibilities that the New Partnership for Africa's Development holds for the continent and the possibilities that exist for small businesses not only to benefit from the developments that will take place as a result of NEPAD but also for small businesses to play an important role in contributing to the economic growth and development of the African continent.
I thank you for listening to me.
Issued by Ministry of Trade and Industry
19 May 2003
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