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Date : 07/10/2004
Source: The Presidency
Title: J Zuma: Gala Dinner celebrating Africa as a continent of opportunities


ADDRESS DELIVERED BY DEPUTY PRESIDENT, J ZUMA, AT THE GALA DINNER CELEBRATING AFRICA AS A CONTINENT OF OPPORTUNITIES, Sandton Convention Centre, 7 October 2004

Program Director,
Gauteng MEC for Local Government and Land Affairs, Dorothy Mahlangu,
Captains of industry and commerce,
Business executives,
Distinguished Guests,

At the end of the 20th Century, in the year 2000, we declared the 21st Century as the dawn of the African century.

We did so for a number of reasons. Firstly, it was because we realised that Africa as a continent had been marginalised and underdeveloped due to colonialism.

Due to this legacy of colonialism, Africa lagged behind in many respects, and faces many challenges including poverty, underdevelopment and conflicts, to mention a few.

Research indicates that close to 50 percent of Africans still live on less than one United States Dollar a day, and Africa remains one of the least developed continents in the world, both at the level of physical infrastructural development and science and technology.

However, there is reason for optimism, because Africa has a huge potential to move out of its condition of underdevelopment and poverty.

Our optimism is informed by the fact that Africa is rich in natural resources like oil, gold, diamonds, gas, solid materials and many others.

It also has good climatic conditions which makes it suitable for the development of agriculture.

Our optimism also stems from the fact that the political will exists to turn the situation around for the better, and a lot has happened already to demonstrate this.

The formation of the African Union, as well as its organs such as the Peace and Security Council, Pan-African Parliament and programmes such as the New Partnership for Africa's Development, (NEPAD), are all instruments designed to enable the continent to achieve the renewal goals.

A lot of work is being done to create the right environment for sustainable development, peace and stability. Many efforts are going into conflict resolution and management.

In addition, Africa's commitment to democracy and human rights is evidenced by the increase in the number of democratically elected governments and peaceful changes in power since the early 1990s. Africa now has more democratically elected governments than at any other stage of her post-independence history.

The African Peer Review Mechanism, under NEPAD, as an instrument for peer learning and the sharing of best practice in political, economic and corporate governance, is another indication of the seriousness of African leadership.

The review process has begun with the first set of reviews being conducted in Kenya, Ghana, Rwanda and Mauritius and twenty three states have signed up to date. While creating the right socio-political environment, it has been crucial as well to create the correct economic conditions.

It is within this context that, as the South African government, we have embarked on a process to legislate a policy on Black Economic Empowerment. BEE was adopted because government in 1994 had inherited an economy that was in a long-term decline, and was massively distorted by apartheid's political and economic policies. The black majority had effectively been excluded from economic ownership and control, fundamentally undermining black people's ability to accumulate capital.

Changing ownership and workplace relations are part of this wider process, including improvement in the levels of household income. We must emphasise that we would like to see a situation where empowerment benefits the greater majority of our country, including women.

Ladies and gentlemen, the economic challenges of our country also demand bold initiatives both from government and the private sector.

It is because of this reason that as government we have embarked upon a process of developing the Second Economy.

South Africa is still economically divided into two economies, a legacy of apartheid. The First Economy is modern, developed and highly industrialised, and produces the bulk of our country's wealth. It is also fully integrated within the global economy. The Second Economy is characterised by underdevelopment, incorporates the poorest of our people, both rural and urban, is structurally disconnected from both the First and global Economy, and is not capable of generating its own growth and development.

Both economies are interdependent and interrelated. The First Economy cannot realise its full potential, nor can it guarantee the social stability it needs, unless it achieves growth, and ensure the integration within its sphere of operation, of millions still locked within the Second Economy.

On the other hand the Second Economy cannot achieve growth and development, and the realisation of the goals of reconstruction and development, without large and sustained human, financial and technological resource transfers from the First Economy.

To intervene in addressing this disparity is a massive project which requires your support as the business sector.

While pursuing the restructuring of our economic relations as mentioned above, we are also continuing with our mission of encouraging inter-African trade and other economic linkages, as part of boosting economic growth in our continent.

There are a number of initiatives that are being embarked upon to achieve this objective, and we have also noted greater participation by the South African business community.

One of these projects is the Spatial Development Initiative, (SDI's), a method that we developed in 1996 as an integrated tool to promote investment-led growth in regions of the country that were underdeveloped but had a potential for development. The classical case of success in this regard has been the Maputo Development Corridor, where the governments of Mozambique and South Africa collaborated with the private sector to launch major investment in both sides of the corridor and national borders.

This included huge investments in developing the transport infrastructure by upgrading the Witbank-Nelspruit-Maputo N4 highway, and also upgrading the port facilities at Maputo harbour. The Maputo Development Corridor alone is set to attract over seven billion US dollars in terms of its earmarked projects.

Another example is that of the development of the Lesotho Highlands Water Project.

Ladies and gentlemen, I must emphasise that we are encouraged by the manner in which our business community has taken up the challenge of promoting intra-African trade. This type of expansion will contribute to the development of the continent, and also have major positive spin-offs for our own economy.

According to a recent report by the United Nations Conference on Trade and Development (UNCTAD), "South Africa is the top foreign investor in Africa and the region's most attractive country" for investment. It accounts for 60% of Africa's Foreign Direct Investment (FDI) outflows for 2003, and ranked ninth in terms of FDI outflow from developing countries.

This report further states, that: "seven South African companies are the only ones on the continent that feature among UNCTAD's top 50 trans-national companies based in the developing countries. The companies mentioned include Sappi, Sasol, MTN and Anglo-Gold.

Our internal research as government also indicates that South African companies are carving a niche for themselves in Africa. For example, the Industrial Development Corporation has about 37 projects under implementation or consideration in 13 countries. This includes the important Mozambican Aluminium Smelter.

When it comes to Foreign Direct Investment in SADC, South African companies play a leading role in the construction industry, while in the mining industry our country's companies have the edge over their competitors with regard to technology, expertise and services that are in great demand in the region.

Other areas where South African companies play a leading role include the financial services, energy, oil as well as telecommunications, where our companies compete against each other in the continent. All these developments make us optimistic that the goal of an African Renaissance can be achieved.

Politically, as stated earlier, the continent has a clear direction and programme being implemented through the African Union. Economically, we have NEPAD as a blueprint to take us forward. The active participation of our business community in the continent provides evidence of the existence of real opportunities in Africa.

I urge you therefore to reap the benefits of the revival of this great continent, to benefit not only the continent, but more specifically, our own country.

Africa can only go forward from now onwards.

I thank you.

Enquiries: Ms Lakela Kaunda
Chief Director: Communications/Spokesperson
Tel: 012 300 5200
Fax: 012 326 3010
Cell: 082 782 2575
Issued by: The Presidency
7 October 2004

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