11 September 2001
The Director of Ceremonies;
The CEO of Investec and management;
Captains of Industry and Commerce;
Distinguished guests;
Ladies and gentlemen;
Thank you for inviting me to share this important occasion with you.
I am honoured to be with you; given the importance that we as government afford the partnership with business, including the financial sector.
We believe business has a vital role to play in creating and pursuing opportunities for social stability and economic growth in our country, and combating those challenges that militate against our national aspirations.
Ladies and gentlemen, I am also pleased to be meeting with you to discuss the important process we are engaged in, that of rebuilding our continent. Key to this is the New African Initiative, also known as the Millennium African Recovery Programme.
The Initiative is premised on the determination of Africans to extricate themselves and the continent from the legacy of underdevelopment and exclusion in a globalizing world. It is not a call for concessions and more aid, but a call for equal partnership in development between the continent and the developed world.
The continent is serious about making this initiative work, and support has been canvassed all over the world among the richer nations in the North as well as the developing world in the South.
Our President has also eloquently advanced the cause of this recovery in various platforms around the globe, and has been positively received.
There are already good signs of hope in the continent. The numbers of governments that come to power democratically is increasing. There is also a renewed emphasis on human rights and dignity, and people-centred development.
The decision taken by the predecessor of the African Union, the Organisation of African Unity, not to recognise leaders who come to power through undemocratic means, was a watershed in our history. It proved that this continent has taken a decision to transform itself, mainly in the manner in which it has to run its political systems and affairs. This was an important decision because for economic development to succeed, the political climate must be made conducive.
This determination is evident in the New African Initiative, which emphasises the promotion of peace and stability and ending conflicts in the continent, democratisation, trade and investment and sustainable development.
Ladies and gentlemen, as businesspeople you will agree with me that key to the achievement of these goals is sound economic policies and establishment of appropriate institutional frameworks to guide economic policymaking and execution. Added to this is the importance of the participation of the private sector in the economic decision-making processes.
Sound economic governance will enable African states to deliver on their mandate to improve the quality of life of their people. It is encouraging to note that there are already some success stories in the continent, with countries that are in the process of implementing sound economic programmes. The purpose of the New African Initiative serves to complement these programmes and provide an impetus for further development and progress in this regard.
The economic governance initiative is bound to succeed, ladies and gentlemen, because it is mandated at the highest level by Heads of State. It bears the much-needed political will.
Another important aspect of the recovery plan is the raising of capital and finance by African countries. This continues to be a serious impediment. Finance is currently only obtainable through overseas development aid, debt relief, and private capital flows, as well as government revenues and intra-African capital flows.
The Capital Flows Initiative within the recovery plan seeks to strengthen Africa's capacity to attract external resources. With our highly developed financial system, South African financial institutions have a role to play to assist in the achievement of these goals.
The Capital Inflows Initiative focuses on three areas: debt relief, reform of the Official Development Assistance (ODA) relationship, and enhancing private capital flows.
We feel that for the continent to grow economically, it requires significantly higher amounts of private capital flows and foreign direct investment. Our research shows that for the continent to meet the International Development Goals, the continent's GDP has to grow at an average rate of 7% per annum. Domestic savings are insufficient for this.
There is a resource gap of about 60 billion US dollars. We believe that private capital flows would happen if the risk of investments, especially political risk, were reduced. That is why we stress sound political, democratic and economic governance in the New African Initiative.
Ladies and gentlemen, I cannot finish my address without touching on the important area of human resource and skills development, another key aspect of the recovery programme. And as part of this skills development, it is important that we prioritise science and technology.
However, we cannot achieve expertise in information technology without investing in our youth. We would therefore, like to encourage business to support our young people and assist them to join the information superhighway. This can be done in various ways through financial assistance, internships and supporting tertiary institutions.
Ladies and gentlemen, I would like to stress that as a country we are committed to Africa's development.
The continent has become one of our most important trading partners since 1994. However, this trade is not sustainable unless the continent develops economically, socially and politically.
The South African business community has a role to play in this regard by investing in projects in the rest of Africa especially in mining and energy, and in banking and financial areas where we have particular strengths.
In addition to this, there is a need to focus on infrastructure development in the continent. This would be an important way to kick-start the overall economic development and growth in the continent. We cannot have a thriving economy without efficient and effective transport and communication systems. The development of rail, road and sea networks is crucial.
We therefore urge you to keep this in mind when making decisions about how to take advantage of the recovery of our continent. If we succeed to do this, we will be entering the huge market that Africa offers, and also create more business-to-business linkages within the continent.
We all believe that the new initiative offers Africa for the first time an opportunity to leapfrog into the world economy in the appropriate competitive manner.
The emerging African leadership in the continent certainly serves as a guarantee for the success of this initiative, and it is a leadership that business must seriously seek to become partners with.
In conclusion, let me quote from the preamble of the New Africa Initiative document, which sums up how we feel about this programme;
"This new African initiative is a pledge by African leaders, based on a common vision and a shared conviction, that they have a pressing duty to eradicate poverty and to place their countries, both individually and collectively, on a pat of sustainable growth and development, and at the same time to participate actively in the world economy and body politic. The Programme is anchored on the determination of Africans to extricate themselves and the continent from the malaise of underdevelopment and exclusion in a globalisation world".
I wish you all the best for your conference.
I thank you.