SUSTAINED economic growth may be elusive in Asia, the Americas and Europe, but the emerging consensus is that Africa is rising.
From 2000 to 2010, six of the 10 fastest-growing economies in the world were in Africa. The International Monetary Fund (IMF) forecasts that the number will increase to seven in 10 in the first half of this decade.
No country plays a bigger role than South Africa in shaping the continent’s economic future. Accounting for a quarter of Africa’s gross domestic product (GDP), it is the dominant market on the continent. It also serves as the gateway to a dozen neighbouring nations with a collective population of 160-million, altogether accounting for more than 40% of Africa’s GDP.
While South Africa’s recovery from the global economic crisis of 2008-09 has lagged behind the African average, projections show the pace picking up, with the IMF forecasting growth to reach 3% in 2013.
But just as important as South Africa’s role as an engine for growth is its role as a catalyst for economic reform. It can model growth-minded reforms throughout Africa, given its active role in regional and multilateral forums such as the World Trade Organisation and Group of 20.
Of course, even in the most forward-looking place on the continent, there are very real social and economic challenges: high unemployment, income inequality, the so-called brain drain of skilled South Africans leaving the country and the continent, and the persistence of isolating policies, even as the country’s economic future depends on having an open trading and investment environment. How these issues are addressed will be critical factors in South Africa’s development.
In South Africa, as in the US, social issues are made worse in times of economic contraction or, conversely, improved by an expanding economy. Even incremental increases in economic opportunity create options for social progress.
Trade is by definition a two-way street. The US has much to gain from expanding our commercial ties with South Africa. Beyond the obvious need for expanding trade with markets that are growing, building a strategic alliance with South Africa can only help in establishing a stronger presence for the US in Southern Africa.
While China, India and others are already increasing their presence on the continent, we are not too late if we act with determination and commitment. The US is still the country many Africans want to imitate in terms of innovation, freedoms and economic opportunity. It can build on that interest if it works with South Africa to enhance collaboration in areas such as infrastructure, banking, e-commerce and the life sciences — sectors where US companies have much to offer.
In Washington, the US Chamber of Commerce is taking action by launching the US-South Africa Business Council to enrich investment and trade between our two countries, to serve as a platform for commercial engagement at senior levels of business and government, and to enhance investment in Southern Africa by US and South African companies.
The council will focus on:
• A growth agenda to reauthorise the African Growth & Opportunity Act, ahead of its 2015 expiration date, and with the full and continued inclusion of South Africa, to capitalise on the 300,000 jobs already created in Africa and increase in US-bound exports.
• Discussions with the US government, South Africa and the Southern African Development Community region to work on opening a trade and investment initiative.
• Continued clarity and increased consistency on the scoring of the equity equivalency requirement of black economic empowerment.
• Encouraging South Africa to work with the US on ensuring the strongest support for intellectual property rights and enforcement of laws pertaining to such rights.
• Easing of labour broker laws, allowing US companies to hire temporary workers for short- and medium-term projects that will support growth in South Africa.
Success in each of these areas will drive South Africa to new levels of development, with ripple effects across the region. Africa is growing even while the rest of the world is slowing down. We must find opportunities, create jobs and growth for both the US and South Africa — and indeed, for the entire African continent.
Africa is rising. South Africa will be the hub of growth and regional development. US businesses intend to be players — and partners — in that development. Our work begins today.
• Brilliant is senior vice-president for international affairs at the US Chamber of Commerce.