SOUTH AFRICAN CORPORATE EXPANSION INTO THE REST OF THE CONTINENT AND POST-APARTHEID SOUTH AFRICA’S FOREIGN POLICY GOALS: CONVERGENCE AND DIVERGENCE.
Briefing to the Committee on Foreign Affairs, Parliament of
the Republic of South Africa, Cape Town August 16 2006[1]
(Presented by Francis Nguendi Ikome, PhD. Senior Researcher, Institute for Global
Dialogue (IGD) Midrand, Johannesburg).
(I) Introduction and background
South Africa’s infamous policy of
apartheid resulted in the country being isolated and sidelined in continental
economic and political processes for decades. With the end of apartheid and the
readmission of the country into global and continental body politics in 1994,
expectations both from within and outside the continent were that it would play
a lead role in efforts to uplift the continent from near-perennial economic and
political difficulties. The new African National Congress (ANC)-led government
probably guided by memories of the support accorded their movement by African
governments during the years of the liberation struggle and also conscious of
the implications of persistent poverty, underdevelopment and conflict in
proximate neighbourhood on its own development, saw the future of the new South
Africa as being inextricably linked to the future of the rest of the continent.
Understandably, the foreign policy pronouncements of the ANC leadership
emphasised the need for greater ties with the rest of the continent, placing
Africa at the centre of the new South Africa’s foreign policy. Despite these
policy pronouncements, and the acknowledgement that South Africa must play a
leading role in both the political and economic revival of the continent, the
country’s engagement with the rest of the continent since the end of apartheid
has been contentious.
Both South Africa’s political and
economic roles in the continent have been subjects of controversy. However, it
would seem that SA’s economic forays in the continent have been more
contentious than its political engagements. Broadly speaking, perceptions are
that South Africa’s domestic political and economic structures are too aligned
to those promoted by the global neo-liberal order and therefore that, any
economic or/and political framework championed by South Africa is most likely
to promote the global liberal agenda which ignores African realities and the
continent’s most urgent needs. More directly, South Africa is perceived as
harbouring intentions to dominate the rest of the continent both politically
and economically because of its acclaimed domestic political transition and its
comparatively advanced and thriving economy. South Africa’s increasing
engagements in continental politics, particularly in its peace diplomacy,
together with the penetration of its businesses into the rest of the continent,
have brought to sharp relief the tensions that exist between South Africa’s
foreign policy pronouncements and the difficulty of translating them into
reality. More importantly, it has brought into the fore the tensions that exist
between South African business interests and its idealistic benevolent foreign
policy inclinations towards the continent. Questions have arisen as to whether
South African corporate interest and behaviour advance or impede the
realisation of South Africa’s African policy. Some have even sought to
establish a link between South Africa’s peace diplomacy and its continental
multilateral institution building on the one hand and the country’s economic
interests represented by its corporatists on the other.
Within this background, this brief
seeks to appraise the extent to which South African investments in the
continent advance or impede the realisation of the goals and objectives of the
country’s foreign policy in the continent. Does South African business perceive
itself as being in a position to advance the foreign policy goals of the
country? Put differently how much influence has the articulated South African
African foreign policy on South African business in the continent? What for
example has been the behaviour of South African business in the continent and
has this behaviour converged with or diverged from the articulated SA foreign
policy? What are the perceptions about the conduct of SA business in the
continent and how founded or unfounded are they? Can the South African
government influence/control unbecoming corporate behaviour in the continent?
Is there a link between South Africa’s peace diplomacy/continental multilateral
institution building and SA business penetration of the continent or are they
independent of each other? Finally, how can SA better manage its corporate
engagements in the continent, to better align them to its foreign policy goals?
(II) Key elements of post apartheid
South Africa’s African foreign policy
Immediately
after assuming power in 1994, the ANC government was keen on restructuring the
country’s relations with its immediate neighboughs of the Southern African
region and the broader continent in a manner that would differentiate it from
the successor apartheid regimes – shifting away from a hegemonic and
destabilising pattern of interaction to a stabilising pattern of interactions,
based on equal partnerships. This inclination was reflected in declarations by
key ANC figures that placed particular premium on pursuing mutually beneficial
relations and regional development.
The ANC’s early 1990s policy
documents reflected this pro-African foreign policy thrusts by stating that
“the fate of democratic South Africa being inextricably bound up with what
happens in the rest of the continent’ [and that] our foreign policy should
reflect the interests of the continent.”
A decade on, it would seem the governing ANC’s position has remained
consistent and that it has sought to develop a non-coercive, non hegemonic
relationship with the rest of the continent. The most concrete expression of
this disposition in found in the themes and principles that underpin the
African union and the NEPAD, two processes whose crafting was greatly
influenced by South Africa. It is also found in South Africa’s increasing
involvement in efforts to resolve Africa’s conflict – in what has come to be
known as south Africa’s peace diplomacy – where rather than try to impose its
will, it has sought to facilitate dialogue – in what has come to be known as
quiet diplomacy. Yet others have contended that a more critical appraisal of
South Africa’s re-entry into continental processes would suggest that even its
otherwise benevolent efforts, have a hidden agenda – consisting of dominating
and controlling the continent economically and politically. Therefore, both
South Africa’s political and economic penetration of the continent has been
perceived as disguised forms of exploitation for the country’s sole national
interest. South Africa’s corporate
penetration of the continent has received the most attention in this regard.
(III) SA’s corporate expansion into
the continent: sources, extent, nature, perceptions and sources of perceptions
(a) Sources of South Africa’s corporate
expansion
By the early 1990s, it had become obvious that the
demise of the apartheid system in South Africa would herald an era of South
African corporate expansion into the rest of the continent. However, it was
difficult to predict the pace of this expansion and the shape and form it was
to take. It was equally difficult to anticipate how the rest of the continent
would react to it. What mattered at the time was the fact that, a non-racial
and democratic South Africa, was to become a force to reckon with in Africa, in
a post Cold War complex global environment.
It is noteworthy though that it is not only South
Africa’s near miraculous political transition to democracy and the
international respectability that came with it that fuelled its economic
penetration of the economies of the continent. Other ‘push and pull’ factors
included: the fact that South Africa’s transition coincided with the end of the
Cold War and the associated demise of the state-led economic models and the
triumph of the neoliberal alternative (Daniel, Naidoo and Naidu, p. 368). The
neoliberal model emphasised market deregulation, privatisation, open capital
markets and unfettered integration into the global economy as the most
effective means to achieve economic development (Ibid).
Governments the world over, including those in Africa
were forced to align their political and economic systems to this new world
order. This saw the relaxation of trade barriers and the adoption of laws
facilitating investment flows. Despite these reforms, Africa remained an
unpopular destination for Western capital that was increasingly directed
towards the former Soviet satellite states and to South East Asia. Having been
cut out of the world system for sometime, particularly during the last fifteen
years before the final demise of apartheid, South African corporates had a
surplus of capital to invest, and were quick to take advantage of the
weaknesses of the economies of the rest of the continent. Therefore, it was a
combination of the character of the South African transition and its relations
to the rise of the neoliberal economic paradigm that encouraged market
penetration, which enabled South African business to capture, and in some
instances, monopolise African markets (Ahwireng and McGowan, 1998a, 18998b in
Daniel, Naidoo and Naidu, p. 374).
(b)
Extent
and character of SA corporate expansion into the continent
Post apartheid South Africa’s
economic expansion into the continent after the first decade has been found to be
rapid and extensive. This has created perceptions and concerns about South
Africa’s real intentions and designs in the continent with some concluding that
South Africa harbours hegemonic imperialist designs in the continent.
South Africa’s economic penetration
of the continent has been in two main areas: the first is that Africa has
emerged as an important export destination for South African products; and the
second is that South African capitalists have become directly involved in the
continent by way of mergers, acquisitions, joint ventures and new ‘greenleaf’
investments (Daniel, Naidoo and Naidu).
With regard to the former, economic
indicators show that South Africa’s export trade with Africa has grown
significantly since the end of apartheid, with Africa emerging as the country’s
fourth largest export destination by region. It is even expected that with the
restoration of peace in Angola, and with prospects of peace in the Great Lakes
region, particularly in the DRC, more investment and trading opportunities
would be opened to South African business.
What is even more important is the
imbalance in the south African-African trade relationship and the extent to
which South Africa dominates the African economy. South Africa enjoys a trade
surplus with each of its trade partners. Fore example, in South Africa’s R
20,3-billion trade with the members’ states of the SADC in 1999, 17 billion
were exports to the region and only 2.6 billion in imports from the region.
This translated to an imbalance of approximately 7:1. Worse still, this
imbalance rose to 8:1 in 2000 and by 2001 it stood at 9:1 (Business Report,
19.06.02 cited in ibid, p. 376). This trade imbalance is even bigger in the
case of South Africa’s trade relations with some individual SADC countries like
Angola where it is estimated at about 22:1 in 2002. Even more concerning is
that these imbalances are likely to increase in the foreseeable future.
In relation to the broader
continent, the balance of trade is also in favour of South Africa. For example,
in 2001 South Africa’s total trade with the rest of the continent, excluding
SACU, amounted to $856 million in imports and $ 3.7 billion in exports,
translating to an imbalance of nearly 5:1. This favourable balance arguably has
justified the South African Department of Trade and Industry to establish trade
offices in a good number of African countries – including Angola, Egypt, Cote
d’Ivoire, Kenya, Tanzania, and Zimbabwe. The DTI’s interest in Africa is in
spit of the fact that in overall comparative volume terms, the European Union,
the North American Free trade Area (NAFTA) and the China-Japan-Malaysia-Singapore
axis remain much more important than the African market. This is due to the
constraints of the smallness and poverty of the African market (Daniel, Naidoo
et al. p. 375). Yet it is the very fact of the smallness of African markets
that makes South Africa’s ever-increasing shares in them very worrying to local
actors – who find themselves increasingly threatened in already sufficiently
small markets.
In relation to the latter –
“acquisitions, mergers, joint ventures and ‘greenfeild’ investments” the speed
and spread of South African businesses in the continent is such that some have
qualified South Africa’s corporate expansion as amounting to the ‘South
Africanisation’ of the African economy. Good examples include: South Africa’s
running of the railroads in Cameroon, their control of the telecom in Lesotho,
and being the leading provider of cell phone services in Nigeria, Uganda,
Tanzania, Rwanda and Cameroon. They are also involved in the management of
power plants in Zimbabwe, Zambia and Mali and are building roads and bridges in
Malawi and Mozambique. As a matter of fact, almost every sector of the South
African economy is operative in the rest of the African market – including
banking, breweries, supermarkets, hotel management and providing TV programming
to over half of all African states (See Ibid, p. 375-379). South Africa,
according to and UNCTAD report of 2002, has emerged as the continent’s largest
source of foreign direct investment (FDI). And as far as SADC is concerned,
South African FDI into the region amounted to about $5, 4 billion, higher than
the combined UK and US FDI injections into the region during the period
1994-2000.
An important feature of this South
African expansion has been the fact that six key sectors of the SA economy,
namely: mining, retail, construction/manufacturing, financial services,
telecommunications, tourism and leisure have worked in tandem to securing South
African investment throughout the continent (ibid, p. 380).
Yet another feature of South
Africa’s penetration of the African economic has been the promotional
role-played by the state through such entities as the industrial Development
Corporation (IDC), which not only provides funding but also shares the risk by
taking a direct stake in some projects. For example the IDC had a 25 percent
interest in the ‘Mozal project’ in Mozambique. The envisaged IDC portfolio of
Africa projects includes 60 projects in 21 African countries, spanning from
Egypt and Algeria in the North to Nigeria and Senegal in the West, Sudan, Uganda,
Kenya, Tanzania, Malawi and Swaziland in Central and Southern Africa (Business
Day 26.09.02 cited in Ibid). Meanwhile by providing export finance, the IDC has
facilitated the growing participation of South African industry in projects
throughout the continent (ibid, p. 381).
A further characteristic of the
investment pattern of South African business has been the targeting of Africa’s
generally underdeveloped infrastructure – which has translated into a real boom
for South African contractors. The key players here include: Eskom Enterprises
and Transnet, with Transnet being the bigger investor, particularly with its
falgship venture of developing an energy grid across Africa – from the Grand
Ingam Falls in the DRC.
It is clear from the foregoing that
South Africa’s corporate penetration of the continent has been enormous. This has elicited concerns about the real
intentions of South Africa in the continent – that is increasingly perceived as
gradually taking over the African markets from both the locals and traditional
Western investors.
(c) Perceptions and realities about
SA corporate behaviour
Some have argued that South Africa’s foreign economic
strategy in the continent has largely been shaped by mercantilist interests
that sometimes contradict expressed commitment to pursue mutually beneficial
relations and promote balanced development in the sub-region and the broader
continent (see Qobo, p.2). This has fed into perceptions that the country seeks
to play a hegemonic role or that it harbours hegemonic ambitions (ibid).
Moreover, many South African companies in the continent come across as
arrogant, disrespectful, aloof and careless in their attitude towards local
business communities, work seekers and even governments, former South African
Minister of Public Enterprises conceded in early 2004 (see Bond and Kapuya,
2006: 30). The sources of these perceptions have been varied and whether or not
they are founded has been a subject of heated debate.
(d)
Sources of perception (see Grobbelaar)
-
South African business style: Too business-like and lacks
the kind of personal relations, particularly with the political elite that has
been the pattern in the continent; there have been allegations of arrogance,
racism and even corruption. For example, in 2002, the United Nations Security
Council accused a dozen South African companies of illegally looting the DRC
during the 1990s turmoil, which left an estimated 3 million Congolese dead, an
action that unfortunately went unpunished by the South African government (Bond
et al. p. 30);
-
On their part, many South African companies complain that
the majority of the countries of the continent do not fully appreciate the
needs of the private sector, particularly at the level of lower rungs of the
bureaucracy;
-
Additionally, defenders of Pretoria’s business have argued
that South Africa is not a traditional aid donor as is the case with African
countries’ traditional foreign investors from the West. Therefore, the
essential ‘sweetener’ that traditional smoothing investment is lacking in the
South African-Africa equation. A caveat is in place here however, in that some
big South African companies have been able to provide some sweeteners.
-
South Africa’s ‘unfair’ competitive advantage: This is
indeed the primary source of the negative perceptions about South African
investments in the continent, particularly fuelled by the country’s huge trade
surplus in its dealings with the rest of the continent as shown earlier. Only a
few African countries enjoy a marginal trade surplus with South Africa –
Nigeria and Egypt. Although South Africa’s investments into the region is
supposed to compensate for this huge imbalance, much of the profit made is
repatriated back to Johannesburg or to the headquarters of these companies in London
and Western metropolis, with little left in terms of the social advancement of
the host countries. This is in spite of the fact that South African firms
provide jobs and probably better salaries to some nationals of their host
countries. Therefore, the solution in the minds of critics of Pretoria lies in
its opening its markets to the rest of the continent.
-
The behaviour of individual companies: The behaviour of
individual companies, especially large corporations involved in strategic
sectors of national economies often has significant impact on the way South
African business is perceived. In this regard, while Anglo gold’s acquisition
of Ashanti Goldfields, Ghana’s national pride has contributed positively to the
image of South African business; the saga that surrounded the withdrawal of
SABMiller’s Breweries from Kenya had the opposite effect.
-
Unintended effects of South African policies: such as the
sourcing of inputs locally from South Africa and not from the host country; the
encouragement of the transfer of good functional business skills; and more
importantly, the impact of domestic South African policies relating to its tax
regime have not helped matters.
In light of the foregoing the
question then arises as to whether South Africa’s corporate expansion advances
or impedes the realisation of South Africa’s Africa policy.
(IV) SA corporate expansion and SA’s African
foreign policy: convergence and divergence
Like business anywhere, the South African business sector
is driven by typical corporate interests – profit, market share, the
elimination of competition, the urge to dominate and to monopolise. Accordingly
and in contrast to the altruistic posture of the overall South African Africa
policy, South African business expansion into the continent is not altruistic.
Rather their expansion into African economies is directed by profit motives.
And in pursuit of profits, South African companies like companies from other
countries have unfortunately not acted like saints, neither have their host
countries wholeheartedly embraced them. Sadly though perceptions about the
profit motives of South African business seem to have affected and structured
attitudes towards South Africa’s overall foreign policy towards Africa, with
some contending that contrary to SA official rhetoric of partnership with the
rest of the continent, its real design is to dominate and exploit the continent
for its own narrow national interest, in a manner akin to western imperialism.
The question therefore arises as to whether the officials in Pretoria have
acted in ways that support the conduct of their businesses in the continent or
could it be said that SA business is wholly separate from the country’s foreign
policy goals.
Despite Pretoria’s insistence that its post-apartheid
economic engagement with the rest of the continent is premised on mutually
beneficial relations, it would seem that Pretoria has acted in tandem with its
domestic capital to promote mercantilist interests by for example facilitating
SA business penetration of African markets, and flooding them with South
African goods and services (Qobo p. 13). Yet some analysts like Daniels, Naidoo
and Naidu, have argued strongly that a distinction needs to be drawn between
the behaviour of South Africa’s corporates and its government. However, the
divergent inclinations of the South African Department of Foreign Affairs and
that of Trade and industry highlighted earlier, suggest that the conduct of
South African business In Africa is in part a product of the lack of
coordination between Pretoria’s departments (this line of thought would be
pursued further in the following sections on South Africa’s diplomacy and the
possibilities of government influencing corporate behaviour).
(V) SA
peace diplomacy and SA corporate penetration of the continent: linkages and
parallels
Politically, South Africa in the post apartheid era has
transformed itself from a pariah to a peace crusader. Not only has South Africa
emerged as one of the key mediators and contributor to efforts to resolve
Africa’s numerous and usually intractable conflicts, it has also been very
instrumental in crafting continental mechanisms aimed at removing some of the
sources of Africa’s conflicts and also those designed to provide continental and
regional responses to such conflicts when they occur. South Africa’s peace
diplomacy, as the country’s involvement in peace efforts in the continent has
come to be known has been a welcome development. It has helped bring some
stability in Burundi, it has contributed in preventing the situation in Cote
d’Ivoire from boiling over to a full-blown civil war, it has and continues to
contribute to bring about democracy and lasting peace in the DRC, it has been
very vocal about the situation in the Sudan and Somalia. In spite of these
invaluable contributions to peace efforts in the continent, voices have been
raised that SA’s peace diplomacy has been directed at paving the way for its
corporate penetration of the economies of these countries in conflict. Put simply,
perceptions are that South Africa’s involvement in resolving Africa’s conflicts
is not as altruistic as officials in Pretoria would want to make believe.
Rather, it is felt that Pretoria’s forays into Africa’s numerous conflict spots
are aimed at facilitating the expansion of its businesses into the continent
and by default to dominate the continent economically. According to Naidoo and
Naidu, “peace in Angola and the prospects of peace in the DRC will open up
massive opportunities for South African capital so that one can anticipate that
Africa’s share of South Africa’s overall export trade will continue to
climb’(cited in Qobo, p. 13-14). South African foreign Affairs officials have
remarked on many occasions that the DRC holds “enormous economic potential for
south Africa’s private sector in general and the mining sector in particular
(Ibid. p. 14, note 41).
The believe that the South African government supports or
is intent on facilitating the expansion of its business into the continent has
been further strengthened by the emerging pattern of including powerful
businessmen in delegations of South African government officials visiting
African countries that are perceived to harbour enormous economic potentials,
particularly countries where South Africa has been involved in brokering peace.
In the case of the DRC, during a state visit to the country by president Mbeki
in January 2004, during which he was accompanied by a delegation of South
African businessmen, including some 20 senior executives, a landmark
cooperation pact was signed between key South African business interests and
the government of the DRC. The Memorandum of understanding reached between the
SA BEE company – Mvelaphanda – guarantees investments, over a ten years period,
in the areas of processing gold tailings, copper and cobalt mining, road
construction and property acquisition (see Zimbabwe independence, cited in
Qobo, p. 14). On the sidelines, South Africa and the DRC signed a bilateral
agreement worth US$ 10 billion covering defence nd security, the economy and
finance, agricultural and infrastructure development (See BBC cited in Qobo, p.
14). And according to Qobo, this is an expression of clear linkages between
South Africa’s foreign policy interest in enhancing political relations and
stability on the one hand and the logic of specific interests in society.
Yet others would argue that South African corporations,
such as Anglo-American, have had long-standing holdings and investments in the
continent, and have even made inroads in countries that are not necessarily in
conflict – like Anglo-Golds acquisition in Ghana. Importantly also, South
African farmers have maintained a presence in areas as remote as Botwsana’s
far-western Ghanzi district. Moreover, South African investments in and
promotion of tourism in Malawi, Mozambique, and Zimbabwe, for example, in some
respects is simply a resurrection of pre-independence patterns. What is
occurring is in some cases, is simply the normalisation of historic regional
economic patterns and trends which have always been particularly beneficial to
South Africa (Black and Swatuk, 1997). Whatever the case, there is evidence
that South African business has used the good image of the country to advance
their business interest in the continent, including South Africa’s image as a
peace maker.
(VI) Can
the SA government influence corporate behaviour outside its territory?
To expect that South Africa’s economic engagements with the
rest of the continent would be essentially benevolent and that the South
African government would be able to give its corporate operators directives to
this effect would be myopic indeed. It reflects not only a lack of
understanding of the depth of the economic challenges and pressures that South
Africa has to contend with, but also ignores the realities of the workings of
capital, particularly in the post Cold War world, dominated by liberal market
ethos. Post- apartheid South Africa has had to simultaneously reintegrate the
country into the international political economy after years of isolation,
while at the same time striving to achieve the government’s stated
developmental agenda both nationally and regionally (in the continent). While
there is nothing inherently contradictory between these two tasks, their simultaneous
pursuit has created some interdepartmental tensions in Pretoria – the
departments of foreign affairs (DFA) and that of trade and industry (DTI) –
that appear to hold different sets of visions about the country’s foreign
policy.
The DFA has sought to use South Africa’s external
relations, particularly in the sub-region and the entire continent to improve
the country’s apartheid informed image and by forging mutually beneficial and
non-hegemonic relations with the continent. It has also sought to emphasise its
membership and contribution to various sub-regional and regional multilateral
institutions, demonstrating a deep sensitivity to perceptions of arrogance and
hegemonic ambitions against it. Conversely, the DTI has been seen as having a
penchant of going overboard to pursue commercially driven interests, at times
at the expense of neighbouring countries. The content of its engagement in the
continent has been found to reflect strong mercantilist instincts that have
tended to inflame suspicions against South Africa. The DTI seem to be
suspicious that neighbouring states are looking forward to forging ‘parasitic
relations’ with South Africa, rather than mutually beneficial ties. Overall, it
could be argued that while the DTI pursues what appears to be South Africa’s
parochial market access agenda, the DFA seems to seek to advance the broader
African interest as underpinned by the AU and the NEPAD (see Draper and
Khumalo, 2004:16).
The DTI’s strategy that appears to be some form of
hard-edged protectionism appears to be informed by the fact that the DTI is
very much beholding to powerful economic actors in the domestic sphere,
including labour, export oriented business interests, and import-competing
sector of the economy. This it would seem is pursued alongside considerations
for domestic stability with respect to economic adjustments and sustaining job
creation. (Qobo, p. 9). In this regard, South Africa’s behaviour in the
continent, particularly as pertains to its trade relations, could be partly
explained in terms of the influence of its domestic capital and trade unions on
state strategies. All of which give the country a hard neo-mercantilist
character and a flavour of a hegemonic actor, out for what it can get than what
it can contribute to regional development (ibid).
Yet another strand of constraint on South Africa’s
engagement with the continent is found in the contradictions that define the
country’s foreign policy: on the one hand, given its diverse economy and
diverse interests, it seeks to integrate closely with the global economy; and
on the other hand, there are pressures to engage meaningfully and progressively
in developing the proximate region – sub region and continent – if South Africa
is to sustain its own growth (Qobo, p. 11).
This not withstanding, the South African government has
been making efforts to indirectly guide, though not direct the behaviour of its
business in the continent. In this regard, efforts such as the establishment of
Bi-National Commissions, emphasis on regional integration, and initiatives such
as the NEPAD, including of course the practice of including business
delegations in official state visits, rather than being construed as
facilitating the exploitative expansion of SA business, should be seen as the
South African indirect way of trying to give direction to its corporate
interests, to better align them to its continental foreign policy objectives.
(VII) SA multilateral institution
building and SA corporate interests: NEPAD as SA’s economic window into the continent?
Given the central role played by President Mbeki in
the crafting of the NEPAD, and in light of the programmes emphasis on issues of
governance, including its tacit approval of the controversial neoliberal global
economic agenda, the NEPAD has come across and a largely South African inspired
programme. It has been seem by many as South Africa’s window into continental
policy-making process, particularly intra-African economic relations. The
liberal economic agenda prescribed by the NEPAD has been interpreted by many as
consisting of the South Africa’s attempt to create a soft entry for its vibrant
capital into continental markets (see Bond et al). For example, it is believed
that the NEPAD private infrastructure investment strategy is of particular disproportional
benefit to South African contractors. South African retailers are perceived as
de-industrialising many African countries as a result of the practice of
sourcing their goods from Johannesburg instead of local producers.
Importantly also, the NEPAD’s governance agenda has
been seen as serving South African business interest in the long run, in that a
peaceful continent would definitely offer greater opportunities for South
African investors. It is also one area in which South Africa’s foreign policy
pronouncements and its corporate interests converge. In this regard, by
striving to resolve the problems of poor governance that have held back
Africa’s economic progress, would be actualising it commitment for mutually
beneficial relations with other African countries while at the same time
creating a conducive environment for its business.
(VIII) Recommendations
In light of the foregoing, the Committee should
consider the following recommendations on how to improve on SA’s economic
engagements with the continent:
-
Working
on perceptions and influencing corporate behaviour is imperative for the
improvement of South Africa’s overall engagement with the rest of the continent
-
Strive
to assist the South African government departments directing the country’s
engagement with the rest of the continent, particularly the DTI and the DFA, to
harmonise their African policy positions;
-
Be
more sensitive to host countries’ sensitivities and to strive to address some
of their justified concerns, particularly those relating the unbalanced trade
and sourcing of inputs from South Africa rather than from the host country;
-
Sensitisation
of both domestic and regional role players on (i) the requirements of the
private sector in a liberalised global economy; and (ii) the importance of
probing up the less viable African economies beyond pure profit considerations;
-
Sensitise
the domestic public on the potential long-term dividends of South Africa’s
involvement in the continent – particularly in peace missions. This will remove
some of the pressures the government currently receives from the public,
especially from labour that perceives South Africa’s involvement in the
continent as a waste of tax-payers resources