Partner with Africa
THE government and business community should focus on building trade relations with leading economies in Africa.
This will help South Africa to benefit from China's economic growth of 8.3%.
Yesterday Standard Bank Group economist Jeremy Stevens presented his report on the impact of China's growth in Africa.
"If the Chinese economy went down, the rand would be hurt, probably depreciate by 23%. Equity-stock prices will fall and credit will increase," Stevens said.
"And you are likely to see our exports and the price of our commodities fall because China is the biggest consumer of our and the world's commodities," Stevens said.
This would result in job losses in South Africa he said.
He said trade between South Africa and China had been growing at 21% since early 2000, but South Africa had to change its methods to sustain this growth.
"The most important economies in Africa, with the biggest markets, economic growth and regional presence, are Nigeria, Egypt, Kenya and Angola," he said.
"They are rich in resources with fast-growing markets and are important for South Africa's economy in the long-term.
"We need to partner with those countries for South Africa's long-term benefit. I am not convinced that that is how we see our role in Africa, which concerns me because the rest of the world is looking at Africa as an important future market.
"We see more interest in Africa from the US, UK, China, India, Brazil and Russia in doing business in Africa. South Africa should be at the forefront, given our strong commercial footprint, strong corporates and long history in the continent," he said.
"We seem to be looking at markets outside Africa, whereas if we want a strong commercial engagement, we need to focus on key markets.
"We have stuck to our geography in SADC, rather than the larger markets in the continent," Stevens argued.
He said the main bottlenecks were a lack of skills, financial resources and poor infrastructure.
"These make it difficult for us to become cost competitive, even though we have low wages. We must find ways to overcome those issues."
He said both the government and business should use revenue from commodities to address the bottlenecks. - firstname.lastname@example.org