DE KLERK OPTIMISTIC ABOUT THE FUTURE OF AFRICA - AND ABOUT SOUTH AFRICA'S ROLE IN AFRICA

In a speech to the Process Expo at Nasrec this morning, FW de Klerk questioned the tendency to be pessimistic about both South Africa - and Africa. He said that he wanted to address "these Prophets of Doom and Afro-Pessimists in a balanced way".

He conceded that South Africa was once again experiencing serious international perception problems. Foreign observers were worried about the role of radical trade unions and were also concerned about the Marikana incident and farm strikes in the Western Cape. These developments had a negative impact on foreign direct investment, which had fallen by 43.6% in the past year.

De Klerk said that it was nevertheless important to retain balance in one's assessment of South Africa - and informed his audience of the progress that had been made since 1994:

• After decades of isolation South Africa had emerged as a respected member of the international community;
• the country had experienced 18 years of economic growth - interrupted only briefly by the global crisis of 2008; and
• it had also made substantial social progress with regard to poverty alleviation, housing and access to water and electricity.

International observers were constantly reminded of South Africa's failures. However,

• its reporting standards and regulation of its security exchanges were the best in the world;
• its banks were the second soundest in the world and its corporate boards were the second most efficacious.
• South Africa also scored well in a number of critical areas - including its legal rights index; investor protection and the quality of its management schools.

"Where we score badly is in those areas of national activity that fall under the responsibility of government. We are in the bottom 20% with regard to the quality of education; the business cost of crime; HIV prevalence; and labour market efficiency."

According to De Klerk, the good news was that government was aware of these problems and had adopted the National Development Plan to address them.

De Klerk said that he was also optimistic about South Africa's future "because of the excellent foundation that our non-racial constitution has created for present and long-term stability."

De Klerk said that he was also increasingly confident about the future of Africa. Pessimists tended to focus excessively on the slow progress that Africa was making in resolving conflicts and promoting democracy. They also pointed out that Africa continued to lag far behind the rest of the world in terms of human development, education, competitiveness and corruption - and that the continent was still too dependent on foreign aid.

De Klerk insisted that observers should also take into account "the continent's vibrancy, its enormous potential and its growing strategic importance".

• According to the World Bank, economic growth in Sub-Saharan Africa was likely to reach more than five percent on average in 2013-2015 as a result of high commodity prices worldwide and strong consumer spending on the continent.
• Total African GDP was expected to reach US$2.6 trillion by the year 2020.
• The region would remain one of the fastest growing in the world. In 2012, about a quarter of African countries grew at seven percent or higher and some were among the fastest growing in the world.
• Consumer spending, which accounts for more than 60 percent of Africa's GDP, remained strong in 2012.
• Africa had the fastest-expanding labour force in the world - with more than 500 million working age people.
• The number of cell phone users on the continent grew from 11 million in 2000 to almost 400 million today. Undersea data cables were currently being laid at an unprecedented rate, providing exponential bandwidth growth which would drive communications and internet access, particularly through mobile devices.
• According to KPMG, rapid urbanisation on the continent was increasing demands for infrastructure investment. Current infrastructure expenditure of about US$45 billion a year was less than half the required amount.
• In 2012, net private capital flows to the region increased to a record $54.5 billion; while foreign direct investment increased by 5.5 percent in 2012 to $37.7 billion.
• France and the United States were still the largest investors in Africa, with Britain in third place and Malaysia in fourth, followed by South Africa, China and India.

"The central reality is that sub-Saharan Africa constitutes one of the largest areas of under-developed real estate in the world. There are about the same number of people in its 24 million square kilometers than there are in the 3.3 million square kilometers of India."

De Klerk also believed that South Africa would increasingly be regarded as the gateway to Africa.

• There had been a dramatic shift toward Africa in the orientation of South African manufacturers. 50 respondents to a recent Manufacturing Circle Survey reported that they were now exporting more to Africa than to traditional markets in Europe and to the BRICs economies.
• South Africa was currently involved in negotiations for a trilateral free trade agreement (T-FTA) between the members of the Southern African Development Community, the East African Community and the Common Market for Eastern and Southern Africa. "This would link the markets of 26 countries with a population of nearly 600-million people and a combined gross domestic product of $1-trillion."
• South African direct investment in Africa had increased at four times the rate of overall South African foreign direct investment since 1994. Total South African direct investment in Africa increased from R3.8bn in 1994 to R115.7bn in 2009, or by 31 times. It now constituted more than one fifth of the country's total overseas foreign direct investments.

De Klerk concluded that "Africa and South Africa are on the march." "Although South Africa and Africa continue to wrestle with enormous problems I believe that we should shift our attention from the Prophets of Doom - to the profits that can be earned by becoming involved in one of the most exciting growth prospects in the world."

Statement issued by the FW de Klerk Foundation, May 21 2013

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