_: Your Excellency, former President Chissano,
Honourable Dr Dlamini-Zuma, Chairperson of the African Union Commission,
Honourable Ministers Nkoana-Mashabane and Davies,
Honourable Mr Kaberuka, President of the African Development Bank,
Mr Patrice Motsepe, Chair of the BRICS Business Council and the Distinguished Chairpersons of the respective chapters of the BRICS Business Council,
Distinguished Captains of Industry from our BRICS and African partner countries,
Ladies and gentlemen.
It is a pleasure to welcome you to this important BRICS Business Council meeting. This meeting takes place just a few months after the fifth BRICS Summit held in Durban in March. We extend a warm welcome to our special guests from the BRICS family (Brazil, Russia, India, China and South Africa).
Our visitors have come to these shores just as we are preparing to celebrate 20 years of freedom in just a few months. We will be thanking the international community again for the enormous contribution to the end of racial oppression in our country.
We will be celebrating because we have done well as a country under difficult conditions. South Africa remains an inspiring story of a nation working against all odds to reverse a devastating legacy of a deliberate underdevelopment of the majority.
Census results released last year, tell a story of a country that continues to make progress, despite the global economic difficulties which affect even the most powerful economies. We are making progress steadily even in the face of persistent challenges such as poverty, inequality and unemployment.
Each year we do better with regards to extending services such as quality health care, water, sanitation, electricity, roads and housing. Taking forward our socio-economic development programmes is supported immensely by partnerships for progress, such as the BRICS grouping.
At the Fifth BRICS Summit in Durban, we considered the building blocks that would help us make this crucial forum to move forward. We created two new structures to assist us in formulating a long-term strategic vision for the BRICS grouping, namely the BRICS Business Council and the BRICS Think Tanks Council.
Our intention with the BRICS Business Council is to provide a platform to explore new models and approaches towards more equitable development and inclusive growth in the world. I am therefore particularly pleased to attend the first mid-term meeting of the newly established BRICS Business Council.
I am also delighted to welcome the leading Captains of Industry from BRICS countries as well as from the African continent, including your own South African private sector. As you are aware, the African Union is celebrating its 50th anniversary this year. In this regard, the BRICS-Africa engagement and dialogue signals a new departure and a new avenue to take forward the continent’s development agenda.
The interest in BRICS within the continent was evidenced by the attendance of more than 15 African Heads of State and Government for a dialogue with the BRICS leadership. We remain truly grateful for the support we received from the continent in March this year in Durban.
Ladies and gentlemen,
Indeed, we are all gathered here because we see value in the BRICS partnership in many respects. The strength of the BRICS grouping is amplified by the fact that BRICS countries account for 43 percent of the world’s population, around 18 percent of its GDP and 40 percent of currency reserves, estimated around a trillion US dollars.
Last year, total trade within the BRICS grouping amounted to 6.1 billion dollars representing 16.8 percent of global trade. Thus the presence and influence of the BRICS grouping continues to be felt. We are delighted that the fifth Summit in Durban introduced an element of a partnership with Africa, which we intend to take forward.
As we meet in South Africa again, we must underline that the value of the BRICS partnership for South Africa in particular is also immense, as visible in the bilateral trade relations. In 2012, South Africa`s total trade with the BRICS countries stood at R294 billion, which is 11 percent higher than the 2011 figure of R264 billion.
Total trade with Brazil grew from R18 billion in 2011 to R20 billion in 2012, representing a growth of 11 percent. Total trade with Russia increased from R3 billion in 2011 to R5 billion in 2012, a growth of 45 percent.
Total trade with India, which is South Africa`s sixth largest trading partner, grew substantially from R53 billion in 2011 to R67 billion in 2012, representing a growth of over 26 percent. Trade with China grew by 7 percent, expanding from R188 billion in 2011 to R201 billion in 2012.
All these impressive statistics at all levels should provide you with the determination and confidence to deliver on the imperatives set within the Declaration of the Business Council. There is clearly a lot of potential within BRICS and as business you should take advantage of the opportunities.
I therefore urge you to optimally utilize this platform to consider and advance key issues in the following sectors within the BRICS economies – Infrastructure, Mining and Minerals Beneficiation, the Services sector, Manufacturing, Energy and Financial Services amongst others.
Within South Africa there is a host of opportunities as well. We invite participation in six areas which are; Infrastructure development, Agriculture, Mining and beneficiation, Manufacturing, the green economy and tourism. We are on course to spend in excess of four trillion rand in the coming years, focusing on rail, roads, energy, water, sanitation and the communication sectors throughout the country.
We are already building and refurbishing universities, schools and hospitals around the country. These programmes fall within the ambit of our socio-economic blueprint, the National Development Plan.
Ladies and gentlemen,as we said at the fifth BRICS Summit, Africa is rising and is full of hope and promise. Africa is becoming a remarkable success story which augurs well for the BRICS partnership.
Africa’s output is expected to expand by 50 percent by 2015, resulting in a 30 percent rise in the continent’s spending power. It is becoming well-known as well that the rate of return on foreign investment in Africa is higher than in any other region in the world. This is not surprising given the competitive edge of the continent.
Africa’s advantages include its extraordinary mineral wealth and agricultural potential. South Africa’s own mineral wealth is estimated at 2,5 trillion US dollars. The continent has a young working population and a growing middle class with considerable and growing purchasing power.
South Africa, for example, is essentially a nation of young people. Just over a third of the population is under the age of 15. Africa is poised to make further progress given the focus on improving systems and policies. Under the auspices of the AU we are launching an ambitious Tripartitefree trade area, bringing together countries of Eastern and Southern Africa.
By 2015 we expect to establish a free trade area amongst these countries, combining the markets of 26 countries with a population of nearly 600 million people and a combined GDP of one trillion US dollars. Importantly, this will form the basis for an Africa-wide Free Trade Area, which could create a single market of 2.6 trillion US dollars.
This will enable us to further promote intra-African trade. In these processes, we are playing our part as South Africa and are promoting investments within the continent by South African companies and state owned enterprises. Over the last few years, the South African Reserve Bank approved nearly 1000 large investments into 36 African countries.
These mutually beneficial investments generate tax revenue, dividends and jobs between countries. While we appreciate that our intra-African trade is still marginal, real barriers are not tariffs, but include other factors such as under-developed production structures and inadequate infrastructure.
You will also recall that the historic meeting between BRICS Leaders and African Leaders at the Fifth BRICS Summit was dedicated to addressing this matter of infrastructure development. The African Union Assembly welcomed our initiative and endorsed further future collaboration in this regard.
In my capacity as the champion of the AU’s Presidential Infrastructure championing Initiative, I warmly invite you to collaborate with us in realising the delivery of infrastructure in the continent. We specifically champion the North-South corridor with its particular emphasis on road and rail infrastructure, initially from Durban to Dar es Salaam and ultimately from the Cape to Cairo.
We are pleased that South African State Owned Entities are ready for partnerships and are already busy within the continent. The Development Bank of Southern Africa is intensifying investment into the SADC region by supporting infrastructure projects, particularly in key areas of electricity supply and improving road infrastructure in the region.
Investment by the Industrial Development Corporation in 41 projects across 17 African countries totalled R6.2 billion in 2012. The bulk of these investments are in mining, industrial infrastructure, agro-processing and tourism. As a part of its long term strategy to help secure energy supply for South Africa and the region, our energy utility, Eskom is considering options for investment in several regional generation and transmission projects.
There is a lot of scope indeed for mutually beneficial partnerships within the BRICS community, which will create much-needed infrastructure in Africa. You will recall that another key outcome of the Fifth BRICS Summit was the decision to launch a new Development Bank to address financing for global infrastructure backlogs as this is a priority within the BRICS grouping as a whole.
BRICS Leaders plan to meet again on the margins of the G20 Summit in Russia next month and we will consider the progress report from our Finance Ministers in this regard. I trust that this meeting will provide further impetus to the BRICS-led new Development Bank.
A coordinated foreign currency approach amongst BRICS nations will definitely assist in reducing currency volatility and under or over-valuations, thereby enhancing both trade and investment.
Ladies and gentlemen,
Let me once again welcome the visitors to South Africa and welcome all delegates to the BRICS Business Council meeting.
We congratulate the leadership of this Council for taking the work of the Fifth Summit forward without delay. It is clear that you are ready to take up opportunities brought forward by this unique partnership!
We wish you success and progress.