Johannesburg: Value added trade and its importance in transforming Africa from a “source of raw materials” into a key player in the global economy will form part of the focus of the first BRICS Business Council meeting, which kicks off on Tuesday.
Briefing reporters on Monday ahead of the two-day council meeting, Trade and Industry Minister Rob Davies said investment and the establishment of the BRICS Development Bank will also feature highly on the agenda.
Davies said South Africa placed a special emphasis on value-added trade going into the council meeting. This, he said, was key to creating an environment where South Africa and the continent were not only regarded as a source of raw materials, but were seen as capable of adding value to their products.
“We need to add value to our mineral products [and] our agricultural products… We need to promote a much more value-added economy. We need to do this by integrating our continent [Africa]. We need to consolidate this by a massive infrastructure development programme on the continent,” he said.
The trade ministers of BRICS — an acronym for the Brazil, Russia, India, China and South Africa group of countries — have been meeting over the years, where ways of promoting BRICS cooperation in the areas of the economy, trade and investment are regularly discussed.
“One of the important conclusions that we came to is that we are all industrialising economies, a group of dynamic, emerging economies. As such, we need to promote a pattern of interaction in the area of trade, which supports value-added production in each of our economies,” Davies said.
BRICS trade ministers have started a study on how to promote value-added products, as well as looking at how investment relations can be strengthened.
Davies said that Africa, which was the next growth frontier, needed to set out on a different trajectory over next few years if it was “to consolidate that growth into real development”. The continent needed to industrialise, he said.
South Africa is the only African country that is part of BRICS.
At the conclusion of the fifth BRICS Summit in Durban in March this year, leaders of BRICS agreed to the establishment of a BRICS Development Bank to help finance infrastructure programmes and sustainable development in BRICS and other developing countries.
“We have agreed to establish the new development bank. The initial capital contribution to the bank should be substantial and sufficient for the bank to be effective in financing infrastructure,” President Jacob Zuma said at the time.
Government has looked favourably on the groundwork which has been done so far, and continued its role in the establishment of the bank.
“We think that there is a massive investment challenge, which faces all of us in BRICS and also South Africa as part of the African continent. Those are our key priority areas: value-added trade, investment relations and the establishment of the BRICS Development Bank,” said Davies, adding that he could not go into the details of the work already done.
South African chairperson of the BRICS Business Council, Patrice Motsepe, said the three areas highlighted by Davies were a crucial point of discussion.
He said that in the BRICS’ mandate, mutual benefit was also an important factor for the BRICS countries. Motsepe expressed confidence in the upcoming talks.
“We don’t want discussions that are theoretical or academic,” he said, noting that specific projects have been identified for discussion.
“For us, it’s to focus on value-added exports, the processing of products and manufacturing in South Africa. I’m confident that in the next few years, you will see a change in the quality of trade that has been taking place between SA and Africa, and the rest of the BRICS countries.
“From a South African perspective… we need to create jobs for our people. We need to create opportunities for improving the standards of living for our people,” he said.
South Africa was looking forward to the interaction with the council, Motsepe said.
The council, which was established at the March summit, exists in order to develop and grow business, trade, manufacturing and investment ties among BRICS countries, and BRICS countries and Africa.
The five delegates from the BRICS countries will meet today ahead of tomorrow’s proceedings, which will be held at the Sandton Convention Centre.
“We look forward to wisdom and advice and concerns, if there are any from the council,” said Davies.
President Zuma is due to address the first BRICS Business Council tomorrow.