South
Africa: Gateway to Southern Africa
by Hon. David Kilgour, Secretary of State
(Latin America and Africa)
Comments to International Development Days
Conference
Sponsored by Alliance of Manufacturers &
Exporters Canada and CIDA
Westin Hotel, Ottawa, May 28, 1998
It is a pleasure
to speak to people who already believe in
the large potential of Canadian trade with
Africa. My own enthusiasm was greatly strengthened
by a recent business development mission
to the western and southern parts of the
continent.
I was aware
of some of the opportunities in South Africa
since the end of apartheid, which will be
the main focus of this talk. A more surprising
discovery was the extent of opportunities
for Canadians in West Africa; Ill
spend a few moments discussing them because
they are less well known.
Democratic
South Africa clearly offers many opportunities
for Canadian business. Its large population
and modern infrastructure make it an attractive
market/production location. The Mandela
government is anxious to increase the standard
of living for the majority extending
benefits that were long enjoyed only by
a minority.
South Africa
is also well-placed as an access point to
the rest of southern Africa and its government
wants to extend stability to the entire
region. An example of this is South African
investment in Mozambique, particularly in
the Maputo Corridor. This huge South African-led
initiative will modernize the transportation
infrastructure between Gautung and Maputo,
furthering development of Maputos
port facilities and contributing to regional
prosperity.
The advantages
South Africa offers to Canadian business
can be described as both lynchpin and access.
It is by far the largest and most diverse
economy of the region with the widest range
of resources, including a trained labour
force. Under Nelson Mandela, South Africa
has a very forward-looking government. It
is a transportation and communications gateway
to much of southern Africa.
Canadian
trade with Africa in general and South Africa
in particular is growing rapidly. Canadian
exports to sub-Saharan Africa alone last
year reached $776 million up $115
million from the year before. Canadas
exports to South Africa alone were $361
million in 1997. Two-way merchandise trade
grew to $855 million last year from $306
million in 1993 almost a three-fold
increase.
But South
Africa continues to face a number of challenges,
including the shortage of management expertise
from the previously disadvantaged communities.
In response to this need, I was very pleased
to help launch the Junior Executive Training,
or JET program on my recent visit. This
allows small groups of young executives
from disadvantaged backgrounds to come to
Canada for six-week internships and international
business training. The JET program is funded
by CIDA, but relies mostly on the initiative
and participation of our business community.
The JET program
is interesting not only because it is an
excellent example of Canadians contributing
to building the business capacity of South
Africans. It also highlights the importance
of social responsibility in our dealings
with the new South Africa. Years of inequity
in South Africa skewed the economy and society.
It is in our interest to participate vigorously
in the rebuilding process. Encouraging the
development of business expertise and networking
among Africans is not just socially responsible;
its good business. The politics of
southern Africa remain complex; it appears
to be important for Canadians to link up
with local partners who understand the situation.
The success
of some Canadian companies in the new South
Africa is worth noting:
- SNC Lavelin
completed the pre-feasibility study for
the new La Mercy Airport in Durban and it
is hoped they will be successful in securing
the overall project management contract
once the partial privatization of airports
is complete.
-
Bell Helicopter last year delivered six
Model 407 helicopters worth $11.3 million
and one Model 430 worth $5.9 million to
various customers in South Africa. They
have also been short-listed for a contract
to supply 60 light utility helicopters to
the South African Air Force.
-
S A Express, a subsidiary of South African
Airways, upgraded half its fleet of 12 Dash
8 aircraft to Regional Jets during 1997.
Four out of six regional jets have been
delivered so far, and the order exceeds
$140 million.
-
SouthernEra Resources, a Toronto firm and
the fourth largest diamond company in the
world, has begun operating a high-grade
diamond deposit in the Northern Province.
It will employ between 400 and 500 persons.
-
Telesat of Canada was awarded two contracts
totaling $14 million by African Continental
Telecommunications, a Johannesburg satellite-based
telecom network.
The list could go on, and there are many
smaller examples, but you get the idea.
Theres a lot happening in South Africa
and Canadian companies are well placed to
take part. Aside from our obvious linguistic
ties with South Africa, and most other countries
on that continent, we are also strong in
some sectors where the needs of southern
Africans are greatest.
Canadian
junior mining firms are heavily involved
in prospecting and exploration activities
throughout Africa. More than half of all
new mining ventures in Africa reportedly
have some Canadian participation!
Transportation,
with helicopters and regional aircraft,
and agrifood with genetic expertise in both
livestock and plants, are two sectors in
which Canadian know-how is a valued asset
by South Africans.
Power generation
is another, especially in neighbouring countries
such as Zimbabwe, Zambia, Malawi, Tanzania,
Uganda and Kenya, where the power grid is
underdeveloped. With peace in Mozambique
and hopefully soon fully in Angola and changes
in the Democratic Republic of the Congo,
there are opportunities for both hydro and
thermal power generation often in
collaboration with South African partners.
We often
dont think of education as an export
commodity, but it can be. There is great
demand for upgrading of educational skills
throughout Southern Africa, as governments
try to raise living standards. We Canadians
have good expertise in distance education,
courseware and education management.
But, before
closing, let me touch briefly on West Africa.
The situation varies greatly from country
to country, but everywhere there was enthusiasm
to do business. Among the countries the
business development mission visited
Côte dIvoire, Ghana, Mali, Guinea
and Togo several are enhancing their
regulatory regimes to make them more attractive
to foreign investors.
Canadians
are well positioned to compete in West Africa,
especially with our ability to do business
in both English and French, the major international
languages of the region. Our ties through
the Commonwealth and Francophonie, our lack
of colonial baggage and our technological
expertise especially in resource
development and services such as telecommunications
all give Canadians a long leg up.
Côte
dIvoire, Ghana and Mali were particularly
impressive. Côte dIvoire has
the most advanced infrastructure in the
region and is moving beyond trade in primary
commodities to more advanced and value-added
products. Canadian business is very active
in Ghana, both in traditional fields, such
as mining, and in modern service sectors.
Mali lacks the infrastructure of its neighbours,
but it has a very forward-looking government
that has acted to resolve old conflicts
and to implement sound economic reforms.
In short,
my recent visit to Africa impressed me deeply
with the vast array of economic opportunities
open to Canadian firms and the extent to
which Canadians and our investments are
welcome across the continent. Many of you
are already committed to doing business
with Africa. To those who are still contemplating
such a move, Id encourage you to begin
by doing your homework and then seize the
moment. Thank you.
|