Speech for Deputy Minister Pahad: French
- South Africa Chamber of Commerce and Industry, 12
June 2000 Sandton, Johannesburg
Mr President, Madame General Secretary, Ambassador
d'Albis, distinguished guests, I am honoured to address
this esteemed Chamber today.
In the last few weeks sceptics and Afro-pessimists
have had a field day. We are acutely aware of the tragedy
unfolding from Sierra Leone to Angola, from the DRC
to Sudan, from the killing fields of Ethiopia and Eritrea
to the killing fields of Burundi and Somalia, from the
tensions in Zimbabwe to the tensions in Rwanda. Thousands
of innocent people are being killed, the infrastructure
is being destroyed, land mines are indiscriminately
planted. The agricultural land is laid to waste and
millions of people have become refugees.
However, while we cannot ignore this reality we dont
have the luxury to indulge in sceptism and despondency.
We must, rather, constructively and critically examine
the challenges facing Africa, and identify the tremendous
opportunities that need to be exploited.
Today, I would like to concentrate on the African Renaissance,
South Africas role in Southern Africa and the
importance of South Africas relations with Europe,
The notion of the African Renaissance is described
by academician John Stremlau as Renaissance proponents
seek to convey a positive vision of Africa as a peaceful,
democratic and market-oriented region that will attract
foreign trade and investment, as well as the return
of thousands of talented Africans and billions of capital
flight now in safe havens abroad. No one denies the
harsh realities of human deprivation and deadly conflict.
Calls for a renaissance are intended to encourage all
Africans to confront these realities and take greater
responsibility for reversing them. Strategically, the
African Renaissance offers an alternative to the prevailing
European concepts of, and structures for, African and
I believe he captures the essence of our vision of
an African Renaissance.
The very nature of regional and global interdependence
today, characterised by globalisation and the information
revolution, indicates that no country can be an island
of prosperity in a sea of poverty.
Historically, and especially in the post colonial period,
African leaders spoke of Africa's contributions to the
very evolution of human life and also of ancient times
when Africa was the leading centre of learning, technology
and culture. They were referring to the increasing discovery
of evidence which points to Africa's primacy in the
historical evolution of humankind; to the magnificent
royal courts of Mali and Timbukto in the 15th and 16th
centuries; to the works of rock art in South Africa
that are thousands of years old; to the artistic works
of the Nubians and the Egyptians; to the sculptured
stones of Aksum in Ethiopia; the pyramids of Egypt;
the City of Carthage in Tunisia and the ancient universities
of Egypt, Morocco and Mali. Those leaders called for
an African reawakening to restore this legacy. Although
the vision was there, the time was not yet right for
a renaissance. Africa, which was already struggling
to come to grips with the legacies of the slave trade
and colonialism was again sacrificed on the altar of
the Cold War.
Recently President Thabo Mbeki said that "there
exists within our continent a generation which has been
victim to all things which created the negative past;
this generation remains African and carries with it
a historic pride which compels it to seek a place for
Africans equal to all other peoples of our common universe
... I believe that the new African generations have
learned and are learning from the experiences of the
past. I further believe that they are unwilling to continue
to repeat the wrongs that have occurred".
This reflects the renewed spirit of confidence and
self-assertiveness on our continent. Once again our
leaders have taken up the mantle of revolutionaries
for the African rebirth.
Today, Africans are again asking questions, inter alia
why, despite our enormous riches and potential, are
the greatest number of the least developed countries
found in Africa (33 out of 48), why has sub-Saharan
Africa's slice of the world trade fallen from three
percent in the mid 1950's one percent in 1995; why have
African exports fallen by 50% from 1985 to 1995. How
do we cope with the reality that the prices of the vast
majority of our exports has systematically declined?
Why do the majority of Africans live in countries where
economic development has declined? According to latest
UN statistics, of the 5 sub-regions in Africa, only
2 accounting for only 25% of the continent's population
enjoyed a positive growth performance. Growth decelerated
in the remaining 3 sub-regions, negatively impacting
on 75% of Africa's population.
Why has the world not effectively dealt with Africas
debt problem? In 1980 the total debt stock of the highly
indebted countries, the overwhelming majority of whom
are African, stood at about $59 billion. By 1997 it
had increased to $201 billion. Outstanding external
debts in many African countries exceed their GNP and
debt service requirements exceed 25 per cent of their
total export earnings. In the same period, the debt
service paid had increased from $5.9 billion to about
Why has official development assistance declined by
almost a 1/5th in real terms since 1992? A report issued
last month found that the USA Administrations
$10.7 bn foreign aid request for the financial year
2001- which Congress is expected to cut is a
post-Second World War low in the percentage of federal
funds going to foreign aid.
This compelled the UN Secretary General, Kofi Annan,
to recently state: "It is particularly shameful
that the US, the most prosperous and most successful
country in the world, should be one of the least generous
in terms of the share of its Gross Domestic Product
it devotes to helping the worlds poor."
Why has Africa failed to attract substantive foreign
direct investment? Many African countries have taken
measures to create a climate conducive to Foreign Direct
Investment. These measures included trade liberalisation,
the strengthening of the rule of law, improvements in
legal and other instruments, as well as greater investment
in infrastructure development, privatisation, greater
accountability and transparency, greater degree of financial
and budgetary discipline and the creation and consolidation
of multi-party democracies.
Since 1990 the profit levels of foreign companies in
Africa have averaged 29%, higher than any other region
in the world. Sadly this has not led to sufficient Foreign
Direct Investment. Africa, which has the highest number
of least developed countries, continues to grapple with
the fact that its share of FDI flowing to developing
countries, declined from more than 11% in the period
1976-1980 to 4% in 1996-1997.
The dire consequences of our failure to answer these
questions is that the largest percentage of people in
the world living on less than one dollar a day are to
be found in sub-Saharan Africa. Growth per capita income,
which averaged 1,3 percent in the sixties, was reduced
to 0,8 percent in the seventies and further reduced
to minus 1.2 percent in the eighties. Today per capita
income is as low as $500 per annum; electrical power
consumption per person is the lowest in the world; Africa
has 14 telephone lines per 1000 and less than half of
1 percent of all Africans have used the internet.
African Renaissance is our attempt to answer these
We seek to answer these questions in a New World order
that has changed dramatically over the last few years.
Not only do we have to deal with the legacies of the
past, but also now we are confronted with the phenomenon
of globalisation, liberalisation, deregulation and the
We believe that the biggest challenge facing humanity
today is to ensure that Globalisation benefits all -
big and small, the rich and the poor. In our global
village, there cannot be islands of development and
prosperity in a sea of abject poverty and conflicts.
The real condition for growth, development and the
equitable spread of wealth across the world economy,
lies in raising the per capita incomes of the majority
of the worlds people. The rise of GDP in these
areas offers the true prospect for global growth and
wealth. This would only be achievable if these economies
are capable of reaching new levels of industrialisation.
This involves achieving the capacity to develop sophisticated
industrial processes, widen the variety of products
that are produced, greater market access, and ensure
that Africa benefits from the scientific and technological
revolutions. This must include the transfer of affordable
technology and access to research.
What we need, therefore, is to establishing a direct
line from the rural village to the global village in
the interest of our shared human condition. Regardless
of the individual belief system of any human being,
this shared genetic and moral code that constitutes
humanity, must surely bind us all together.
It is now your time to seize the opportunity and contribute
to the African Renaissance, because at the end of the
day, businesses stand to profit as much as humankind.
Chairperson, wealth creation and therefore promoting
economic growth is Southern Africas greatest challenge.
This economic growth encompasses not only socio-economic
developments, but also peace and stability.
SADC is the foundation on which we seek to make the
21st Century an African Century.
The aim of SADC is to create a Community providing
for regional peace and security, sector co-operation
and an integrated regional economy. As a regional institution
it has laid the basis for regional planning and development
in southern Africa. SADC forms one of the building blocks
of the African Economic Community (AEC).
Our vision for the Southern African region is one of
the highest possible degree of economic co-operation,
mutual assistance where necessary and joint planning
of regional development initiatives leading to the establishment
of a free trade area in the region, the development
of basic infrastructure, the development of our human
resources and the creation of the necessary capacity
to drive this complicated process forward, as well as
the urgent need for peace, democracy and good governance
to be established throughout the region.
The countries of the Southern Africa region can achieve
their full potential only through close co-operation
in the exploitation of natural resources in a co-ordinated
fashion, the pooling of technical expertise, the harmonisation
of trade practices and the promotion of economies of
scale. This is one of the principle tasks of the SADC.
We are confident that the SADC Trade Protocol, which
is the main instrument for creating a Free Trade Area,
will be implemented on the 1st September 2000. ECOWAS
and COMESA have also taken decisions to accelerate their
integration process. This undoubtedly will open up exciting
new possibilities for trade in the region and the continent.
Also increased development of our common Transport,
Electricity and Telecommunications infrastructure will
accelerate the economic development of the Continent.
The opportunities for joint SA / French initiatives
in this regard should be evident.
Chairperson, the SADC Region does not function in isolation.
In this regard it needs to form partnerships with the
rest of the international community which will significantly
increase its chances of success. Europe as a strategic
partner has a major role to play.
In this respect, South Africa is a member of the 3-country
steering committee driving the Berlin Initiative, which
strives to foster closer co-operation between the European
Union and SADC, Priority issues that are included under
this Initiative are the consolidation of democracy in
the Southern African region, combating illicit drug
trafficking, clearance of landmines, regional integration,
promotion of Trade and Investment and combating HIV/AIDS.
Europe remains South Africas main economic partner
in terms of trade, investments, finance and the transfer
of technology. It is vital for South Africa to expand
its economic relations with the outside world in order
to meet the growing demands of our people for a better
life. Economic restructuring, greater market access,
more foreign direct investment, increased co-operation
in science and transfer of technology, as well as the
development of our tourism industry are priorities.
In this regard Europe is a vital partner for South Africa.
It should be noted that South Africas total trade
with Europe has doubled over the past ten years. 45%
of South Africas total trade is conducted with
Europe and Europe remains the largest source of foreign
direct investment to South Africa.
In view of the fact that Europes share of world
GNP amounts to 25% and that it accounts for 20% of world
trade, the EU/SA Free Trade and Development Agreement
is of strategic importance to South Africa. Once fully
in operation, it will contribute significantly to economic
growth in South and Southern Africa. The Trade, Development
and Co-operation Agreement (TDCA) has become the centerpiece
of South Africas bilateral interactions with Europe.
After approximately four years and 23 rounds of negotiations,
the TDCA was signed in Pretoria in October 1999. Objections
raised by Italy and Greece over grappa and ouzu raises
some serious concerns. I am happy that, a few days ago,
it was announced that all outstanding differences have
The most prominent feature of the TDCA is its provision
for the establishment of a Free Trade Area (FTA) between
South Africa and the EU. The EU has undertaken to eliminate
tariffs on 95% of its imports from South Africa within
10 years. This process will be most extensive and rapid
in the case of individual goods. Indeed, most industrial
products from South Africa will be able to enter the
EU market duty free within three years of the implementation
of the TDCA, i.e. by the end of 2002. South Africa,
for its part, has committed itself to the full liberalisation
of 86% of its imports from the EU by the end of a transitional
period of 12 years. It is estimated that the coverage
of the FTA will be around 90% of current trade between
South Africa and the EU. The EU is at present South
Africas largest trading partner, accounting for
around 35% of its overall merchandise trade. It is,
moreover, the source of over half the total stock of
foreign direct investment in South Africa.
While agriculture proved to be a sensitive issue for
the EU, after difficult negotiations it agreed to liberalise
approximately 61% of agricultural imports from South
Africa. In addition, it granted South Africa quotas
for certain agricultural products at preferential tariff
rates, ranging from 0% to 50% those for Most Favoured
Nation (MFN). These quotas, which comprise 13% of agricultural
trade with the EU, have been established for cheese,
cut flowers, proteas, wine, fruit juices and canned
fruit. In return, South Africa pledged to liberalise
81% of its agricultural imports from the EU.
South Africa, like Europe, placed certain sensitive
products on a review list. These are excluded from FTA
but their liberalisation will be considered at a later
stage. This list includes such items as sugar, beef,
wheat and maize as well as some textiles and automotive
The TDLA opens up tremendous opportunities for the
private sectors of South Africa and France. Your partnership
will enable full exploitation of these opportunities.
South Africa has also managed to consolidate political
and economic relations with Central and Eastern Europe,
which offer attractive opportunities to South African
companies for trade and joint ventures. Despite the
current economic problems in Russia, the country has
huge potential and it is important to position South
Africa and its private sector to avail itself of these
opportunities in the medium to long term. It is expected
that Deputy President Zuma will pay an official visit
to a number of countries in Central and Eastern Europe
in the latter part of the year in order to give renewed
momentum to South Africas relations with that
region. I will soon be visiting Portugal, Stockholm,
Slovakia, Turkey, Bulgaria, Slovenia and Romania.
If you have any proposals on consolidating or initialing
economic interests in these countries, please let us
Lastly, let me deal with South Africas excellent
bilateral relations with France.
The Third Session of the South African/French Joint
Commission on Trade and Industry is scheduled to take
place from 28 to 29 June 2000 in Pretoria. It will be
chaired by Minister Erwin and the French Secretary of
State for Foreign Trade, Mr Francois Huwart. This meeting
will review the progress made in our respective trade
relations, as well as direct the way for renewed focus
and identifying strategic areas for co-operation. Areas
where strong potential exists to promote investments,
notably in the automotive, chemical, pharmaceutical
and hotel infrastructure sectors will be high on the
Our bilateral trade growth in 1998 was 58 %, the highest
from a real base for all of Europe, which was surely
due to the impetus of the state visit to South Africa
of President Chirac and the important trade delegation
that accompanied him to South Africa in June 1998. In
1999, however, this figure declined by -3,2 % and France
dropped from being our 6th overall trade partner to
the 7th position. South African exports to France increased
in 1999 by 8,1 % to R3, 1 bn compared to R2, 9 bn in
1998, although France dropped from being our 10th to
being our 12th largest export market. French exports
to South Africa declined by -7,9 % in 1999 but France
remained our 5th import market for both 1998 and 1999.
This trade balance is firmly in Frances favour,
amounting to R3, 3 billion, and qualifying France only
as our (164th) partner in respect of a favourable trade
balance. On the other hand, France has increased its
position to 7th Foreign Direct Investor in South Africa,
from 10th position in 1999.
The way forward should focus, on building a partnership
to doing business in South Africa as well as in our
respective "traditional" business spheres,
namely that of "Franco" and "Anglophone"
It makes sense that South African business, rather
than competing with French business, should join forces
with French companies.
As South Africa is an integral part of Africa and Southern
Africa, so is France in Europe and the European Union.
Together, South Africa and France could only create
a win-win situation if we pool our resource and use
the opportunities created by the Africa Renaissance.
Consortiums consisting of compatible French and South
African companies will certainly be a winning team in
Africa. This partnership could also attend to Europe,
Latin America, Asia and the Middle East.
I would like to suggest that the respective business
communities determine a new way forward to pro-actively
enhance our bilateral trade and investment relations.
In this respect I would like to propose a special status
for our private sector relations, namely that of a special
partnership ("partenariat special").
Let us seize these opportunities to further strengthen
the all-round relations between the South African and
French people and our two governments.