In April 2013, South Africa launched its industrial policy action plan (IPAP) with a goal of supporting the country’s growth. IPAP is a framework of collective strategies that are part of the national development plan (NDP), the new growth path (NGP) and the national industrial policy framework (NIPF) policies.
These policies guide South Africa’s socio-economic development by addressing challenges such as unemployment, inequality and underdevelopment. The NDP has identified six areas of focus: tourism, infrastructure development, agriculture, mining, manufacturing and green economy. The IPAP has identified priority sectors: metals fabrication, capital and transport equipment, green and energy-saving industries and agro-processing. Interventions in sectors such as automotives and components; medium and heavy vehicles; plastics, pharmaceuticals and chemicals; clothing, textiles, footwear and leather; bio-fuels; forestry, paper, pulp and furniture; creative and cultural industries; and business services have been earmarked for expanded economic growth. Other sectors for increased investment include nuclear, advanced materials, aerospace and defence and electro-technical and ICT, all of which are part of South Africa’s innovation and knowledge economy.
The Canadian private sector sees South Africa as a gateway to the African market because of its stable democracy, rule of law, world-class banking system and good infrastructure. The bilateral trade between the two countries reached approximately $1.6 billion in 2011, but a great deal more can be done to realize this relationship’s potential. Canadian exports to South Africa consist mainly of machinery, cereals, poultry and pork, while South African exports to Canada include motor vehicle components, precious stones, fruit and nuts, machinery and wine. There has been growing interest from Canadians for South African products such as rooibos tea, spices and organic lamb.
On the bilateral investment front, energy and chemical company SASOL’s inroads in the Canadian energy market are worth mentioning. SASOL completed a feasibility study on a proposed gas-to-liquids plant and will build a facility in Alberta. Anglo-American, through its subsidiary, De Beers, has committed a huge investment in its Yukon mining operations. From the Canadian side, Bombardier has successfully developed an 80-kilometre Gautrain line, the first high-speed train in sub-Saharan Africa, allowing passengers to zip between Johannesburg and Pretoria in as little as 26 minutes. More than 100,000 daily passengers will use this system. Future high-profile investment in various other sectors remains a priority.
South Africa is focusing on infrastructure development as a catalyst for economic growth and development and to improve life for all South Africans. Building on the infrastructure legacy of the 2010 FIFA World Cup, we are creating better rail, ports, roads, energy and broadband capacity.
In his 2013 budget presentation, Finance Minister Pravin Ghordhan enumerated a number of opportunities for investment in infrastructure. Opportunities are many, one of which is with the government’s $326-million Cdn fund for rail signalling. The South African National Roads Agency Ltd. also received an additional $142-milion Cdn to fund urgent upgrades to the national road network. Bombardier was awarded with a $112-million Cdn signalling contract for the main commuter rail corridors in and around Durban. The Chinese information and communication technology giant Huawei was awarded the contract for a modernised digital signalling radio system for train communication and management that meets modern safety requirements.
A fund to improve dams and water delivery systems, at an estimated $267 million Cdn has been allocated for regional bulk water infrastructure, in this financial year with an additional $195 million Cdn to top up the municipal water infrastructure grant. Another $154 million Cdn has been earmarked to complete the De Hoop Dam in the Limpopo Province. These projects will go a long way towards providing the much-needed jobs in line with the New Growth Path to create five million jobs by 2020. These infrastructure projects have been backed up with a massive investment in building an expanded energy-generation capacity to meet the growing need for power as the country grows.
In 2012, South Africa won a bid to host the Square Kilometre Array (SKA), the largest radio telescope in the world and with Canada being admitted to the SKA Board, the opportunities for collaboration between the two countries abound. In addition, the potential of shale gas development in the Northern Cape’s Karoo Basin is estimated to be 485 trillion cubic feet. With Canadian investment and expertise in this energy sector, avenues for collaboration remain strong. These developments create a solid foundation for investment and co-operation in various economic sectors and will support the South African government’s efforts at addressing unemployment in a meaningful way.
The visit of Gov.-Gen. David Johnston with President Jacob Zuma in May 2013, provided renewed vigour for bilateral co-operation in areas such as youth development, education, science and technology. The upcoming bilateral annual consultation scheduled in October, will add an impetus to our growing co-operation.
Membathisi Mphumzi S. Mdladlana is high commissioner for South Africa. Reach him at 613-744-0330.