Leader of the New York Stock Exchange;
Members of the Stock Exchange;
Leaders of New York City;
Colleagues and friends:
Only four years ago, you hosted our then President, Thabo Mbeki. These visits underscore the importance of the relationship between our country, as the largest economy in Africa, and your institution, the largest equities market in the world.
You will know that the African continent is teeming with economic opportunities. Indeed, Africa is now one of the fastest growing economic regions in the world. For the past ten years, growth in sub-Saharan Africa averaged 4, 4%, compared to an average of 2, 7% for the global economy as a whole.
The IMF expects this rate to continue for the coming five years. Africa’s GDP per person has more than doubled since 2000.
With a billion people, the continent represents a growing market as well as a major exporter of commodities, ranging from rich minerals to fruits and vegetables and of course petroleum. That leaves us well positioned to profit from the current commodity boom, which in turn is driven by rapid growth, especially in Asia.
Our continent still has a number of countries that, like South Africa, struggle with the deep-seated legacies of colonialism; especially inadequate investment in infrastructure, deep inequalities, and poor social services.
Of course, some of these challenges can be attributed to the post-colonial mistakes, which, I am optimistic, subsequent generations have and will continue to learn from.
Still, we can be proud of our great progress in the past few years, which is reflected in solid economic terms. For instance, Africa’s external debt fell from two thirds of the GDP in 2000 to just over a fifth in 2010. That is a tremendous achievement, and it places our continent on a much stronger basis for future growth and development.
Indeed, the Africa from which we come today is very different from the usual stereotypes. Yes, there are areas such as political conflicts, about which we are very concerned. However we are proud that South Africa now plays a leading role in mediating conflict and trying to strengthen democratic systems across the continent.
But most of our continent has come very far in the past ten years. Consider three countries in our region: Angola, Zambia and Mozambique. All three grew faster than 5% a year in the past decade, with Angola getting above 10% growth a year.
Zambia’s GDP climbed by almost two thirds in the ‘00s, while the economies of Angola and Mozambique doubled in size.
These are still low-income countries, but they are on the path to major expansions of the size of their economies.
Colleagues and friends,
South Africa is an important gateway to Africa. We are still the most advanced economy in the continent, accounting for a quarter of the GDP of sub-Saharan Africa although only about 5% of the population. As you know, through our Johannesburg Stock Exchange we can provide easy access for foreign investors.
Our economic strengths start with mining, which is of course still a mainstay of our economy. The past 20 years have however seen a diversification of the sector from gold to platinum and other metals.
In addition, exports of auto industry products, of wines and citrus, construction services and tourism, amongst others, have boomed.
Last year, South Africa was chosen to be one of only four countries to produce the new Mercedes Benz C Class.
We are a leading producer of the BMW 3-series and of a number of other vehicles. While we focus on exports to Africa, Asia and Australia, some of our cars will also come to the United States – indeed, some people in the room here may already be driving our products.
We are proud, too, of the South African companies that have become leading multinationals: SAB-Miller, Naspers, some financial companies, as well as some key mining firms. Half a dozen of our companies are listed on the NYSE, with assets of close to a hundred billion dollars.
The biggest challenge for South Africa remains the deep inequalities left by apartheid. Despite the strength of our economy, it is still one of the most inequitable in the world.
A particular challenge remains high structural unemployment as well as the deep disparities in access to infrastructure and market institutions left by apartheid.
This kind of inequality and division is not sustainable.
No society can prosper for long in the face of major economic divisions between its people. Overcoming deep inequalities has therefore been central to our social and economic policies since the transition to democracy 16 years ago.
In the past year, we adopted a strategy we call the New Growth Path because it aims to set our economy on the path to more inclusive, equitable and dynamic growth. The New Growth Path targets the creation of five million new employment opportunities by 2020 off the back of stronger and more inclusive economic growth.
To achieve this aim, we are particularly encouraging investments that can expand output and employment in the mining and agricultural value chains, manufacturing, tourism and high-level services, the green economy, and through improved integration with the African region
These are ambitious targets. But we can’t afford to set ourselves targets that reveal a poverty of ambition. Other countries, and South Africa itself at key moments of our history, have stretched to achieve the big goals demanded by their historic circumstances.
In his famous 1963 speech, Dr Martin Luther King told an American audience, “This is no time to engage in the luxury of cooling off or to take the tranquilising drug of gradualism. Now is the time to make real the promises of democracy.” These words are particularly apt for South Africa today.
Like other emerging economies, we need international investment to support productive activities that increase the overall competitiveness of our economy.
We are of course most interested in direct investment that brings with it skills, cutting-edge technologies, and access to global markets.
Our New Growth Path seeks to facilitate foreign investment especially in sectors that promise sustainable growth in the long run in the context of large-scale employment creation.
In particular, we plan to invest over a hundred billion dollars in infrastructure in the next three years, mostly to generate electricity and upgrade our rail and road networks. Some of these investments will be financed by foreign loans to our utilities.
In addition, we expect to create more favourable conditions in mining, in order to take advantage of the current commodity boom, as well as supporting growth in manufacturing, tourism and agro-processing.
Finally, we will seek to support infrastructure and productive investments across Africa, especially to build logistics infrastructure linking southern and central Africa.
We look forward to strengthening our international partnerships in this context. Our meeting today will hopefully lay the basis for continued collaboration to develop our country and our continent into the future.
I thank you