SA 'leads in promoting African private sector'
May 16, 2008
By Ethel Hazelhurst
Johannesburg - South African investment was a leading driver of the growth of the private sector in Africa, Iqbal Sharma, the deputy director-general of Trade and Investments South Africa, a division of the department of trade and industry, said at a summit on African commodities in Johannesburg yesterday.
He said Mozambique, which was seen as an economic "basket case" in 1994, had attracted 34 percent of South Africa's foreign direct investment (FDI) into Africa since then and it was transforming the economy.
Sharma said Mozambique had been the site of "two massive industrial projects, with significant South African investor involvement". The projects were the Mozal aluminium smelter and Sasol's involvement in the construction of an 865km pipeline from an offshore natural gas field in Mozambique to Secunda in Mpumalanga.
The Mozal project was often cited as an example of the "catalytic impact" of a public-private partnership, he said. But it "was considered a risky project when it began in 1992", as a result of the civil war.
"Today Mozal accounts for 48 percent of total manufacturing output in Mozambique," he said.
Sharma said the two giant schemes had a knock-on effect as, alongside them, "about 300 South African companies launched businesses in the country, located in every sector of the economy and employing at least 50 000 Mozambicans. This has contributed to Mozambique's transformation from its classification as Africa's poorest performing economy by the UN's Human Development Report in 1991 to growth rates in recent years in the region of 8 percent."
Quoting the UN Conference on Trade and Development, he said South Africa's FDI in the rest of Africa rose from R6.1 billion in 1994 to about R24 billion in 2004.
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