Bob’s Weekend Paper Wrap Up – 31st August
By Bob Mabena
The biggest story of the past weekend is not the Gupta plane, It’s not the Mandela kid either – nor is it Lucky Montana’s Love train. Pardon me Ms Roberts but it aint in Bonang’s bedroom either. Athletics and The Apartheid Bok squad doesn’t do it either, Mosibodi.
Let me tell you about an ailing dragon and a juvenile elephant. In this case; the elephant being Africa and the ailing dragon; China. In a story in the business section of the Sunday Times, written by Asha Specman, I am made to understand South Africa’s potential. Lets start with the prefix on China’s way forward and admit that the dragon has to refocus its energy on domestic growth. Thats already happening anyway and the opportunity here lies in South Africa leveraging its competitive advantage on the African continent over not only other African states but the whole world. South Africa’s exports of advanced manufacturing products such as machinery and motor vehicles was valued at more than R190 Billion or 44% of manufactured exports two years ago.
By 2030, that value could triple to more than R700 Billion – Not my numbers, not the Sunday Times’ numbers either, but these numbers came out of a McKinsey report. It is not that South Africa and Africa is a deadbeat and can’t be saved – the challenges lie in the inability of not just government’s devoid of just the will but the Private sector being risk averse. Lets take it a step further and look at the two most viable countries in Africa – Nigeria and South Africa. Both countries import a lot from China.
The question then becomes; are there products and services which these two countries could compete on with China? The sad reality is Nigerians are not likely to buy South African goods when they can buy said items cheaper from China – the opposite applies, by the way. The litmus test for South Africa is our big four banks and Telcos – these guys have made some daring moves into the continent at a rapid pace.
There are also opportunities in agriculture and its worth R145 Billion – again, figures supplied Mckinsey. But sadly, we seem to be actually eroding value and losing market share and traction. South Africa’s growth rate has lagged behind all other developing markets since 2008 and is in stall mode at 1.5% last year. There is a myriad of levers we can pull to arrest the decline and avoid recession and these don’t rest with China or myopically introducing Mandarin in schools. We need to be more brave and to look to the continent.