REMARKS BY PRESIDENT JACOB ZUMA AT THE SOUTH AFRICA-ANGOLA BUSINESS FORUM DURING THE STATE VISIT TO SOUTH AFRICA

PRESIDENT JACOB ZUMA

CSIR CONFERENCE CENTRE, PRETORIA 24 NOVEMBER 2017

Your Excellency – President Joao Lourenco, President of the Republic of Angola

Ministers and Deputy Ministers from South Africa and Angola

Representatives of Business from both Angola and South Africa

Ladies and Gentlemen 

It is a distinct pleasure and a privilege for me to be addressing the first South Africa – Angola Business Forum in the presence of such an esteemed audience.  

I am particularly pleased that His Excellency, Comrade President Joao Lourenco, has chosen South Africa as the first nation to visit in his first 100 days as President of the Republic of Angola.  

Your Excellency, Muito Obrigado!

It is common knowledge that the economic relations that we are deliberating on today would not be possible, had it not been for the political ties that bind our two countries. Angola’s support and solidarity in fighting the injustices of apartheid form the foundation of our cordial relations.  

Against this backdrop, I would like to welcome Honorable President Joao Lourenco and your delegation to the democratic Republic of South Africa that we and our compatriots fought so hard for.

I must be quick to point out that the freedom that our two countries now enjoy also places a new responsibility upon us.

 

As two of the leading economies in Southern Africa, we are obliged to translate this political emancipation into economic prosperity; not only for the people of our two countries; but also for the people of AFRICA as a whole.   

Time has shown us that becoming economically prosperous cannot be achieved solely by governments efforts.

Partnerships with the private sector that have tangible impacts on the lives of the people are essential. I am therefore very pleased to have heard that the reports from the business representatives indicate close alignment to the national development plans that our two nations are in the process of implementing.  

Ladies and Gentlemen,

This Business Forum is taking place at a time when the growth of economies has become less than optimal. A great contributor to the low growth rates has been the continual decline of international commodity prices.  The persistent declines and accompanying volatility has wreaked havoc on our forex earnings and overall revenues. This status quo is even reflected in the trade figures between our two countries. South Africa imports only crude oil and diamonds from Angola.

While the volume of crude oil that we have been importing has not reduced, we have been paying less and less for this oil since 2014.  

On the other hand, Angola sources machinery, vegetable products, vehicles and chemicals from South Africa. Sadly, the terms of trade are not equitable as Angola enjoys a significant trade surplus of ten-billion Rands at the end of 2016.  

Our two governments have long recognized the need to wean ourselves away from reliance on revenues earned only from the extractive industries of oil and mineral resources.

 

Therefore, the urgency with which our two countries must implement the diversification and industrialization efforts has to be intensified.

We have an opportunity to do this through agriculture and agro-processing, particularly in meeting the nutritional needs of our burgeoning populations through food production and building sustainable agri-businesses. The African Development Bank warns that if local food production is not scaled up; food imports from overseas suppliers will grow.   

More worryingly, we will lose out of the opportunities to create employment for our young populations.  

But worst of all; if we do not pay attention to agri-business; our two countries will not benefit from the value addition that results from agro-processing thereby discarding the low hanging fruit of promoting inclusive industrialization and entrepreneurship.

Comrade President

Your foresight in prioritizing agribusiness as an essential aspect of Angola’s economic development is thus commendable. We understand that attracting investment for the agro-processing sector is important to you.  

In this regard, we would be keen to share some insights from our successes in this sector. 

In some subsectors of agriculture, we have been able to produce enough for domestic consumption as well as exports to a number of countries – including Angola.

 

We export wine, animal feeds, grapes, beverages and breakfast cereals amongst others. Furthermore, we have signed off-take agreements with Asian countries for our beef, pork, pulses and mangoes.

In order to support the small holder farmers who will have an opportunity to access these new markets as well as other medium- and large-sized enterprises, we have also developed an Agro-Processing Support Scheme through the Department of Trade and Industry.

This incentive is aimed at stimulating investment into South African agro-processing enterprises that will increase capacity; create employment; modernize machinery and equipment and improve productivity and competitiveness. 

The modest success we have had in this sector pales in comparison to what can be achieved through a South Africa – Angola partnership in agro-processing.

We believe that it would be viable to consider large scale agricultural production that would focus on export markets.  

This can possibly be achieved by identifying a few large areas of ten-thousand hectares and above which hold significant potential in Angola.

This land must be in close proximity to the macro-infrastructure of main arterial roads, energy and water.

South Africa can avail facilities such as the Capital Projects Feasibility Programme funding that is administered by the Department of Trade and Industry to qualifying private sector entities.

South Africa–Angola joint ventures could then conduct feasibility studies to determine the optimal agricultural usage which would include the irrigation-, energy-, storage-, logistics- requirements as well as post-harvest production and others.

We are pleased that Trade Invest Africa of the department of trade and industry is poised to facilitate this process, in partnership with Angolan counterparts.

 

Your Excellency

We are certain of the positive revenues that would come from producing and exporting Vegetables and fruit from Kwanza Sul.

The maize and wheat that could be produced from Benguela and Huambo could ensure that the annual shortage of such staples in our neighboring countries becomes a thing of the past.  

With Angola’s rainfall and fertile soil nuts produced from Luanda Centro could be beneficiated into nut oil and nut butters for the emerging global health and wellness markets.  

We need not limit ourselves to food production. Commercial forestry in Angola which has an abundance of large tracts of land and a deep sea port implies that value-added timber products of furniture, bio energy, pulp and paper, sawlogs as well as building and transmission poles are an attractive alternative in agri-business investment. Africa’s commercial forestry industry is worth approximately thirty-nine billion US dollars.  

The South African and Angolan private sectors need to consider this as a viable and important option. This sub-sector is particularly effective in catapulting our rural development initiatives.  

Ladies and Gentlemen,  

It is not only the agriculture and agro-processing sectors that will the change the economic landscape of our two countries.

Another pivotal sector is energy, but particularly energy that provides affordable, clean and sustainable electricity. This is essential to our industrialization and manufacturing ambitions. I am aware that the Angolan government aims to reach national electrification levels of sixty percent by 2025 through an energy mix comprising hydropower, natural gas and fossil fuels.

I would encourage the South African companies present here to consider maintenance, service and investment partnerships in the power generation, power transmission as well as pre-paid metering opportunities that are on offer from Angola.

In the short-to-medium term, our revenues will still come from the extractive industries of oil, gas and mining. But we have seen that value must be added to these so that we are not victims to the vagaries of fluctuating commodity prices in the international markets.

Like a billionaire son of the soil once said: “We should pray that oil prices remain low. Oil must be the icing on the cake. We already have the cake” What he meant was that ‘the cake’ is Africa’s agriculture and its entire value chain.

Ladies and Gentlemen,

Please be assured that our two governments remain ready to support the private sector’s targeted efforts to increase the levels of investment which currently stand at eight-billion rand. 

Twenty-eight investment projects have resulted in over three-thousand jobs in Angola in sectors such as financial services, agro-processing, textiles, transport and metals.  

In order to increase intra-Africa trade investment, the Department of Trade and Industry has formed a unit called Trade Invest Africa that is mandated to implement an outward investment led approach when engaging other countries on the continent.  

Through this unit access to capital funding as well as access to markets and contracts are facilitated by Trade Invest Africa for qualifying companies, partnership and joint ventures between South African and Angolan companies.

I would also like to assure our businesspeople that in the government-to-government platforms where we discuss issues of mutual interest, we will continue removing obstacles to trade and investment, especially during this difficult period of the liquidity crunch that can act as a deterrent.

Both our Governments are focused on creating conducive climates for doing business in the region and globally. We are deliberating on reducing transaction costs and safeguarding your investment.

We trust that the private sector will partner with us in creating new solutions that enable our two countries to be agile and responsive to the challenges that we face in order to create employment and create sustainable wealth for our people and future generations.

The African child must not only compete on an equitable footing with children from elsewhere in the world. The African child must beat other children.

Muito Obrigado!

I thank you. 

Issued by The Presidency

Pretoria

 

www.thepresidency.gov.za