Johannesburg - South Africa's membership of the bloc of
leading emerging economies and its unique position in Africa heralded the
country's role as a gateway into the African continent.
However, trade experts question whether it can live up to
this position as investors begin to increasingly look towards other African
markets.
In 2003 South Africa became part of the IBSA grouping
(India, Brazil and South Africa), and seven years later it joined the bloc of
countries now known as Brics (Brazil, Russia, India, China and South Africa).
Economists have predicted that the dynamic growth of the
Brics countries will bring about a shift in economic power towards the
developing world.
And South Africa, as the most developed country in Africa,
offers the infrastructure and services to unlock the region's frontiers, they
say.
With the International Monetary Fund (IMF) forecasting 2012
growth figures averaging about 6% for sub-Saharan Africa - and with countries
like Angola raking in gross domestic product (GDP) growth of almost double that
- the continent is touted as the investment destination of the decade.
Africa's population of just over one billion pales in
comparison with Asia's 3.8 billion, but the African market is largely untapped
and most countries find themselves on a firm growth trajectory.
South Africa, therefore, should be the logical first port of
call for investors. But regional trade experts gathered at a mid-March forum on
South Africa's trade policy, organised by the South African Institute for
International Affairs (SAIIA), questioned the gateway concept.
"Yes, South Africa represents the continent in the G20
(bloc of developing nations), but that is not the point," said Peter Draper,
senior research fellow with SAIIA.
"If a gateway is supposed to be a transmission belt
between global and regional markets and production facilities, the question
should be whether South Africa can use its physical and material infrastructure
to fulfil a connecting function between Africa and the rest of the world."
The answer to this question is not an unequivocal yes.
"The need to get minerals down from the central African
plateau to the ports, using South Africa's good infrastructure, has boosted it
as a transport hub," said Draper.
"But South Africa, geographically speaking, is not
optimally located, and some of the traditional advantages are rapidly
eroding."
Places like Gauteng or Cape Town are no longer necessarily
the preferred outposts from which multinationals conquer the continent. The
reason for this is not just because South Africa is relatively far from African
markets.
Global player General Electric recently choose Nairobi as
its sub-Saharan hub - following companies like Coca-Cola, Nestlé and Heineken -
and it based its decision partly, say trade academics, on South Africa's
unpredictable policy environment.
"It raises the question: to what extent do foreign
companies still use South Africa as a conduit into the continent?" said
Draper, who said heavily populated centres of West Africa - and not South
Africa - will drive future growth on the continent.
According to Dianna Games, chief executive officer of
consulting firm Africa @ Work, South Africa used the gateway concept to
position itself globally.
"But this idea of South Africa as a single gateway into
the continent is not necessarily shared by the rest of Africa.
"As foreign investors are disaggregating African
regions and countries, South Africa is losing traction on a whole host of
issues. This does not mean that other African countries are necessarily in a
better position, but the reality is that these markets are moving up, while
South Africa is sliding."
She added that South Africa, situated at a remote tip of the
continent, should deploy progressive strategies to keep attracting investment.
"Investors go directly to other African markets,
because they can. The South African government is not as worried about the
decline of this competitive edge as it should be," she said.
Games said the port of Durban is one of the most expensive
in the world, though with the rehabilitation of the east and west Coasts of
Africa - some of it by resource companies needing to find more convenient
export routes - trade patterns are starting to change in the region.
In time, it is likely that Durban will be just one more port
handling regional trade, rather than the main one.
"Investors are also worried about current government
policies, including a decline in economic and press freedom. South Africa is
losing its status as an exception in Africa, and is viewed by some to be on a
downward trajectory, with some other economies rapidly improving.
"Meanwhile, the actions of petty bureaucrats have
affected the relations between South Africa and other African countries, which
generally are not managed well."
In this vacuum, China and India have long since bolstered
bilateral relations with most African countries.
And Portuguese-speaking Africa, especially Angola, is
Brazil's well-established gateway into the continent.
"With 240 Australian listed mining companies, among
others, and over 800 oil and gas outfits operating in Africa, the gateway
concept is declining. Many of these companies operate from their host countries
and go direct to the resources as required, rather than setting up headquarters
in Africa...
"We focus heavily on Brics and not on African
countries. But Brics might fizzle out," Games said.
"We inherited the role of a gateway, it wasn't
necessarily a policy objective," commented one South African trade
official. "And we are certainly not a gatekeeper, which is the connotation
that goes with the idea of a gateway."
But according to the official, it is not really relevant
whether South Africa is losing its gateway status.
"We would welcome investments being routed directly to African countries. That way our collective growth trajectory is increasing. It means our policies are working. It means that the continent is growing and becoming more competitive. We need a growing Africa for South Africa's own future."