Remarks by His Excellency Mr Jacob Zuma, President of The Republic of South Africa, at the South Africa-DRC Business Forum, Kinshasa, DRC

President Joseph Kabila

Prime Minister Augustin Matata Ponyo

Ministers present

Captains of Industry

Business Delegates

Program Director

Distinguished Guests

Ladies and Gentleman

 

Itis a distinct pleasure for me to be addressing the South Africa- DRC BusinessForum which marks the advancement of relations between South Africa and theDRC.

Inthis regard I wish to express my gratitude for the hospitality accorded to meand my delegation so far by His Excellency President Kabila and his Government.

Althoughour countries’ paths to economic prosperity and political independence differ,we now share a common destiny of mutual pursuance of stable democraticgovernance, economic growth and socio-economic development.

Wetherefore share a sense of kinship with the people of the DRC, which we believeforms a solid basis for the strengthening of business ties.

Theclose political relationship that exists between our two countries has fosterednot only economic but commercial co-operation as well.

Wehowever need to explore ways and means of continuing, increasing andencouraging both trade and investment initiatives in the respective economies.

Therecent global economic crisis has just made it more urgent that “regionalintegration” should be at the top of our economic agenda.

SouthAfrica and the Democratic Republic of Congo (DRC) have strategic relationswhich predate the formalisation of our ties, in January 2004 when bothGovernments signed the General Cooperation Agreements.

TheseAgreements made provision for the establishment of a Bi-National Commission(BNC), which has paved the way for cooperation beyond the political sphere.Thus far, 32 bilateral agreements have been signed under the ambit of the BNC.

YourExcellency Mr President,

Iam pleased to note that the Economic cluster’s Joint Bilateral WorkingCommittee (JBWC) - under the leadership of Minister Rob Davies and MinisterRemy Musungayi - is now giving practical implementation to the ethos of theagreements.

Theseentail infrastructure rehabilitation and development through SpatialDevelopment Initiatives (SDIs); institutional capacity building, technicalassistance and co-operation on industrial development.

Ladiesand Gentleman, Distinguished Guests,

Wemeet after a full day of discussions by the business people and I have receiveda very positive report on your deliberations. The feedback from the respectivebusiness leaders clearly indicates that the deliberations were fruitful.

Theseare the kind of reports that we would like to consider and we encouragebusiness leaders to practically implement the resolutions that you have taken.We are also mindful of the challenges that you experience. I assure you thatboth our governments will continue to implement policies, and where necessaryamend them in order to enable business to thrive in our respective countries.

Tothis effect, the DRC government has taken strides to inspire confidence inpotential local and international investors through the adoption of wideranging measures.

Theseinclude the implementation of the investment code, acceding to the OHADA(Harmonisation of Business Laws) protocol and the continuous work in improvingthe business climate.

Ibelieve the same rigour will be applied in the upcoming review of the miningcode where private sector participation will be critical.

Itis my hope that the spirit of co-operation expressed in the sector sessionswill culminate in profitable joint ventures between the South African andCongolese enterprises.

TheSouth African government places great emphasis on these mutually beneficialbusiness partnerships that are able to leverage off existing technicalexpertise, capital resources and high-tech capabilities.

Tosupport these partnerships and other types of investment, the DTI sets asidefunding for feasibility studies for qualifying capital projects as well asother appropriate incentives.

Iurge you to consider projects that have multiplier effects where value can beadded both upstream and downstream in those sectorial value chains. I believethat the sectors that this forum discussed do meet the qualifying criteria andat the same time, they are pivotal to the trade and investment relations ofboth our countries.

Weencourage more South African companies to invest in the manufacturing sectorsand insist that skills transfer, technology transfer and expertise transfermust become integral to the joint venture partnerships.

Onlywhen the productive capacity of the African continent is strengthened, can wemanufacture quality products and services that can be consumed by both ourdomestic markets and export markets, especially in the region.

YourExcellency,

DistinguishedGuests,

Ladiesand Gentlemen,

Thereis no stronger case for intra-African trade than the recent global financialcrises which decreased African export revenues generated from the traditionalwestern markets.

Africahas a potential market of US $2.6 trillion. The DRC and the countriessurrounding it have a potential market comprising 200 million consumers. Yet,only 10% of global trade takes place between African countries.

Despitethis lack of intra-African trade and the economic turbulence affecting theglobal economy, the economic outlook for Africa remains promising. A prosperousand growing African economy is good for our continent’s development.

Italso offers many opportunities for mutually-beneficial trade and investmentpartnerships between our countries.

Growthin the continent has remained relatively broad-based; oil production, mining,agriculture, services and domestic demand have been the main drivers that haveenabled African economies to successfully navigate these global currents.

Inthis regard, African growth rates will average 6% in 2014. In comparison growthin the developed world will average 3.6%.

TheDRC is estimated to grow at 8.2% in this year alone. Against this backdrop, anyinvestor would be hard pressed to find higher rates of return elsewhere in theworld.

Howeverintra-regional trade and sustained growth on the continent must be preceded byenabling technical and transport infrastructure.

Inaddressing these challenges, various African governments have signed TheTripartite Free Trade Area (T-FTA) which is progressing well. One notableinitiative already launched under the Arrangement is the Tripartite North-SouthCorridor Investment Program.

Withinitial funding of US$1.2bn (a large proportion being funded from the AfricanDevelopment Bank and the Development Bank of Southern Africa), and strongsupport from theSouth African Government, actions are being taken tofast track this project.

Thisprogram supports some of Africa’s busiest trade routes: linking the port of DarAs Salaam in Tanzania to the copper belt in Zambia and into Lubumbashi in theDRC. It then continues down through Zimbabwe and Botswana to Africa’s largestand busiest port, Durban, in South Africa.

Ineffect, the North-South Corridor Initiative, will service eight countries,Tanzania, the DRC, Zambia, Malawi, Botswana, Zimbabwe, Mozambique and SouthAfrica.

Byworking together, we believe that both South African and Congolese enterprisescan contribute meaningfully to the socio-economic development agenda of the DRCand the African continent as a whole.

Asa continent, we have an opportunity to capitalize on our abundant naturalresources, particularly now that the international commodity prices are high.In so doing we can promote economic transformation through commodity-basedindustrialization.

Thisis important as it speaks to adding value to our resources, whilst at the sametime harnessing skills and providing employment opportunities to our people. Iassure you that South Africa is very keen and very willing to work with the DRCin this regard.

Withthe opportunities available in the DRC, there is nothing preventing us fromdeveloping and beneficiating these resources. I want to distinguish one sector thathas a multiplier effect to other sectors and that is Energy.

Akey outcome of this State Visit has been the signing of the Grand Inga treaty.This treaty outlines the development of the Grand Inga Hydro Electric Powercomplex estimated at USD 100 billion.

TheGrand Inga Project has the potential to ‘light up’ the region and further boosteconomic growth of the surrounding countries, generating 40 000 MW ofelectricity when fully operational.

Thiskey infrastructure project has many potential benefits for the SADC region andis a significant infrastructure project undertaken on the African Continent.

Thiswill also provide South African companies with further investment opportunitiesincluding in other areas of infrastructure. Once again, I urge South Africancompanies to take advantage of the spin offs that will emanate from thismilestone programme.

Ladiesand Gentleman, Distinguished Guests,

AsAfrican Heads of State we are laying the infrastructure foundation that willenable a “take off”, thereby integrating and connecting the countries in ourcontinent.

Withprivate sector participation, this foundation will unlock the economicpotential and boost trade and investment on the African Continent to ensure oursustained growth is for generations to come.

HisExcellency President Kabila and I are confident that the calibre of businessdelegates present here will participate in the improvement of the DRC’seconomic landscape.

Iapplaud South African companies that have already invested in the DRC in themining, telecommunications, financial services, road infrastructure,construction, hospitality sectors, amongst others.

TotalSouth African investment in the DRC between 2006 and 2012 was estimated atR12.5 billion (US$ 1.2 billion). Over 4000 jobs were created from theinvestment projects.

Wehave representatives of some of those companies present here today and thoseinclude but are not limited to, Vodacom, Standard Bank, Shoprite, Anglo GoldAshanti, and the recent investor PPC in partnership with Barnet Group withtotal investment of US$ 230m.

Inencouraging South African enterprises to invest in the continent we havemandated our development finance institutions to also establish their presencein several African countries. The Development Bank of Southern Africa (DBSA)works with Fonds de Promotions des Industries (FPI).

TheIndustrial Development Corporation has funded various projects in the DRC.

OurExport Credit Insurance Corporation (ECIC) has also provided risk cover forprojects in the DRC.

PresidentKabila, all these efforts and outward investment drive initiatives shouldremove any doubt about South Africa’s commitment to the DRC.

Inthis regard, South Africa looks forward to utilising its technology, technicalexpertise, and productive capacity as well as private sector capabilities tomake a direct and meaningful contribution towards regional integration,economic growth and poverty alleviation on the continent.

SouthAfrica is looking to harness further opportunities by embarking on severalprojects that favour the promotion of value added products and services to theDRC and to give support to the DRC Government’s infrastructure and economicdevelopment initiatives

Inconclusion, I want to reiterate the importance of working together for theenhancement of our economies and that of Africa at large. The role of businessin this regard is important. We urge you to take this call forward.

Matondo mingi!

Lingala

Ithank you.