Africa brings glimpse of economic hope: Gordhan
Africa brings a glimpse of hope to the unstable global economy, Finance Minister Pravin Gordhan said on Monday.
"Our continent is viewed as one of the great hopes for the world’s collective future," he said in Cape Town.
"The IMF [International Monetary Fund] projects that seven of the world’s 10 fastest growing countries over the next five years will be from Africa ... highlighting the significant investment potential and opportunities available."
Gordhan said the growth of the continent lay in the potential for symbiotic relationship between Africa and investors who sought new horizons.
However, investment in Africa had to be guided by a different approach from the colonial past, he said.
"The new partnership must be based on a long-term commitment to building African institutions and... uplifting millions out of poverty."
Gordhan was speaking at the inaugural Africa summit of the Institute of International Finance (IIF).
The IIF is a global association of financial institutions, including banks, insurance companies and asset managers, and conducts research on economic trends globally and in individual countries.
Gordhan said the drivers of growth -- South Africa's partners in BRICS (Brazil, India, and China) -- had been affected by slow global demand.
However, the growth of Africa’s consumer market was an opportunity "too big to ignore".
Since 2000, consumer spending in Sub-Saharan Africa had grown at a robust rate of four percent a year, reaching nearly US600 billion (about R5.2 trillion). Gordhan said South Africa was benefiting from robust exports to the region, which helped offset weak external demand in traditional trading partners.
In the first eight months of 2012, exports to the Southern African Development Community increased by 26.2 percent compared with the same period in 2011.
The financial sector could offer many benefits to the country's real economy, he said.
"Firstly, financial development should facilitate investment and growth, rather than encourage credit-fuelled consumerism.
"We have seen that economic gains are often privatised, accruing to the wealthy, while losses are socialised, and must be carried by all," he said.