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Rich in natural resources can promote economic development in Africa

         Date: 2012-03-31

           Tag: Africa economic, Africa natural resources

Summary: Africa rich natural resources can make Africa a potent economic force.The scale and pace of our continent’s development is staggering.

Africa rich natural resources  can make Africa a potent economic force.The scale and pace of our continent’s development is staggering.

One recent study estimates that Africa’s collective GDP is set to increase from around US$1.6 trillion (R12 trillion) today to $2.6 trillion in 2020.

By that year, Africa’s consumer spending will have increased to $1.4 trillion, buoyed by the 128 million households predicted to have significant discretionary income. Investors are waking up to Africa’s potential.

Our continent has 60 percent of the world’s uncultivated arable land; connectivity has improved as a consequence of the 316 million people who have become cellphone subscribers in the past 10 years; and demand for our oil, gold, diamonds, timber and rare earth metals from the world’s emerging economies is pushing commodity prices to new heights.

These changes include: reducing regulatory burdens and the costs of compliance; facilitating access to capital and credit; expanding access to and improving support services for small businesses; and critically enhancing entrepreneurial expertise through education and skills development.

There still have a long way to go. The World Bank’s Doing Business report ranks SA 75th in the world for ease of “starting a business”, which reflects the bureaucratic complexity, high costs and the time it takes to open a new enterprise.

Whereas it takes an average of 22 days to set up a business in SA and go through the six procedures required and pay the necessary fees, in Mauritius it takes only six days and five procedures.

South Africa, however, still compares favourably with our partner in the Brics group of countries, Brazil, where it takes 119 days to go through the 13 steps required.

A key role of government is to facilitate the emergence of dynamic new businesses and empower young, innovative entrepreneurs to lead the charge against unemployment and poverty in our country.

The DA’s proposals include a business voucher support programme to assist municipalities in offering support to start-ups and small, medium and micro enterprises (SMMEs); a cash flow assistance programme to help businesses with a turnover of less than R5 million weather temporary difficulties; and a national venture capital fund to provide investment capital to assist early stage businesses to grow.

I am heading a major policy development and review process in the party – codenamed “The 8% Growth Project” – that seeks to unpack the challenges facing the economy and to propose a set of cogent and effective policy solutions to put SA on a path to rapid economic growth.

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