(ZIMPAPERS) SA business should play positive role in the new scramble for Africa

SA business should play positive role in the new scramble for Africa
Sunday, 01 May 2011 00:13 Opinion
By Ambassador Chris Mutsvangwa

I TOOK part in the BRICS Summit at the Johannesburg Stock Exchange headquarters in Johannesburg, South Africa, on Tuesday last week. BRICS comprises Brazil, Russia, India, China and South Africa. I was the only one from Zimbabwe.

The panel, chaired by Martyn Davies, a leading consultant on China-Africa affairs, also included South Africa’s top academic experts in global business strategy, leading lawyers in corporate mergers and acquisitions and investment bankers.

There were also deputy ambassadors and commercial attaches from German, American, French, British, and, of course, Chinese embassies in Pretoria.
I was the only resident Zimbabwe delegate.

During the discussions, I presented a variant view highlighting the fact that South Africa’s business and finance needs a sea change so that it can play a positive enabling role in the new scramble for Africa led by China.

At issue were the conflicting risk perceptions about investing in Africa. BRICS and the other Asians are riding on a sense of Afro-optimism driven by the world commodities boom and an emerging African middle class.

China leads in manufacturing, India in the services industry. BRICS enjoy an edge in infrastructure provision at low cost because their economies of scale are firmly anchored in their domestic demand at home. Because they are busy building cities, ports, railways, highways, telecommunications at home, their companies have fixed and variable costs already covered by domestic demand.

Their ventures abroad, especially in Africa, are just for profits. So, they quote lower than the competition from Africa’s traditional economic co-operating partners in the West.
All this could make Johannesburg financial markets, which are the broadest and deepest on the continent, a new bridgehead to inward investment into Africa, much in the same way Hong Kong has been for

China in the last 30 years.
To seize this historic opportunity, the Johannesburg business and financial community must re-invent itself as an African entity, ridding itself of historical Euro-centrism.
Its perception of investment risk in Africa needs to shed the racial tint and the post-colonial baggage emanating from the traditional finance centres of London, Paris, Frankfurt and New York.

Capital knows no colour in the search for business opportunities.

I poignantly reminded them that their blind following of the perception of risk on Zimbabwe, their economic backyard, in the last decade has opened doors for Chinese, Indian and Korean capital as shown by Anjin in Chiadzwa, Zimasco and Zisco, among others.

The continued racial and Euro-centric attitude will only yield pain and delay. Yet, reality bids them to, at some point, contend with the black middle class.
The tobacco and cotton sectors are all set to follow this ground-breaking trend. In short, with China now the second largest world economy and BRICS accounting for a fast-growing 40 percent of global GDP,

South African white business interests, who are leaders on the continent, need to cast off their Euro-centrism.
Should they continue with their disdain of African governments at home in RSA and abroad in the Sadc sub-region and beyond in Africa, they will forfeit the business lead history has accorded them regardless, courtesy of European roots.

I cautioned them that nature abhors a vacuum.
Their chance at financial intermediation for Africa, taking advantage of the JSE and other aspects of finance, will be taken up rapidly by new players if they continue pandering to Euro-centrism.

Chitima cheAfrica chinoenda, varungu vane hurungu hweganda vachisara.
They just need to embrace their African black brothers in the new business environment that has no respect for post-colonial idiosyncrasies like illegal UK-EU-US sanctions.
The recent Diamond Summit in Dubai showed Africa joined by India and China in disregarding egregious demands of the West about Zimbabwe’s diamonds and the Kimberly Certification Process system.-The Sunday Mail