Effective regional integration is of particular pertinence now, especially with uncertainty surrounding the global economy and stagnation still likely to continue in traditional markets such as Europe.
Enormous opportunities for cross-border trade within Africa in food products, basic manufactured goods and services remain unexploited. The cross-border production networks that have been a salient feature of development in other regions, especially East Asia, have yet to materialise in Africa. Hence, the renewed focus on sectoral cooperation through a value-chain approach to industrial development.
We need to use our resources to change the region’s fortunes away from an exporter of primary products and an importer of manufactured goods.
Challenges in our own continent remind us of the immense burden of responsibility we carry as African leaders, to bring about substantive improvements to the material wellbeing of all our citizens.
As such, we are compelled to create enabling environments for our economies to prosper and grow.
Sustainable economic growth and development is essential if we are to support the creation of more sustainable livelihoods for our citizens and in particular our youth, through the provision of decent jobs and employment.
Global growth is expected to be the slowest since the Great Recession. This new world order is characterised by lower commodity prices which are likely to stay low for the foreseeable future, and weakening of currencies resulting from slow growth in the economies of our major trading partners, particularly China.
Developing economies such as ours face widening trade deficits resulting from low commodity prices and weak demand for imports has come to put pressure on our foreign exchange reserves and, consequently, on our fiscal and monetary policies.
As SACU member states, we need each other more than ever before.
We need to consider very seriously what we can do to avert these crises for the benefit of our people.
It is my considered opinion that as we celebrate another achievement in SACU, we should spare a moment to reflect on all these urgent and pressing challenges.
It cannot be business as usual. We need to develop practical work programmes that address the challenges we collectively face to promote complementarities between our economies. We need to consider a funding mechanism that will ensure speedy and effective implementation of agreed programmes. This requires that we take charge of our destiny due to limited resources and aid globally.
Diversification is important. An economy and export basket concentrated in a few products could be vulnerable and prone to destabilisation. Sustainable and continued economic development becomes very unlikely, if not impossible, in such a destabilised economic environment.
In addition, a strong and diversified manufacturing sector across the region will increase the impact of SACU as an integration tool for all of us. Competitive and diversified manufacturing will increase the trade potential among us.
As SACU Heads of State and Government, we have met several times and, on 12 April 2013, we signed the Amendments to the SACU Agreement of 2002, institutionalising the SACU Summit. We noted that the SACU Council of Ministers streamlined the five-point priority list to underpin the SACU work programme on regional industrial development as an overarching objective of the SACU.
We must therefore act purposefully to strengthen and identify competitive advantages in value added production and trade, including through the development of complementary cross-border value chains.
Well-developed infrastructure, as well as the market size offered by the combined SACU member states’ markets, are essential underpinnings for industrial development and are key to foster economic development.
Our people expect a lot from us. They expect us to create employment opportunities, they expect us to deliver social services.
With our collective effort, we can deliver these and we need to commit ourselves to doing exactly that. We dare not fail!
President of South Africa
(This is a shortened transcript delivered at the opening of SACU offices in Windhoek last week)