Business
As Africa grows, South Africa ceases to become continent’s gateway
“If a gateway is supposed to be a transmission belt between global and regional markets and production facilities, the question should be whether South Africa can use its physical and material infrastructure to fulfil a connecting function between Africa and the rest of the world.”
The answer to this question is not an unequivocal yes. “The need to get minerals down from the central African plateau to the ports, using South Africa’s good infrastructure, has boosted it as a transport hub,” said Draper.
“But South Africa, geographically speaking, is not optimally located, and some of the traditional advantages are rapidly eroding.”
Places like South Africa’s economic province of Gauteng or its coastal city of Cape Town are no longer necessarily the preferred outposts from which multinationals conquer the continent.
The reason for this is not just because South Africa is relatively far from African markets.
Global player General Electric recently choose Nairobi (in Kenya), as its sub-Saharan hub, following companies like Coca Cola, Nestle and Heineken; and it based its’ decision partly, say trade academics, on South Africa’s unpredictable policy environment.
“It raises the question: to what extent do foreign companies still use South Africa as a conduit into the continent?” said Draper, who said heavily populated centres of West Africa, and not South Africa, will drive future growth on the continent.
