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Is South Africa still the Gateway to the Region? - Uzenzele blog

This was a discussion posed at a Wits Business School (WBS) seminar that I attended recently. The importance of the Gateway methodology is that South Africa requires regional market penetration to grow its economy through the trade of goods and services.

 

 

This regional approach has been under development for years and has worked very well for South African retailers who have risked and entered African markets – of the 25 major retailers in Africa, 20 are South African including homegrown favourites such as Checkers, Game, Woolworths, Spar and Truworths, to name a few.

 

 

The case for whether South Africa is the Gateway was discussed and it was agreed that while South Africa is certainly the Political Gateway and currently an Economic Gateway due to massive infrastructure advantages in the region, we must acknowledge that this is being challenged by new infrastructure projects in rail, ports, power and water.

 

 

The view of the panel at WBS is that South Africa will become the provider of human capital to the region. I am not convinced of this, although it is evident that South Africa possesses higher skill levels than the greater Africa region, South Africa’s skills gaps are evident. A particular skills gap for regional human resource “exports” is that of labour force’s competence in the French and Portuguese languages, which are very prominent in the markets our skilled professionals will be looking to enter.

 

 

I’m further not convinced that with the impending 4th Industrial Revolution, and its reduced emphasis and requirement of human capital and skills that are currently rare and “elite”, there will be much need for our human capital - which in time will become redundant.

 

 

So, how do we retain our current advantage as the Gateway to Africa?

 

 

I would argue that we must, as South African’s, participate in infrastructure projects in the region and export our competence in this regard. This is facilitated by the Capital Projects Feasibility Program within the DTI - which refunds up to R8mil in feasibility costs for projects in infrastructure, the built environment and energy as focus areas with the intention to fund the feasibility of export projects where at least 70% of the project costs will be sourced in South Africa.

 

 

The point is “We must invest in the region if we are to grow” and remain relevant.