PoliticsNews & AnalysisSouth Africa in Africa: Your hinterland is there

Wed,19Jun2013

Posted on Wednesday, 13 February 2013 12:06

South Africa in Africa: Your hinterland is there

By Gregory Mthembu-Salter in Cape Town

Photo©ReutersThe idea of the African continent as South Africa's hinterland was reborn in a new form under the ANC. Reversing apartheid's legacy, the country has strived to be a continental peacekeeper, while its banks, retailers, telecoms, food and mining companies have struck out for expansion in the fast-growing economies of its African neighbours.

 

In Cape Town's tranquil Company's Garden, where in 1652 Dutch captain Jan van Riebeeck ordered vegetables to be grown to feed the tiny white colony, there is an ageing copper statue.

Dressed in a crumpled suit and much spattered by birds, a larger-than-life figure of Cecil Rhodes, the notorious 19th-century diamond magnate and imperialist, is pointing north. Beneath Rhodes' feet lies the inscription "Your hinterland is there."

Companies are being lured north by higher growth rates than South Africa's own

By "your", Rhodes had meant white people in general and the British state in particular. In that sense, Rhodes's dream is dead, but the idea that Africa is South Africa's hinterland lives on in South Africa, given new life since 1994 by the ruling African National Congress (ANC).

Painfully aware that apartheid South Africa visited destruction and destabilisation on its African neighbours, backing rebel groups that fought bloody civil wars in Mozam- bique and Angola, the ANC has been determined to reverse this legacy.

The post-1994 South African government has, with varying degrees of success, sponsored peace talks across the continent, from Madagascar, Burundi and the Democratic Republic of Congo (DRC) to Côte d'Ivoire and Sudan.

The government has deployed the South African National Defence Force as peacekeepers across the continent, both to assist South Africa's diplomatic efforts and as part of United Nations missions. South Africa was instrumental in the transition from the Organisation of African Unity to the African Union (AU) in 2002 and the continent's adoption of an economic blueprint called the New Partnership for Africa's Development.

Bad Blood

Then, in 2012, after a bitter and acrimonious process, former South African cabinet minister Nkosazana Dlamini-Zuma was elected as chairperson of the AU.

According to Adekeye Adebajo, director of Cape Town's Centre for Conflict Resolution, "There had been an understanding that none of the big five countries in Africa would present candidates. South Africa broke with that and caused a lot of bad blood. This needs to be healed urgently. But it seems Dlamini-Zuma has started todoso."

The many bi-national commissions established between South Africa and other African states during Thabo Mbeki's presidency (1999-2008) have yielded fewer economic dividends than South Africa had hoped.

But the promotion of South African investment in the continent by the state-owned Industrial Development Corporation and Development Bank of Southern Africa has generated positive results.

Some 22% of foreign direct investment between 1994 and 2004 in the Southern African Development Community came from South Africa.

Between 2002 and 2010, South Africa's total trade with Africa rose 17%, with imports rising 25% and exports 15%. In 2011, South Africa exports to the rest of Africa reached $13.2bn, according to the Department of Trade and Industry.

South African companies, based in a market which, by its size and financial sophistication, has been more exposed to the global downturn than the rest of the continent, are being lured north by higher growth rates.

In September, agribusiness firm Tiger Brands made its third acquisition in the Nigerian market, buying a 63.5% stake in Dangote Flour Mills, owned by billionaire Aliko Dangote.

In 2011 it bought biscuit manufacturer Deli Foods Nigeria and a 49% share in the food and beverage interests of UAC of Nigeria Plc.

South African winemakers are also targeting the growing African market and held their first show- case in Lagos in October.

Although 60% of wine in Nigeria is imported from Europe, South African wine represents 22% of the total volume and grew by 12% for the 12 months to March 2012, according to the Wines of South Africa industry lobby.

These days, South African retailers are ubiquitous in Africa's larger cit- ies, from Joshua Doore furnishers to fast food outlets like Nando's, Steers and Debonairs Pizza, and Shoprite, Checkers and Spar supermarkets.

Far more than they do back in South Africa, these stores enjoy a reputation across the continent for quality, albeit with a steep price tag attached. Some are also helping to push up the quality of local produce.

Shoprite, which declined to comment to The Africa Report, runs a division called Freshmark, tasked with sourcing fresh fruit and vegetables from 354 local suppliers in 11 African countries.

Small-scale farmers in countries like Ghana and Zambia are pushing food safety standards up to interna- tional levels as a result.

In telecoms, South Africa's MTN is the continent's biggest mobile operator, with a massive 126 million subscribers on the continent in September 2012, of whom 45.6 million are in Nigeria, its biggest market.

MTN is helping to roll out tele- coms innovation on the continent, for example working with the Grameen Foundation on a mobile-money incubator project in Uganda and launching a mobile newspaper in Nigeria in September.

Vodacom, which is majority owned by UK-based Vodafone, counts 50 million subscribers in Africa as a whole, of whom an estimated 20 million are in South Africa.

Africa's five biggest banks are South African, and all of them finance African projects, though only Standard Bank has an extensive footprint on the continent.

Others are looking to expand and consolidate their operations. Investment houses have also been steadily building up their assets.

Investec Asset Management, a South Africa-based firm with $100bn under management, has been working in the rest of Africa since 2005. "We now have $3.8bn of our clients' money there," says Investec investment principal Richard Honey.

"It is exciting but tough. It takes time to build a network, but we are very excited by what is going on on the continent."

Honey is based in Zimbabwe, but most of the group's Africa business is done from South Africa. "We mostly fly in, but we fly in a lot," he says.

South African mining houses are active all over Africa, but the risk-averse Johannesburg Stock Exchange cannot really compete with other bourses, particularly those in Australia and Canada, as a source of mining capital.

Since China's Jinchuan Group bought Johannesburg-based copper and cobalt miner Metorex in 2011, there is not a single South African mining company remaining in production in the DRC.

However, Randgold Resources is expected to pour its first gold at Kibali, in Orientale Province, during 2013. Outside South Africa, Randgold also has mines in Mali and Côte d'Ivoire.

AngloGold Ashanti, another major South African gold miner, has operations in Ghana, Mali, Namibia and Tanzania, but is still dithering about how to proceed at the Mongbwalu project in the DRC.

Even at mines where the ownership is not South African, the skilled personnel on site often is.

The flights between Johannesburg and Ndola in Zambia's Copperbelt and Lubumbashi in next-door Katanga in DRC are filled with tough-looking, Afrikaans-speaking men who work in the mines there.

Shifting Public Blame

South African soft power is spear-headed by DStv, a satellite TV network operated by MultiChoice that was launched in 1995 and broadcasts all over Africa.

Among the most popular South African offerings is Generations, a Johannesburg-based soap opera featuring the dastardly dealings of a bunch of wealthy advertising and media executives.

South Africa's hapless national team, nicknamed Bafana Bafana, failed to qualify for the 2012 Africa Cup of Nations and will only compete at the 2013 tournament kicking off in January because South Africa has stepped in as host.

The country has good form. The 2010 FIFA World Cup is widely acknowledged as a South African and African triumph.

The positive publicity the tournament generated was invaluable for a nation such as South Africa, whose evolving reputation on the continent is proving complex and contradictory.

Nelson Mandela remains an icon, and while the country is rightly acknowledged for its peaceful transition to democracy, free press, economic infrastructure and quality of life, South Africans are also commonly accused by other Africans of arrogance, xenophobia and the possession of a violent streak.

But the FIFA World Cup showed another side of South Africa, in which other Africans are not only tolerated but welcomed●



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