Welcome to this Spring edition of the Finance and Investment Sector News. FISCU also appears to be undergoing something of rebirth, with the appointment of a new director, and with a decision finally having been made on the development of a Finance and Investment Protocol. You can read an interview with FISCU's new director on page 6. The leading article this quarter is the meeting of the SADC Ministers responsible for Finance and Investment, which took place in July, with gold sales and debt relief being the hot topics. The latter subjects were also discussed at the SADC Summit in Mozambique, which you can also read about, on page 9.
The SADC Ministers of Finance and Investment held their fifth annual meeting in Maseru, Lesotho on 8 July 1999.
development of a sectoral protocol and specific Annexures over a 2 year period (July 2001 to June 2003); -agreement on a SADC Finance and Investment Protocol by July 2003; and -ratification by parliamentary legislatures of member states by July 2004.
This approach relies on functional co-operation as a prerequisite. It is anticipated that functional co-operation will result in the establishment of sound working arrangements and the completion of preparatory work encompassed in the sectoral work programme by the time the protocol is in place and ready for ratification.
The proposed sale of gold by the IMF, support for the sale by the G8 countries and the sale of gold reserves by the UK government were identified as the major causes for the fall of the gold price.
From the Editor's Desk1 SADC Ministers of Finance2 Workshop on Intra-regional capital flows..................3 Gender mainstreaming.....4 SADC Sector Coordinators .................................5 SADC-USAID..............
Interview with Logan Wort 6 SADC Summit 9 Southern Africa Economic Summit.......................10 Forthcoming Events ......13 Welcome ...................13 FISCU Contact Details...
Concern was expressed regarding the impact of the sale of gold on goldproducing SADC countries and the associated impact on employment levels in Lesotho and Mozambique given that these countries supply about 46% of the gold mining labour force in South Africa. The impact for these countries will therefore be on remittances, which form a major part of revenue earnings for these countries.
Dr K Syamujaye, Chairman of the SADC Ministerial Committee of Mining, made a presentation on the negative impact of gold sales on SADC countries. Ministers also requested the chairperson of the Committee of SADC Ministers for Finance and Investment, to communicate with the British Chancellor of the Exchequer, Gordon Brown, to examine means of avoiding further auctions of gold by the UK government. The chairperson was also asked to communicate to IMF SADC Ministers' concern regarding the intended sale of gold by the institution and its adverse effect on some of the very countries it wishes to assist.
Having periodic reviews of the eligibility criteria and consistent interpretation of track records. Countries such as Tanzania and Ethiopia will only qualify for HIPC in the year 2001, though they have had a good record of fiscal reforms for over 5 years. -Shortening the interim period of debt relief from six to three years for countries that implement IMF/ World Bank reform programmes, have social welfare programmes in place and observe the principles of good governance. -Reviewing debt sustainability ratios in order to provide deeper and wider debt relief. -Encouraging additional contributions to the HIPC Trust Fund since the lack of financing is the major obstacle to implementing the Initiative.
The relationship between SADC and the World Bank should be underscored by the need to bring about economic prosperity through structural transformation of African economies, industrialisation and capital accumulation. Further emphasis was placed on the need for infrastructural development, poverty eradication and human and institutional capacity-building in a manner that preserves Africa's resources.
Ministers discussed the declining trend of investment in the region, especially foreign direct investment, in light of shrinking domestic savings in member countries and the existence of foreign exchange controls that inhibit investment. Emphasis was placed on the importance of combining sound macroeconomic policies with efforts to attract investment to the region.
The Committee of Central Bank Governors presented reports on work conducted on recent economic developments and statistics for SADC countries. Another report dealt with work undertaken on national payment systems while a third report explained the training of officials on banking and economic issues in the region.
There was also a discussion on Year 2000 compliance. This discussion focussed on six broad areas of need.
Ministers were assured that remediation programmes are already in place to deal with the problem at a SADC level.
The 6th annual meeting of SADC Ministers of Finance and Investment will be in Mozambique in July 2000.
As reported in the last edition of the newsletter, two FISCU staff members have been involved in a project coordinated by the Centre for Research into Economics and Finance in Southern Africa (CREFSA) at the LSE, and External Finance Africa. The subject of the project was intra-regional private capital flows in Eastern and Southern Africa. A closing workshop was held in Harare, Zimbabwe, on the 21-23 June.
Six countries from the region were involved in the project, namely Zimbabwe, Zambia, Uganda, Tanzania, South Africa and Mozambique. The task of the country team was to collect data on intraregional capital flows, both qualitative (investor perceptions) and quantitative (for balance of payments statistics). Two economists from FISCU, Rosalind Mowatt and Themba Zulu, made up the South African research team. Each country research team presented a report at the closing workshop.
Overall, the project seems to indicate that regional direct investment is small but growing. This is due to South African companies moving into the region, as well as to outward investment from Zimbabwe, Kenya and Mauritius. South Africa was found to be an important source of direct investment in Eastern and Southern Africa, especially in Zimbabwe and Mozambique. There was also an indication that trade flows were closely related to investment flows - the patterns of intra-regional investment noted for the SACU countries, for example, were quite different to those of the other Southern and Eastern African countries. The project also found that equity finance was more important than non-equity finance for regional enterprises.
On the investor perceptions side, the various country studies showed a broadly positive picture of the investment climate across the region. The South African study showed that investors believe that conditions for investment are improving, and are taking a long-term view of investment. Some of the more negative factors highlighted, however, included infrastructure, financial factors and some features of governance.
The country reports also highlighted the difficulties inherent in collection reliable data on capital flows. There was a low response rate to questionnaires, and sometimes the forms were misunderstood by respondents. Ways and means of improving the response rate and on following up nonrespondents were discussed. The removal of exchange controls in many of the countries had also meant that an important source of capital flows data was lost.
The workshop was opened by the Governor of the Reserve Bank of Zimbabwe, Leonard Tsumba.
Some interesting conclusions were drawn from the South African report, which was compiled by FISCU. Looking at data from the Reserve Bank, it was discovered that South African investment in Eastern and Southern African had indeed increased markedly, with direct investment accounting for most of this increase. The their clients into the region. FISCU would welcome any paper further suggested that Investment incentives (tax comments or questions on the the Reserve Bank's figures holidays etc) were found not South African study. See the last may underestimate the value to be a primary reason for page for contact details.
by De Beers and South African Breweries seem to be financed through foreign subsidiaries. To escape was important.
African companies important. for gender mainstreaming in established international all aspects of its work, subsidiaries, and continue to One general criticism was including its development of finance their overseas that often government a regional macroeconomic investments in this manner. institutions in a particular convergence framework.
It was also noticed that country had conflicting instance, one of the issues of investment flows closely attitudes towards foreign concern in gender paralleled trade flows in the investment. A multiplicity of mainstreaming is to have region. South Africans hold a agencies dealing with gender receiving attention in far greater proportion of investment promotion and budget policy making. Some their assets in countries with facilitation was also found to Member States, for example which SA has a strong create problems and cause South Africa, are in the trading relationship e.g. costly delays.
Botswana, Zimbabwe, government intervention in "woman's budget."
Namibia). SA assets in the the economy was viewed region constitute but a small negatively by the companies FISCU gives full support to proportion (2.6% in 1997) of interviewed.
SA's total foreign assets, plan of action that aims to however - so South African In spite of the sometimes ensure the development of investment in the region is difficult conditions, however, a policy and institutional still small, but growing.
The investor perceptions in the region.
which influence the regional opportunities for investors.
South African companies.
Investors appeared broadly investors are more willing to strategic partnerships with positive about the region and accept some of the inherent other gender formations to its prospects.
African investors saw the understand the varying mainstreaming in the sector rest of Southern Africa as a situations in the different at the earliest stage possible natural extension of their countries, slightly better than and to deepen understanding market, with similar cultural their overseas counterparts of gender-based analyses.
and social institutions. Also, do. FISCU will endeavour to companies in the service promote gender sensitization sector were often following in various sub-sectors of Finance and Investment.
FISCU sent a delegate to this year's annual meetings of the SADC Regional Advisory Committee on Gender. Senior Officials as well as Ministers responsible for gender were in attendance at the meeting, held in Malawi from 24 to 28 June 1999.
Highlights of the meeting included gender training for delegates who had not participated before, proposals for capacity building for gender mainstreaming and a proposal containing terms of reference and budget for a gender audit of SADC sectors. The gender audit aims to study policies, projects and activities of, the various SADC sectors, including FISCU, with a view to recommending concrete sector-specific gender mainstreaming interventions.
July 1999 in Gaborone, Botswana. These meetings between the SADC Secretariat and the Sector Coordinating Units (SCUs) are held annually. This particular meeting was called to review the work of the SCUs in preparation for the SADC Council of Ministers and Heads of State Summit which was to take place the following month.
The meeting received reports from all the Sector Coordinators relating to their work in the last twelve months. It also looked at cross-cutting issues between sectors, progress with projects and relations with the organisation's co operating partners. The meeting provided an opportunity for interaction between the SCUs and the sector desk officers stationed at the SADC Secretariat in Botswana.
The meeting discussed the work to be presented to Council for consideration and the decisions requested of Council to take in driving the work of SADC. In this regard, the meeting considered the annotated agenda of the SADC Council of Ministers and identified other issues that should be brought to Council. These issues incorporated various aspects of the SADC sectors' work programmes and included matters that needed a Council decision.
FISCU, together with other SADC Sector Co-ordinators, was invited to attend the first SADC-USAID Program Review Workshop, which was held in Gaborone, Botswana, on the 14th July 1999. The meeting was also attended by USAID' Botswana resident staff, the SADC Secretariat and US government officials from Washington. SADC holds similar annual consultations with all its other cooperating partners to review progress made on projects, to assess strategic plans and to discuss ways of improving co-operation and delivery on existing and envisaged future projects.
The workshop was a follow-up to a high level meeting between the US Government Ministers' meeting with SADC Ministers which was held in Gaborone on the 14-15 April 1999. This meeting was aimed at establishing political contact between the US Government and SADC. The Joint Programme Review (JPR) was therefore, the technical arm or means of ensuring the achievement of these political objectives. The meeting, the first meeting of the technical staff dealing with projects, had a number of objectives. The main objective of the workshop revolved around the development of regional program of action for the purposes of establishing inter-sectoral networks and for information dissemination and sharing of ideas. Integral in this respect was the identification of current projects on the ground looking at how they have been performing up to the time of assessment.
The US Ambassador to Botswana, who is also the US Government's representative in SADC, officially opened the meeting. The Director of the Regional Centre for Southern Africa, Ed. Spriggs, and Dr. Felix Kani, Chief Economist in the SADC Secretariat, also gave a short overview and background on US-SADC co-operation.
FISCU gave a background to the Finance and Investment Sector in SADC, recent sectoral developments and structures, and work programmes. The meeting was also informed of the outcome of the SADC Ministers of Finance meeting in Maseru. After the presentation, there was a brief on the activities currently being funded by USAID in the region. Discussions on potential future programs, and on how co-operation between SADC Sectors and the USAID's Regional Centre for Southern Africa could be improved.
USAID had funded part of the Finance and Investment Sector protocol formation process, up to the stage of the development of an aide memoire. This aide memoire was adopted by the Finance Ministers as a strategy for developing the sector's protocol.
The meeting then discussed broad areas of USAID's involvement in SADC, and how further co-operation could be enhanced in these areas.
FISCU together with SATCC-TU and the Mining Sector (co-ordinated by Angola) participated in the Market Integration group where its work and mediumterm objectives were presented. The consolidation of the work of the three subcommittees forming the core of this presentation and ensuring that progress and momentum made under the SADC Governor's committee was maintained.
USAID and SADC pledged to strengthen the existing relationship by either expanding co-operation in existing projects but forging links in other possible new areas of co-operation. The meeting resolved to hold similar meetings in future.
Logan Wort joined FISCU at the beginning of July this year. The Finance and Investment Sector News interviewed Logan to discover what his aspirations for the Finance and Investment Sector are.
Can you give us some background on your career up to now?
I started off working in the insurance industry. In the 1980s, I worked full-time for a short while for the Cape Youth Congress. I was a youth organiser; we organised nationally for the establishment of the South African Youth Organisation, which eventually became SAYCO (South African Youth Congress). Then I worked for an Education Resource and Information Project at the University of the Western Cape, where I was involved in leadership training of youth and students, and occasionally got involved in trade union work. My career in management started with my engagement with the University of the Western Cape, where I was employed in the human resources department, responsible for the social responsibility programme and employee benefits. In 1996 the Western Cape Provincial government recruited me as a private secretary for the then-MEC for Health. I was a media officer, private secretary. The coalition between the NP and the ANC in the Western Cape ended and I had to leave with the MEC for whom I worked. That's how I ended up in Finance. The Minister (of Finance) invited me to apply for a position as parliamentary officer. In the same week that I started he seconded me to his office as a media person for a few days - it ended up being 18 months! Then I was invited to come and head FISCU. One of the key reasons why they felt I was appropriate to head FISCU was that I have a management background. Also because regional integration issues are highly political issues, and they felt that my political experience would help in accelerating financial integration.
I was never a full-time student. I started studying in 1986, I started my first year BA as a part-time student in prison, actually - through UNISA. But I couldn't really study in prison, and I was released halfway through my first year. I restarted my BA in 1988 through the University of the Western Cape. I always studied parttime and I completed my Masters degree in Public Administration at the end of 1997.
Has your experience at FISCU so far been different to what you expected - how have you found the past two months?
My first two months at FISCU have been both overwhelming and exciting. Overwhelming because of the scope of the responsibilities of FISCU the scope of regional integration in the area of finance and investment is very broad. FISCU's focus on four areas - monetary and financial issues, investment promotion, development finance, and macroeconomics - is too broad to really apply itself to the direct areas of integration. Issues of accounting and auditing, and non-banking regulation, and even the whole question of information technology, are largely not addressed by the sector, for example. It's overwhelming in the sense that the challenges facing the Finance and Investment Sector are only just beginning to be met by FISCU. Overwhelming in the sense that FISCU really needs to up its pace of work and output, as well as its interaction with member countries. It must participate more, it must be much more interactive. Its budget must increase, and its staff complement must increase. FISCU's status within the region, but also within the South African Department of Finance, needs to be reviewed if it wants to meet the challenges of regional integration.
It's exciting because South Africa is very well resourced to lead the integration process in the region. It's got the correct attitude, the correct spirit, the correct vision, and it also seems to have the moral position to take with it both better and lesser developed countries. This is a position that can be built on to an unlimited extent. It's also exciting because the FISCU staff lend themselves to that exciting challenge - I think we have a nice young team, who seem to be willing, given the correct leadership, and who, it seems to me, can grow with the programme to become professionals in their own right. It is also important that we, in the longer term, engage other regional individuals within the Finance and Investment Sector.
With the exception of the Central Bank Governors, there hasn't been much progress in the region with regard to Finance and Investment. What in your opinion have been the main obstacles to this?
I would want to identify broadly two areas - one, the lack of a manager within the Unit. I didn't realise the extent to which it had an impact, but now I'm beginning to realise that in FISCU there was clearly a leadership vacuum. The kind of leadership or management style that I want to introduce, is not only to fill the leadership vacuum, but to enable the FISCU team to be able to operate even with a leadership vacuum. And so, yes, one of the reasons for the stifled growth, especially on the side of the Senior Treasury Officials, has been the lack of leadership and direction due to the departure of the previous Director. The remedy is not necessarily the fact that I'm now here, the remedy is more long-term in that FISCU as a team might be enabled, so that FISCU runs whether it has a manager or not. I think the broad context, the broad vision and mission, the details of the individual and collective work programme of FISCU, should be to enable the FISCU team to manage the programme themselves. Maybe because such a vision and programme was absent originally, it had the kind of negative impact on the structure that I hope we can remedy.
I think the very important other factor which contributed to the stifled development on the Senior Treasury Officials side, is what I perceive to be a weakness in the way that side of the FISCU operation is structured. One, there seems to be a very weak form of co-ordination between member countries. There seem to be very poorlydefined programmes of action for the subcommittees, ill-defined roles for the chairpersons or the co-ordinators of these subcommittees, and far too infrequent interaction in the form of meetings and projects between countries and senior officials, and clearly that affected the level of output. And the level of output means integration. So, because of the urgency of integration - not only because of the political correctness thereof - because of the urgent need for investment, because of the urgent need for development finance, and because of the urgent need for macroeconomic convergence, there's a lot of pressure on FISCU, and on national governments to address structurally the problems facing that side of FISCU's work.
Do you have the sense that there is sufficient political will in SADC for the Finance and Investment Sector to really achieve a lot?
In my two months here, I have no reason to doubt there is political will. To say there is "sufficient" political will is difficult to say. "Sufficient" is a very relative term, it's really academic. Political will does exist. What there isn't, is the concomitant action to give meaning and content to that political will. My own view is that national governments, central banks and treasury officials, should adopt and internalise that political will for regional integration. It must be part of their national agenda, so that when there are integration initiatives, there should be an eagerness to want to co-operate and those perceived obstacles and threats that come with integration, should be dealt with very early, very upfront, very soberly. It's integrate or perish, really. And because we realise it's integrate or perish, only we can solve those fears, those threats, those problems, that come with integration. We should rather focus on the strengths and deal with them. That must be internalised by national governments for it to work on a regional level. And therefore the roles of the leaders of the subcommittees with FISCU, and the Senior Treasury Officials and the Central Bank Governors, become paramount in the way that they lead the process.
Do you have a vision for the Sector, and what would you like to see it achieve over the next year?
It's very practical. Between now and the next Finance Ministers meeting (in July 2000), we must have a very detailed and definite work programme, including dates and timeframes for each of the subcommittees. We must have the principlesframework that will guide us with the Protocol, and we must have the basic elements of our first core Protocol. For me, if we achieve that then we have achieved a lot. That's one. Two, we must have the three Senior Treasury Officials subcommittees up and running, with meetings, programmes and targets. And thirdly, the research and academic capacity within FISCU must be re-ignited and marketed. In fact, within the next three years, FISCU must become the regional reference point on finance and investment.
Why will the Finance and Investment Sector only be coming up with a Protocol in 2004?
Two reasons. One, because the Finance Ministers decided so! But really, the thinking behind it, on the side of the Finance Ministers and the Senior Treasury Officials, was that we prefer a developmental, functional, sequential approach to the development of the Protocol. For us, the Protocol must be the result of a series of activities or agreements or actions that are operating. One can try to create the ideal protocol and try to implement it; this is the general approach that SADC is following. And if that works, it's fine. Our understanding with the Finance and Investment Sector, is that confidence is often built through what exists. Investment comes through infrastructure existing, through payments systems that work, and so on. And so for us, a Protocol must be the culmination of a series of integration policies that operate and exist. Two, for us, to facilitate the process of writing up a Protocol and getting it ratified is far easier when you write up something that is already operating, and have it ratified because it operates, than to write-up something, have a debate for two years, take another three years to have it ratified, and then taking the next five years to implement it - you've lost so much time. And, like I said, for us in the region - given the globalisation of the economies of the world, given the vulnerability of international financial markets - for us it is integrate or perish. Investors don't want to invest in a country, they want to invest in a region. And when they invest in a region, they don't see borders. And we in the Finance and Investment Sector need to find a way to destruct those artificial borders without undermining the political and other sovereignty of hardearned freedoms of these 14 countries.
This year's SADC Summit was representative of the significance of improved relations across nations and the region. The Presidents of Nigeria, Rwanda and Uganda were invited as guests of honour, and expressed their appreciation for the wider cooperation within Africa. The President of Nigeria further expressed hope of meaningful closer relationship between the region and ECOWAS. The Summit took place on the 18th August 1999 in Maputo, Mozambique, and was prefaced by festivities to commemorate the SADC Day.
Various speakers delivered key speeches, which laid stress on a number of factors for serious attention if regional integration is to become a success.
In the main, the range of issues that were debated by the Heads of States proved predictable. Among others, these were the conflict in some parts of the region, the gold crisis, debt and the change-over of the chairmanship, to name but a few. Perhaps, the dramatic moment of the Summit was the resignation of the SADC executive secretary.
Topping the agenda was concern about ongoing war in the Democratic Republic of Congo, Angola and rising tensions in Namibia. (However, at the time of writing, positive developments were already emerging in the Democratic Republic of the Congo, with the residual rebel group giving definite promises of acceding to the cease-fire agreement on the cessation of hostilities). In Angola, there was increasing disillusionment with the continued hostile attitude shown by Savimbi, and SADC pledged non-military support to the country. Namibia's "inviolability of the territorial integrity" was affirmed at the meeting.
The Council of Ministers was instructed to review several SADC structures, including the Organ on Defence, Politics and Security. The report is due in six months and Zimbabwe will meanwhile remain chair.
excellent pointers to principles agreed upon at the Convention should be consolidation of the SADC Finance Ministers viewed holistically i.e. the democratic process in the meeting (see page 1). scope should entail trade, region. Already, democratic finance, investment and elections were successfully Other issues included gender development issues.
Namibia, Botswana and low participation rate by host of the Summit in 2000.
Mozambique will be staging women in the region, which theirs before the end of the was viewed with concern.
the positive, but insufficient economic growth in the region. While the majority of the countries in the region continue to display healthy economic potential, this has not been accompanied by substantial inflows of foreign direct investment. Economic reforms have been implemented and there macroeconomic stability in many of the SADC countries, but there is still insufficient investment in the region. Consequently, the meeting agreed on the need to promote more vigorously to 30 percent target in the public sector (e.g. parliament). Furthermore, member states were urged to devote more resources to overcome the spread of HIV/Aids. A conference on the epidemic will be staged in Zambia. The Summit noted the progress made in the Transport and Communications, Finance and Investment, Energy and Water in respect of Y2K compliance and urged member states to step up their efforts to deal with the issue. The Southern Africa Economic Summit is an annual event organised by the World Economic Forum, which is based in Davos, Switzerland. It was attended by representatives from the political and business spheres, from all over the world. This year's gathering was held in Durban, South Africa and among its guests were the new President of South Africa Thabo Mbeki and his Mozambican counterpart President Joaquim Chissano.
cross-border investment through, for example, joint venture schemes. As at the SADC Ministers of Finance meeting the month before, any sale of gold was seen as critical in further depressing the bullion price. The meeting called for the IMF to reconsider its position on the sale of gold. (In fact, the current stand by the IMF is review of its sale of gold, but uncertainty still remains on future sales by central banks). Further support was given to cooperation among regional organisations. However, this can take place by first and foremost strengthening the development of such structures to prepare for a wider continental cooperative framework. Cooperation is, for example, envisaged with the ECOWAS, and other regional blocs. Such cooperation is indispensable for the creation of a broader African Economic The imminence of the new millennium was seen as posing daunting challenges to the region with regard to the tackling of issues such as poverty, social conflict, guaranteeing of democratic values and promotion of economic growth. Hence this year's theme was aptly "Responsible Leadership for Action, Stability and Growth". The theme is significant because of its generic relevance to the concept of African Renaissance.
A number of topics were dissemination and an active identification of four sectors dealt with under organised process of continual across SADC that can be break-away sessions, and interaction was considered to opened up to private these ranged from topics be critical for the effective ownership with immediate such as the attraction of attraction and promotion of effect.
foreign investment, the investment. Questions were was stalling when time was promotion of democracy, further asked as to the nature not on its side; it needed to human resources of the brand and what it move faster!
development and would entail. Tourism, infrastructure development.
These were then collated infrastructure development number of projects doing together for presentation at were considered as areas rounds within the region, the plenary. where regional facilitation and little substantive could be achieved. progress is visible.
Below is an outline of the therefore a need for a discourse that took place - The level of commitment rationalisation of SADC.
during the general of individual member states Other participants even discussions.
A revolving theme was the question. Political will was to speed up the process.
SADC; 'somebody' to push had resulted in incoherent better coordination within the process of regional signals from the region, the SADC Secretariat.
integration forward and to which did little to strengthen move at a faster rate than confidence. National - Mention was made of the currently is the case. That sentiments were still very fact that local investors were role naturally was assigned to much an overriding factor.
South Africa. The greatest Delegates were also investment promoters, and challenge to South Africa is concerned about widespread as a result domestic private her own developmental practice of SADC countries sector base has been problems. Perhaps the best being members of far too underdeveloped. Emphasis way to achieve this is for many regional structures.
South Africa to lead by was felt that this stifled focus investment promotion example, in the way she momentum for regional activities on encouraging resolves these formidable integration, as seen in the domestic investors with a challenges. delay to operationalise the view to supporting their trade protocol.
The elusiveness of foreign labour absorption.
investment was attributed - The conflict in Angola has should establish its own largely to negative publicity put brakes on FDI inflow 'multinationals' to compete of the region. Widely known into SADC. Also, the globally, because economic by the international investor wisdom of including the agents such as big community are occurrences Democratic Republic of companies, rather than of war, political uncertainty, Congo and the Seychelles nations, drive globalisation.
corruption and economic was questioned, given that Not being part of this global stagnation. The idea of already SADC is too large a process was not an option.
'branding' for the purposes group.
Africa as an investment -To accelerate reform, dealt with the development location was brought forth.
More information is a need for the consequently the potential of small-and medium-sized enterprises is untapped.
Capacity-building is another area that has been neglected in the region. Concerns include the empowerment of women, an increased fight against the Aids epidemic, increase in spending for education, and skills promotion. Training programmes designed to encourage human resource development were indispensable, and this among others required agreement on the free movement of people across borders. Women were considered an under-utilised resource in the region, and the need for their participation in the Forum's plenary sessions to be as comprehensive as possible, was stressed.
The lack of effective financial inter-mediation could be overcome if existing stock exchanges were to co-operate, with South Africa's stock exchange as the axis for the region. The number of stock markets currently existing in the region was considered to be more than adequate. The European Union is faced with a similar situation, playing host to about 35 or so stock markets. Cooperation with the JSE will be a quick, simple and less costly way of establishing a functional arrangement to ease the constraints around financial inter-mediation. The movement of primary listing by some of the big companies such as Old Mutual, SAB, and others was taken as an ominous sign to the outside world. However, in defence of this move, listing on foreign bourses was not considered a matter of permanent migration.
Other issues that recurred in the forum revolved around the establishment of effective dispute resolution mechanisms, the improvement of the FDI regime, harmonisation of corporate laws, consolidation of the empowerment process to allow for SMMEs to develop, and the removal of exchange control. Social issues included Aids awareness, the role of the state as a catalyst to society, upliftment of the skills pool in the region through cooperative arrangements, education, and the significance of ethics within the business community. SADC was viewed as being comparatively uncompetitive in terms of transactions and transport costs.
Labour issues included labour market flexibility and the fear of dealing with the unions because of their power. Unions holding back economic development.
Some companies in the region were implementing the recommendations of the The verdict from the discussions of the Forum was clear that SADC's progress should be communicated to the outside world, given SADC's reliance on overseas countries for FDI. Domestic investors should not be alienated by policies aimed at foreigners, however. Also, the spectre of political instability, elusive economic growth, global competitiveness, high unemployment and low per capita incomes will have to be dealt with more effectively, in order to realise the ideals espoused by African Renaissance. If SADC has to become a force to be reckoned with, indeed major changes will have to be undertaken.
King Report on good governance. Good governance also encompasses ethical conduct.
On the other hand, it is clear that investors appreciate the level of progress that has been attained so far. The Forum therefore remains a critical interlocutor between investors and the policy makers and serves as a platform for the restoration of confidence in the collective struggle for a harmonious SADC.
13-15 October: Committee of Central Bank Governors, Sun City. 8 October: Committee of Stock Exchanges, Victoria Falls. 26-28 October: Annual African Investment Conference and Exhibition, Cape Town.
FISCU would like to extend a warm welcome to the new secretary to the Director, Ivy Makapane. Ivy joined us at the beginning of September. We hope you are going to enjoy working with us, Ivy.
Veronica Sethu, previous secretary to FISCU, is now secretary for the Chief Director of International Development Finance.
FISCU, Private Bag X115, Pretoria, 0001, South Africa. Tel: +27-12-3155395 Fax: +27-12-3155108 E-mail: fiscu@finance.pwv.gov.
makapanem@finance.pwv, g ov.