Johannesburg: South Africa's economic diplomacy must become bolder and more strategic while also focusing on the African continent if it is to withstand escalating global uncertainty and advance its development goals. This was the central message delivered by Minister of International Relations and Cooperation (DIRCO) Ronald Lamola at a high-level Presidential Working Dinner with South African companies operating across the continent.
According to South African Government News Agency, the working dinner, which forms part of the G20 Outreach Programme, was held on Tuesday evening at Investec, Sandton. Speaking ahead of the G20 Leaders' Summit, Lamola emphasized that South Africa is hosting the G20 'at a unique moment,' marked by widening geopolitical fractures, volatile trade tensions, and shifting global power centers. He noted that the government is refining an economic diplomacy strategy based on key assumptions and aspirations in response to these global uncertainties.
Minister Lamola conveyed to business leaders that President Cyril Ramaphosa had instructed him to convene the dialogue following the European Union's Gateway announcement. This underscores the strategic importance of ensuring that South African companies receive support as they expand into African markets.
Lamola outlined the government's emerging economic diplomacy strategy, which is built on foundational assumptions and aspirations aimed at positioning South Africa more competitively. Central to this strategy is the enduring principle that 'Africa is our home; Africa is our destiny,' a theme that has been a cornerstone of South African foreign policy for three decades. The strategy aims to attract investment, stimulate growth, and strengthen regional value chains, especially in critical minerals and manufacturing sectors. These objectives align with the 2024-2029 Medium-Term Development Plan, prioritizing inclusive growth, reindustrialization, and the expansion of South Africa's trade footprint.
The Minister highlighted Africa's vast economic potential, including a young population, abundant mineral resources essential for the global energy transition, and a growing market that could reach USD 3.4 trillion under a fully implemented African Continental Free Trade Area (AfCFTA). Nonetheless, he acknowledged persistent obstacles, noting that only 16% of Africa's trade is conducted within the continent, and the Southern African Development Community (SADC) region sits at 21%. Lamola argued that South Africa must aim for 50% trade integration within the SADC to significantly boost continental trade.
Minister Lamola introduced three 'provocations' to guide discussions with business leaders, comparing them to a three-legged pot holding Africa's future economic prospects. The first provocation emphasizes the need to deepen regional investment reciprocally. South African companies have historically been pivotal players in African markets, contributing to infrastructure development, expanding telecommunications, and growing financial and retail networks. However, these achievements are often undermined by policy uncertainty, inconsistent regulations, stringent exchange controls, and occasional unfair treatment of South African firms. Such challenges hinder the growth of regional value chains, Lamola warned.
Lamola announced the establishment of a new coordination platform, the Committee for the Coordination of Economic Diplomacy (COMED), by DIRCO and the Department of Trade, Industry and Competition. This platform aims to unlock opportunities across the continent by bringing the government and private sector together to advance South Africa's economic footprint. Additionally, a new investment facilitation framework is under development to support companies through foreign economic offices, improve regulatory guidance, strengthen risk-mitigation tools, and enhance dispute-prevention mechanisms. This framework will be anchored in the Protection of Investment Act and complement both the AfCFTA Investment Protocol and the World Trade Organization's Investment Facilitation for Development.
The second leg of the 'three-legged pot' addresses growing public skepticism at home toward regional integration. Lamola emphasized that the government must tangibly demonstrate that regional cooperation and intra-African trade generate meaningful economic benefits for ordinary South Africans, not just political leaders or commercial elites.
The third leg calls on business leaders to embrace long-term thinking and resist the temptation of short-term gains. Lamola argued that sustainable profits and broader societal returns are not mutually exclusive and that a narrow focus on immediate profit 'serves none of us.'
In closing, Lamola acknowledged that the 'three-legged pot of provocations' requires a vital element: the fire to keep the pot burning. He asserted that it is the responsibility of all present to start this fire. Through President Ramaphosa's leadership, key societal actors can be mobilized, especially those in attendance. Lamola credited President Ramaphosa's leadership, strategic judgment, and Ubuntu-centered approach as crucial to galvanizing this collaboration.