Fundamental change necessary to compete with China

There is a tendency in many South African boardrooms to look at Africa through the “hopeless continent” paradigm, when in fact it is rapidly evolving, says Paul Runge of Africa Project Access. “Many South Africans are stuck with a primitive strategic outlook of the continent: disease, corruption, mayhem, small and fragmented markets. And while this still applies in some cases, it is far less than previously.” According to Runge, this is one of the reasons why companies are losing considerable market share to competitors from the East. Says Duncan Bonnett of Whitehouse & Associates: “The boom in sub-Saharan Africa and the sharp increase in the sub continent’s project flow is being driven by sustained improvements in global commodities prices from oil to copper, gold, coffee or cotton. Thus, other countries in Africa are growing faster than South Africa and their economies have rebounded quicker than ours.” It is this treasure trove to which the Chinese are flowing, says Bonnett, who believes that African countries are going to have to address some fundamentals if they want to compete with the onslaught from the East. “We will have to use our financial instruments much better. Asian countries assist their exporters with a wide range of instruments supplied by their national donors, development finance institutions and export credit agencies.” According to Runge South Africa must also make better use of government departments and high-level presidential and ministerial visits as well as export councils, industry organisations, research houses and specialist service providers on the continent. “It is time for companies to pool their resources to create synergies, not competition and thus ensure success in a very difficult environment,” says Runge.