Southern Africa Europe CEO Dialogue celebrates 10th year as bilateral trade reaches record levels

Johannesburg - The ‘South Africa Europe CEO Dialogue’ has marked its 10^th anniversary in Johannesburg with the strong message that “trade is the only antidote to wars” and to global prosperity and growth.

Over 200 of the most influential business leaders from Africa and Europe gathered at the Marriott Hotel in Melrose Arch this week for the important investment and trade gathering, which has over the last decade stimulated strategic economic relationships and investment collaboration prospects across various industries.

The event was founded and is organised by leading global think tank, The European House – Ambrosetti (TEHA is the number 1 private Think Tank in Italy, fourth in Europe and among the top 20 globally), in collaboration with the Gauteng Province, Gauteng Growth and Development Agency and a selection of international public and private stakeholders, including CLN-MA, Danieli, Sisal, BBM Law, DHL Express, Aspen Pharmacare, Musina-Makhado Special Economic Zone, Italian Trade Agency, Brand SA and Italtile.

The CEO and Managing Partner of The European House – Ambrosetti, Valerio De Molli, said in the period since the Southern Africa Europe CEO Dialogue was started overall commercial trade between European Union and SADC countries had increased over 50% between 2014 and 2022, mostly driven by import that almost doubled between 2014 and 2022, reaching 55.8 billion Euros.

Bilateral trade between Italy and SADC countries accounted for 10% of total European trade, reaching a peak in 2022, with record high value both in import (6.1 billion Euro) and export (3.3 billion Euro) in 2022.

De Molli said the trade relationship between Italy and Southern Africa largely ensured that despite being strongly impacted by COVID-19, SADC fully recovered in 2022 and surpassed the global average of growth for the first time in seven years with growth of around 4%.

In emphasizing Italy and Europe’s importance as major trade partners on the African continent, the Director General of the Italian Trade Agency, Lorenzo Galanti, said there were currently 1 740 Italian companies operating in Africa, employing 75 000 people, with Investment stock amounting to 26.8 billion Euros.

“There is an obvious growing centrality of the African continent on the global sphere in all respects and a strategy of engagement with African states on all fronts, including trade and investment. The African continent is of increasing relevance from a geopolitical standpoint and Italy has an all-encompassing strategy with a broad approach in areas including manufacturing and machinery, engineering and construction, mining, extractive technologies and the green and environmental sector. We look forward to redoubling our efforts to achieve stronger investment flows with all African states, particularly Southern Africa,” said Galanti, as he hailed TEHA’s role in linking European and African companies and governments.

De Molli said some of the highlights of the Southern Africa Europe CEO Dialogue over the last decade was the funding of an automotive plant in South Africa, acquisition in the field of Agro- industry by a leading consumer goods company, an agreement between two primary railway operators, the funding of a plant for renewable energy production, a roadshow for an international electricity transmission operator, the launching of township cooperation projects and a pilot project for skills development in the automotive sector.

De Molli said one of the major trade linkages TEHA has facilitated was partnering Johannesburg in the Gauteng Province as the “perfect business match” to Milan in the Lombardy Region, as Gauteng is the largest contributor to the South African economy accounting for 33% of the national GDP with $98 8illion and Lombardy as the largest contributor to the economy of Italy, making up 22% of the national GDP with 384 billion Euros.

Former Italy Prime Minister, Enrico Letta, who is now the European Union Rapporteur on the Future of the Single Market, provided the Dialogue with some fascinating insights and lessons into the European Union’s journey to a single market, as Africa prepares to roll out the African Continental Free Trade Area (AfCFTA) as the world’s largest free trade area by the African Union.

“Trade is the only antidote to wars. We are at a moment in which wars around the world are present. CEO’s and representatives of business have an enormous role in extending trade and quelling tensions. We are in a fantastic moment for the future relationship of Southern Africa and Europe. We can establish a new era, because there is no complicated tensions and conflict. We have a constructive approach, we firmly believe trade is the only antidote to wars. Only investing in fair trade means a world without wars. All the hope, possibilities to extend this agreement between Southern Africa and Europe is a reason for engagement between political leaders and CEO’s of business,” said Letta.

The former Italian Prime Minister said the EU was in the third year of the European single market, and there were a number of reasons it was the biggest at world level today, which he shared at the Johannesburg summit as valuable lessons for a prospective African free trade area.

“Any single market is successful if it is incremental. It is impossible to start altogether in a broad, complete way. We started with 12 countries in the EU, now we are 28 and in the next decade we will be at 36 countries as part of the European single market. It is important that a group of counties who are more homogenous start together with good will. A single market can only be successful, if it is united Without that, it’s impossible to get success. Without convergence and clear policies it is also impossible to have a successful single market. There is also no trade successes without a strong narrative. The idea of a single market in the EU started with the end of the Cold War and fall of the Berlin Wall, which symbolized freedom of movement and a new beginning. Without a dream its impossible to have a single market.  Heart, emotions and a strong narrative is the only way to mobilise energies,” said Letta.

He added that it was also important to have a strong legal system with sanctions in place agreed by all countries to govern a single market. It was also important to give business the confidence that single markets were not dependent on political power, otherwise CEO’s would not invest in a single market.

Letta’s lessons struck a chord in Africa where the African Continental Free Trade Area was entered into force in May 2021, connecting more than 1.3 billion people. It will be the largest free trade area in the world, with a combined 44 countries with a GDP of $3.4 trillion.

Within the Global Gateway, the European Union and the African Union have agreed on an Africa-Europe Investment Package of 150 billion Euros.

Old Mutual Chairman, Trevor Manuel, said it was important at forums such as the Southern Africa Europe Dialogue that when engaging on investment projects, economic growth must be measured in terms of how it impacts on the lives of ordinary people, on their quality of life and on poverty reduction.

Manuel said while Africa’s young population was a major benefit, it was important to note that Africa’s population was growing faster than their economies are growing and this challenge needed to be addressed.

Manuel also cautioned that while the large majority of African countries still qualified for World Bank loans, over half of the continent’s countries were debt stressed and in trillions of dollars of debt.

This situation was exacerbated by $ 5.7 trillion dollars of aid not being granted to Africa as part of Official Development Assistance (ODA) agreements, which was sorely needed by African countries.

Despite Africa’s challenges, Manuel said there was a strong will and positivity from the African continent to change its fortunes for the better.

“There have been big changes on the African continent over the years, such as the replacement of the Organisation of African Unity with the African Union. The New Partnership for Africa’s Development happened because a few like-minded heads of state said we have the responsibility to change Africa together. Our responsibility is to drive change in Africa and they did. We as Africans have an enormous responsibility. We have to reinvigorate that kind of energy and that is the kind of change Africa needs,” said Manuel.

In the session on Africa’s geopolitical, business and investment outlook, the CEO of Evening Star Manufacturing and Trustee of the Oliver Tambo Foundation, Nomatemba Tambo, said the decade of the Southern Africa Europe Dialogue was characterized by common dreams, rich cultural exchange and shared ambition.

“History has taught us growth is not linear or isolated, economic growth must be truly meaningful in other aspects of society. The future of South Africa rests heavily on the empowerment of our youth and women. They are not just our future, they are our present, standing at the forefront of successful economic transformation. The youth are not merely participants of economic growth, they are the architects of our future, with an unquenchable thirst to contribute. We must ensure the education system in South Africa is productive and nurturing the great potential of our youth, who are innovative and ambitious in areas that fall outside of traditional approaches. We are planting the seeds for a brighter future by investing in them and Italy offers abundant opportunities, support and dynamism to Southern Africa,” said Tambo.

In a political debate with political parties on South Africa’s future 30 years after democracy and beyond, the African National Congress’ Secretary General, Fikile Mbalula, said private-public partnerships such as those facilitated by the Southern Africa CEO Dialogue were critical in helping to fix the country’s energy crisis and provide support for small business, rural and township communities.

Action SA leader, Herman Mashaba, said unequivocally that he believed the country’s current government needed to be removed and that entrepreneurs needed to be allowed to operate without government interference.

The Democratic Alliance leader, John Steenhuisen, said South Africa’s most critical challenge was solving the energy crisis and removing the monopoly of generation supply.

“We need to bring in the private sector to bring in efficiencies and cut all red-tape when it comes to trade and entrepreneurship. You need a capable institution. The power situation is worse than before. The model of state ownership cannot fix our energy crisis,” said Steenhuisen, adding that the biggest beneficiary of a good government is poor people.

“We believe in inclusive growth to grow our economy. There is no issue about the role of the state. The rule of law in South Africa is our biggest guard. South Africa has the best banking system in the world. We have a solid state and we need to build solid institutions,” said Mbalula.

Danilo Dreolini, Danieli CEO Africa, highlighted that “Danieli - a reliable and innovative partner in the metal industry - is a major player in its field, offering the best-available technology and a wide portfolio of products and services.

“Africa’s steel market has huge potential. Thanks to our focus on sustainability, technology, and partnership, Danieli is collaborating with local businesses to strong contribute to the development of the African metal industry,” said Dreolini.

After a decade of stimulating trade and investment opportunities between top African and European companies and Governments, the 10^th edition of the summit also celebrated the opening in South Africa of “TEHA Africa” as the global think tank solidifies its presence on the continent, with former Finance Minister Nhlanhla Nene appointed as TEHA Africa Chairperson.

The 10th edition of the Southern Africa Europe CEO Dialogue concluded today with side events on the themes of “Doing business in Gauteng”, “Young business leaders today” and a series of high-level bilateral business meetings.