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The tale that Mr Latta told

1st November 2019

By: Martin Zhuwakinyu

Creamer Media Senior Deputy Editor

     

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I’m not sure what to make of remarks by Nick Latta, a counsellor at the British high commission to South Africa at a conference in Durban a fortnight ago. He said the UK decided the break away from Europe in the so-called Brexit move because of its belief that the future of trade lay in broader relationships with Asia and Africa, the world’s fastest-growing regions.

Latta, who spoke just days before the UK secured a Brexit deal with the European Union (EU), added: “We have big ambitions for trade with Africa, and especially South Africa, which is a leader and influencer for the rest of Africa.

“It is clear South Africa is a gateway for many businesses wanting to enter Africa, and many large African companies have headquarters in Johannesburg.”

Trade may have been a consideration when some among the British elite decided to push for the severance from mainland Europe, which appears to be imminent. But if you ask me, there could have been any number of reasons. They include the argument that continued membership of the EU threatened UK sovereignty, since a series of EU treaties entered into in recent decades shifted a growing amount of power from member States to the union’s bureaucracy in Brussels, the Belgian capital.

There was also unhappiness about the EU statutes granting citizens of one member country permission to live and work in any of the other member countries. It is said that, in 2015, net immigration to the UK by citizens of other members countries of the bloc was about 300 000 – a significant number, given the UK’s size. This gave ammunition to anti-immigration demagogues like Nigel Farage.

Other motivations for the ‘leave’ sentiment included the argument that the UK could keep the money it currently sends to the EU, the belief that the euro had become a disaster and that the EU was strangling the UK with burdensome regulations.

These, to me, are more cogent reasons than the tale that Brexit was motivated by a desire for increased trade with Asia and Africa. Perhaps it was a case of Latta telling his audience what he thought they wanted to hear.

Latta’s remark about South Africa being a gateway to the rest of the continent may have been accurate a few years ago, but certainly not today.

But let’s deal with the concept of a gateway first. A gateway country takes on a greater role within its region, emerging as the natural leader. Because of the size of its economy and its advanced infrastructure and financial institutions, South Africa does seem to fit the bill.

However, as Duncan Bonnett, director of Johannesburg-based research and consulting company Africa House pointed out to an interviewer not so long ago, the country is more a gateway to Southern Africa. That, too, can be challenged: South Africa is not the gateway to Angola, for instance, while it is only partially the gateway to Mozambique.

Thus, one can say the country is the gateway to the landlocked countries of Southern Africa only.

The bad news for Mzansi is that the emergence of growth axes on the continent away from South Africa has resulted in an increasing shift in goods supply from South Africa. This is becoming evident in the mining and oil and gas industries, for example, where a lot of goods are coming in from China. Companies from the Asian country probably now enjoy more influence on the continent than their South African counterparts, with Indian companies also growing their influence.

What proponents of the gateway narrative seem to miss is that business in Africa requires a local focus. Our continent has 55 countries whose people have diverse cultures. This, then, implies that, for a company to be successful in Africa, it must be on the ground, and not operate out of an office in Johannesburg or Cape Town. Debbie Goodman-Bhyat, CEO of research company Jack Hammer, expressed this succinctly when she said: “Companies are now looking for country managers, executive leadership teams and sales offices based elsewhere on the continent, in large part because they are starting to realise the value of having a physical presence.”

That’s spot-on, Ms Goodman-Bhyat.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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