Under Construction: Africa's Economic Highway to Brazil; an Exciting Venture Linking South Africa's Gauteng Province with Brazil Could See the Beginning of a Genuine South-South Economic Partnership. the Windfall Benefits for the Rest of Africa Could Be Enormous. Tom Nevin Reports
Nevin, Tom, African Business
An energetic economic discourse is developing between the South Africa's Gauteng province and South America's economic giant, Brazil. That follows the realisation that, to coin a phrase, there's an awesome amount of opportunity from Brazil.
Now, a transatlantic economic superhighway linking Gauteng and Brazil is under construction. Its aim: To stimulate and build growth in trade and industrial added value.
Dialogue, inspired by the Gauteng Economic Development Agency (Geda), between South Africa's merchants and industrialists and their counterparts in Brazil is invigorating the flow of products, ideas and capital and realising the massive two-way potential waiting to be exploited.
The first major cooperative step between Gauteng and Brazil is an informal agreement between Geda and the Brazilian Machinery Manufacturers Association (Abimark) aimed at encouraging trade and investment in the sector. More specifically, the lynchpin is to persuade Brazilian machinery manufacturers to set up plants in Gauteng.
"Today we buy machinery from manufacturers the world over," says Rui Fragoso, Geda's general manager, South America. "What we're now beginning to realise is that most of what we buy in foreign markets is available in Brazil at comparable, if not better, quality and price. Instead of importing such machinery, we believe we should be cooperatively manufacturing locally, at the same time creating new industry using South African resources."
In association with Geda, Abimark is identifying Brazilian manufacturers willing and able to advance this ideal, "and there could be as many as 5,000 of them, such is the maturity and size of that market," reports Fragoso. "Our first task is to ascertain South Africa's real needs in the sector, and then identify which Brazilian manufacturers best fit the bill. The balancing act is how to achieve a synergistic solution that promotes and develops the South African industry, but does not disrupt the Brazilian one with the loss of production, revenue, growth and jobs.
"We must convince Brazilian business-people that it is to the advantage of Brazil, and to their companies, to set up factories in Gauteng. At this stage it's a learning curve, and we are getting closer to the answers."
ON THE GROUND EVALUATION
Visiting South Africa recently was Thomas Fiedler de Moraes, Abimark's foreign business manager. His mission was to identify 20 Brazilian companies and invite their management to tour Gauteng in June for an on-the-ground evaluation of the province's partnership potential.
The visit is being preceded by "masses of homework", says Fragoso. "We're leaving nothing to chance. When the Brazilians arrive, they'll already have received in-depth information on the country, full background on the companies they will be visiting, and why Gauteng is the best province for them to put down their roots. The personal experience will complement the information they will have."
The Abimark visit is a trailblazer of sorts. It will set the scene for similar initiatives in the future involving other sectors. "The way things are being planned, Gauteng will contribute to economic growth in Brazil while generating investment here," says Fragoso.
The 'homework' Fragoso's team has set itself is formidable. "We know that our aim of generating jobs and investment through such cooperative activities is feasible and eminently workable. We need to identify the obstacles, and ask ourselves why this kind of economic interaction has not taken place in the past. Once we know what those problems are, we will find ways of removing them."
One of the biggest is logistics, or rather the lack of it. …