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Can South Africa grasp Africa’s opportunity?

March 7, 2011

AFRICAINVEST-SUMMIT/GORDHANWhile Africa becomes ever more attractive for local and foreign investors, the biggest danger for its biggest economy is that it fails to seize on the opportunities it has in the changing world, South African Finance Minister Pravin Gordhan told the first Reuters Africa Investment Summit.

Plenty of short term money has flowed into South African assets – something of a headache for its policymakers as a strong rand currency makes its exports less competitive even if it helps keep inflation under control.

But Gordhan reiterated the importance of the longer term changes South Africa needs to agree upon if it is to thrive.

“The current transition and structural changes that are happening around the around the world offer South Africa huge possibilities and the risk is that we miss that opportunity,” Gordhan said, when asked about the biggest risks facing South Africa.

Central to success, he believes, is a dialogue between government, business and other interest groups such as powerful unions – who were instrumental in bringing about the end of white-minority apartheid rule nearly two decades ago – to agree a way forward.

Everyone would have to give ground, Gordhan said.

Whether that happens – and happens quickly enough – is another question.

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