Policy symposium on South Africa in Africa – regionalization an imperative, but also a challenge

On 6 October 2015, fifty experts from across the continent and beyond convened in Midrand, Gauteng, for a policy symposium to discuss the role of South Africa in Africa, and the opportunities and challenges for African economic integration. Organized by the South African National Treasury, National Planning Commission, Reserve Bank, and UNU-WIDER, the symposium provided participants with an opportunity to reflect on the more than two decades of experience since the fall of apartheid and to generate ideas for the future role of South Africa in Africa represented government, the private sector, and the research community, combining up-to-date knowledge with decades of experience. The symposium emphasized the opportunities posed by greater integration for both the future of South Africa and for Africa as a whole.

Why is regional integration an imperative for South Africa?

A key point of agreement was that regional resource imbalances can only be redressed by further coordination amongst Southern African Development Community (SADC) economies and across Africa. Representatives pointed out that while South Africa struggles with water and energy scarcity, its neighbours struggle from a lack of market access, financial resources, and, crucially, infrastructure. These problems are not inherent in the local resource structure, but an artificial function of local borders. Further, South Africa’s natural advantages are not likely to last forever and the country is already facing greater competition in service provision from other providers both from within and outside of Africa. Only greater regional integration and cooperation between countries can unlock the individual potential of every country involved.

Why is regional integration difficult?

Some participants stressed the role of history in shaping regional perceptions and politics to date, leading to South Africa being in a difficult position—on the one hand being expected to take a leading role in economic development, and on the other hand being viewed as a potential predatory force on the continent.

Furthermore the pursuit of multiple domestic objectives by South Africa has often implied a degree of policy incoherence with respect to African partners. Other core challenges include lacking infrastructure, poor local coordination, and the vested agricultural and industrial interests which can influence trade policy.

The tide of trade is already turning

The effect of the 2008 financial crisis in increasing the importance of intra-Africa trade in goods and services was also highlighted. For example, in 2013 South Africa’s trade with the rest of the continent surpassed its trade with the EU, and exports of services to the continent have grown dramatically from a small base.

Despite a strong consensus amongst participants on many key issues, questions and challenges remain. How can political will for integration be generated in the face of those who benefit from tariffs? How will Africa’s changing demographics affect prospects for further economic regionalization? Who will pay for the desperately needed infrastructure investment?

This policy symposium is part of a series of events held under the ​Regional growth and development in Southern Africa project.