Mthuli exhorts SADC countries to attract FDI

CLOUDINE MATOLA

 

Professor Mthuli Ncube, the Minister of Finance, Economic Development, and Investment Promotion, has stated that SADC countries should focus on attracting foreign direct investment (FDI) and intra-SADC investment in order to promote macroeconomic convergence, financial market integration, and the expansion of their capacity to participate in continental and global value chains, all of which will facilitate industrialization.

 

Speaking at the ongoing SADC investment forum in the capital Harare on Monday, Professor Ncube stated that the action would ensure that that the region exports processed high-value commodities and services rather than unprocessed natural resources or primary products.

 

“In this regard, attracting FDI and intra SADC investment will enhance the productive capacities of the region, promote macroeconomic convergence, integration of financial markets, as well as build capacity to participate in continental and global value chains. This will ensure the region transitions from exports of unprocessed natural resources primary products to processed high value goods and services,” Professor Ncube said.

 

He went on to say that the region’s industrialisation is being impacted by both lack of affordable long-term financing as well as long term decline in Official Development Assistance (ODA) flows.

 

“The major challenges facing the region to industrialise include, the lack of affordable long-term financing, macroeconomic imbalances and limited fiscal space to address gaps in economic enablers, coupled with a long-term decline in Official Development Assistance (ODA) flows,” Ncube said.

 

He added:” Furthermore, the majority of SADC countries are still dependant on primary industries and rely heavily on South Africa as the major trading partner, which is among the Emerging Market and Developing Economies. Hence, excluding South Africa, the majority of SADC countries are yet to be significantly industrialised.”

 

Additionally, Ncube stated that public debt is affecting the SADC region and developing nations, restricting their ability to invest in infrastructure and industry.

 

“I am cognisant of the difficulties developing countries, and the SADC region in particular, are currently facing regarding mounting public debt that is limiting their ability to invest in core industries and infrastructure,” he said.

 

According to Professor Ncube, the majority of SADC member countries have significantly weakened balance sheets, and the average public debt in the region is approximately 59.2% of GDP, with some countries at high risk of debt distress, spending more on servicing external public debt than investing in transformative programmes and projects.

 

 

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