Historically, Sri Lanka, as well as South Africa, has developed their social, political, and economic relations with the West and other advanced countries. Interactions among developing countries and developing regions were very limited. Till the recent past, Sri Lanka, in her foreign policy, very little attention had been paid to the African Region and South Africa. However, Sri Lanka's foreign policy has now recognized the importance of establishing strategic linkages with African Nations. It also highlights the need to develop trade links between Sri Lankan and African businesses and encourage Sri Lankan entrepreneurs to venture into African markets.

African Region is the currently emerging large economic block and the fastest-growing continent in terms of population and world demand for investment, technology, and goods and services. South Africa and East African Region are bordering the west coast of the Indian Ocean. Colombo and Hambantota international seaports in Sri Lanka are located in the middle of the navigation route to Asia and the Far East from Europe and the South and East African Region. Maritime sailing time between Colombo and Cape Town (the longest destination from Colombo to African Continent) is less than 2 weeks. Durban port in South Africa serves as the gateway for several countries in the Southern African Region. Colombo Logistic Hub will serve as the main transit point between fast-growing Asia and the Far East, emerging Africa, and the developed West. Therefore, strengthening maritime linkages of Durban port with Colombo logistic hub and Hambantota ports could foster the trade of the African continent with India, Bangladesh, China, Japan, and other Far East countries.  However, as there are no direct flights from Colombo, it takes about 24 hours to reach Johannesburg (commercial capital of South Africa) by air. If direct flights are available, it may take less than 7 hours. This remains a major constraint in promoting business linkages between two countries and people-to-people interaction. If there are direct flights between Colombo and Johannesburg, it will provide easy access from South Africa to most parts of India, China, and several other countries in the Far East.

Yet, the African region is emerging as a cohesive group of nations to achieve their common social, economic, and geopolitical goals through regional groupings as well as inter and intra- regional organizations. Combined with very rich natural resource endowment and inter and intra- regional grouping for national interest, Africa is now being developed as an important and powerful economic and trade block.

 Considering these potentials, all advanced countries, and newly emerging large economies are competitively establishing their economic and political linkages with South Africa and other African countries. However, there is a big vacuum (formal education, health, technology, knowledge, skills, capital, infrastructure, etc.), in the socio-economic needs of this large market. Some of these vacuums may not be filled by currently operating advanced and newly emerging economies soon.  As such, there are a considerable amount of market niches and vacuums in socio-economic needs which could be filled by small economies like Sri Lanka. Compared to many African countries, Sri Lankans are equipped with the knowledge, experience, technical and general skills, technology, professions of health, education, engineering, accounting, business management, and multiple levels of entrepreneurial skills. Sri Lanka High Commission in South Africa intent to launch an ambitious program to build up the awareness among Southern African Nations and Sri Lanka on economic potentials and thereby strengthen the strategic economic and commercial linkages.

 However, in this endeavour, we must understand the fact that most of these nations are faced with the problem of poverty, hunger, unemployment, paucity of foreign exchange, inadequate health and education facilities, etc. These countries are also attempting to increase their export income. Therefore, any attempts by Sri Lanka to export final products and consumer goods to South Africa may not produce many results. Already, emerging large economies are exporting such products at very competitive prices to South Africa and the region. Same time the valuable raw materials are being exported to East Asia, Europe, and North America for their consumption or further value additions while importing value-added products back to Africa paying a premium price.     

However, business linkages between Sri Lanka and South Africa should not be an attempt to exploit the weakness and resources possessed by each other. We must develop a strategy to create a win-win situation by combining, complementing, and supplementing the resource endowments of both sides enabling us to achieve sustainable business linkages, instead of a fortune of a quick and abnormal profit.

For instance, certain products may be semi-processed in Sri Lanka and send to South Africa to give the final touch by a local entrepreneur or establish such facility in South Africa by the same or another Sri Lankan investor.  Also, Sri Lankan investors or African investors/joint ventures can semi-process raw material and import to Sri Lanka for final touches and re-export. Such arrangements will help to create employment opportunities and do the vale addition for both economies.

Based on the above concepts, and potentials Sri Lanka High Commission in Pretoria had several rounds of virtual meetings with the Honorary Consuls of accredited countries to the mission and several businessmen of Sri Lankan origin, who are currently residing in Southern Africa. Also, High Commission had virtual meetings with the Progressive Business Forum of the African National Congress, Johannesburg Chamber of Commerce, Black Business Council and Trade & Investment Agency of KwaZulu Natal Province, MINRA Chamber of Commerce, etc.

The Progressive Business Forum has shown keen interest in the above strategies and potentials. Sri Lanka High Commissioner to South Africa along with the mission staff met Hon. Sipho Mbele, the convener of the above forum recently at his residence. This forum works closely with the central and provincial governments, multi-national and local publicly owned companies and maintain a strong relationship to translate the government policy of business development into a reality. At this meeting, it was agreed to work out a program to strengthen linkages between different business forums and chambers in Sri Lanka and African National Congress Progressive Business Forum. Both parties agreed to discuss further the possibility of organizing a South Africa Sri Lanka Business Forum in participation with leading exporters, investors, and trade partners.

S Amarasekara

Sri Lanka High Commissioner to South Africa

16th August 2021


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