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Thursday, 19 September, 2002, 17:55 GMT 18:55 UK
South Africa profits from neighbours
Farm in central Africa
Most of Africa is opening up to foreign investment
Changes in the way Africa does business have boosted profits at the South African Industrial Development Corporation (IDC).


We want to invest where there is reliability

Khaya Ngqula, IDC Managing Director
The IDC was set up in the 1950s to help fund capital intensive industries such as mining but in the past five years its activities have mushroomed and its assets more than doubled.

The state-run company has profited from most African governments opening up their economies to competition and foreign investment.

It has taken a leading role in profitable new projects in Mozambique, Tanzania and Zambia - although not in Zimbabwe.

Cotton is important

Managing director Khaya Ngqula told the BBC's World Business Report that the focal point of the IDC had been diversification.

It has moved away from commodities and into media, motion pictures and high-tech industries.

"Some of them are outside of South Africa because we regard them as very viable, sustainable and cost effective," he said.

He explained that they needed to be cost effective because the IDC has not had any funds from the government since 1954.

"Some of the other projects are in agriculture, like the cotton industry - Mozambique has got the right weather and the right climate for this," he said.

He emphasised that cotton was sold in US dollars, so it made sense to be involved in the industry if South Africa wanted to be a big player in the world markets.

Looking for reliability

Further north in Zambia, agricultural projects include flowers and vegetables.

The IDC is currently working in the Zambezi valley on a $2bn (1.3bn) project to mine coal.

It is also planning to build a coking plant which can be used for aluminium and steel smelters.

"It addition to that, we are hoping to use the coal to make power, and that will bring energy to those communities," Mr Ngqula said.

He added however, that Zimbabwe had been a difficult place to do business.

"One project we tried to put together was in the steel business and after two months of negotiations.... they increased the price of electricity by 100%."

"We want to invest where there is reliability," he said.

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Khaya Ngqula, Managing Director IDC
"We want to invest where there is reliability".
See also:

16 Sep 02 | Business
16 Sep 02 | Africa
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