This week marks 25 years since South Africa signed an agreement with the Commonwealth Development Corporation (CDC).
The deal was sealed on 11 July 1994 – a little more than a month after South Africa rejoined the Commonwealth of Nations.
Pretoria had withdrawn its membership from the group after becoming a Republic. It was also amid backlash from some Commonwealth countries over the country’s discriminatory policies.
Owned by the UK’s Department of International Development, the development financial institution was partially privatised in 2004 and renamed the CDC Group PLC.
It is the UK’s version of the Industrial Development Corporation of South Africa (IDC), but operates on a global scale. The CDC helps companies grow in challenging business environments with the aim of creating jobs.
South Africa is among the top 10 countries the CDC has financial interests in. The financier injects money in health, manufacturing, construction and education sectors, among others.
The Executive Director for economic research non-profit organisation, Trade and Industrial Policy Strategies Saul Levin says the 1994 agreement with the global development fund marked the welcoming of South Africa back into the Commonwealth fold.
The former chief director in the Economic Development Department says it also granted South African firms access to global markets.
The CDC has invested almost R4.5 billion in the country over the past 25 years – helping create more than 60 000 jobs.
Levin says after the UK has left the European Union (EU), it could use mechanisms like the institutional vendor to improve its relationship with developing countries.
The economic researcher is urging small and medium enterprises not to rest on their laurels and approach the CDC for funding to grow their businesses.
During her three-day tour of sub-Saharan Africa in August 2018, British Prime Minister Theresa May announced the country’s 2022 intention of becoming Africa’s top investor.
Speaking in Cape Town, May announced an additional £4bn programme of UK investment in African economies that will pave the way for at least another £4bn of private sector financing.
“This includes for the first time an ambition for the UK government development finance institution CDC to invest £3.5bn in African nations over the next four years.”
President Cyril Ramaphosa has welcomed this, expressing hope for Pretoria to get the chunk of the financial boost.
SA, UK ties
The UK is a historical and strategic trade and investment partner for South Africa. While the history between the two countries has not always been rosy – Britain remains one of South Africa’s key trading partner. Their trading history dates back to the late 1950s.
In 2017, 46% of South Africa’s global investment came from Britain.
During a state visit to the UK in 2010, then President Jacob Zuma said the strength of the relationship between the two countries is best captured in London’s Parliament Square, where the statues of anti-apartheid activist Nelson Mandela and Jan Smuts stand among those of British Prime Ministers.
London also became a home for some of the country’s anti-apartheid activists, including former President Thabo Mbeki, Ruth Slovo and Mac Maharaj, who set up home there and mobilised grass roots support against the brutal apartheid regime.