South African president Cyril Ramaphosa during a media briefing at the World Economic Forum in Davos, Switzerland

Business In The News South Africa

SA turning things around after ‘decade of stagnation and paralysis’

DAVOS-KLOSTERS, SWITZERLAND, January 23  – President Cyril Ramaphosa on Wednesday, said that after almost a decade of “economic stagnation and political paralysis”, South Africa has begun to turn things around.

“We have entered a new period of hope and renewal, and over the last year we have taken decisive steps to correct the mistakes of the recent past and put the country back on the path of progress that we embarked upon in 1994,” Ramaphosa said speaking at a press conference at the World Economic Forum in Davos, Switzerland.

“We therefore come to Davos with a single message, and this year the message is that South Africa is on a path of growth and renewal.”

Ramaphosa, flanked by members of his Cabinet, said government had placed the task of inclusive growth and job creation at the centre of the national agenda.

“Around a third of working-age South Africans are unemployed, poverty is widespread and, sadly, levels of inequality are among the highest in the world,”  Ramaphosa told assembled media.

“We recognise that we cannot create work on any meaningful scale unless we grow the economy at a far greater rate – and for that we need much more investment in the productive sectors of the economy, in infrastructure and in skills development.”

Ramaphosa pointed to the success of government’s drive to raise $100 billion in new investment over the next five years and the $20 billion in investment announced at the inaugural South Africa Investment Conference in October.

“According to a recent report which I have had sight of and which was released by UNCTAD [United Nations Conference on Trade and Development] on Monday, direct foreign investment into South Africa increased by more than 440 percent between 2017 and 2018, from $1.3 billion to $7.1 billion,” he said.

“That is a huge increase for which we are grateful, but it follows in the wake of changes that we are effecting in our country and the reforms we have embarked on. We aim to sustain and further increase this growth in investment, having raised $20 billion, this year we are going to hold another investment conference where we intend to raise more and we want to hasten the pace of investments from both local investors and offshore investors.”

Ramaphosa said Team SA was dedicating efforts and resources to investment promotion and facilitation in a bid to create an environment even more conducive to investment.

“Over the last year we have undertaken measures to ensure greater policy certainty and consistency, including economic reforms in sectors that have great potential for growth.”

He cited the mining charter as evidence of policy certainty and added that despite extensive mining exploration government held the belief that the country still held huge reserves of mineral resources.

Further sectors ripe for investment and growth were the telecoms, energy, particularly renewable energy, and tourism where government was working hard to streamline processes for business and tourist visas he said.

Questioned about foreign investment growth amidst a slowdown in key regions such as Europe and China, as well as subdued growth forecasts at home, Ramaphosa remained bullish, saying: “We are determined to unlock the many opportunities that exist in our economy.”

Economic Development Minister Ebrahim Patel added that globally the environment was clearly more fragile for growth, but within that environment there were opportunities.

Projections for growth globally was for 3.5 percent but with “significant variations” across the world economy he said.

“Globally foreign direct investment is down, in fact quite sharply, if you take the global story line it is down by 19 percent, but if you take the South African story, it has been a significant increase. If you take developed countries as a whole it is down by something like 40 percent, but if you take developing countries it is up by three percent,” Patel said.

“Within this more complex environment and given that the aggregates are more fragile, we need to find opportunity. What South Africa has done is its put its focus on attracting foreign direct investment. There has been an investment gap that we are addressing now and there has been a little bit of traction that we can play on for probably the next three or four years.”

Patel added: “There is a broadly tougher environment but within that, the trick is to find the tailwinds that can power our economy.” (ANA) 

Leave a Reply

Your email address will not be published. Required fields are marked *