The South African envoy participated in a press briefing at the World Economic Forum in Davos-Klosters, Switzerland.
With South Africa recently moving out of recession and recording 2.2% quarter-on-quarter growth in the third quarter of 2018, the President provided an update on the South African Economy and its drive to boost investment.
President Ramaphosa started by saying South Africa has turned around and has entered a period of ‘hope and renewal’, putting it back on the path of progress it embarked upon on 1994 when it became a democratic country.
He says inclusive growth and job creation is at the centre of their national agenda. Around a third of working-age South Africans are unemployed. This is concerning, he says.
To tackle inequality and poverty they are looking to grow their economy through investment and a vigorous process of skills development. Last year, they launched an ambitious drive to mobilize $100 billion in 5 years. They raised $20 billion in 2018 and will hold another investment conference in 2019. He says direct foreign investment rose 440% between 2017 and 2018, rising from $1.3 billion to $7.1 billion. He aims to sustain this growth and investment.
South Africa is committed to addressing investors concerns and expectations, he says. They’ve introduced economic reforms to provide greater policy certainty. For example, they’ve finalized a new mining charter and are seeking to regenerate exploration in the mining industry because South Africa still has a huge minerals resource.
In telecommunications, they are looking to accelerate broadband access and promote competition. In energy, they have signed new agreements for another round of renewable energy projects and have published a new energy plan for South Africa, which is open to public consultation. In tourism, they are taking steps to make it easier for tourists, investors, and businesses to visit South Africa.
Following the recession in the first half of 2018, they introduced a stimulus plan, redirected public spending towards agriculture and the small business sector, and established an infrastructure fund to consolidate all public spending on infrastructure. They’ll mix this with private sector expertise.
Economic growth has turned around and while forecasts are subdued, they are determined to unlock the many opportunities in the economy, he says.
South Africa has also established a commission to re-establish the rule of law, especially where the private sector had ‘captured’ state institutions. It is hearing evidence and will prosecute in an effort to end corruption. They’ve also replaced boards of several state-owned corporations. In the next few weeks, they will announce a series of measures to stabilize the position of Eskom and ensure continuous energy supply to the country.
They are also tackling the issue of land reform, seeking to take the interests of all people into account. They want to redress historical injustices, but also take the opportunity for greater land and agricultural reform.
He closes his statement by saying collaboration will be at the heart of South Africa’s progress – both domestic and international growth. We go to questions.
Highlights from responses:
Asked if it we are in a tougher environment for emerging markets to attract investment, Ebrahim Patel, Minister for Economic Development responds that globally foreign direct investment is down 19% but in South Africa there has been a significant increase. Within the current complex opportunity, they are focused on finding opportunities, expanding production and trade within the African content, and boosting infrastructure investment.
Asked if they are worried about attempts to disrupt the State Capture Commission through fake news and other measures, Jeff Radebe, Minister of Energy responds that the rule of law is very important in South Africa. The country has been very aggressive in fighting crime and corruption. A new director of public prosecutions will start in February. We are also collaborating with communities and businesses as we tackle crime. The President reinforces that the government will not allow that commission to collapse – it is very important in the life of South Africa, he says. It may well be a cathartic moment for South Africa. But it is also a moment of truth. It could also be a moment of redemption, he says. ‘Our judges are very strong’.
When asked about the ownership of the reserve bank, the President says that only a few central banks in the world are government owned. The governing party has taken a resolution that the central bank should come under public ownership, which is a separate matter. Regardless, they do not seek to interfere with the independence of the central bank.
Asked how they will implement land reform and still achieve their goal of economic growth this year, the President says that the matter is currently with the parliament and they are currently considering a report. Any changes will be within the framework of the South African constitution and will seek to clarify what is already in the constitution, he says. The government envisages private ownership, public ownership, ownership by trust, and communal ownership. They will seek to provide security of tenure – not just for a few South Africans, but for all South Africans.