President Cyril Ramaphosa says the South African government will this week demonstrate that the country remains an attractive investment destination.
Writing in the latest edition of his weekly newsletter, the President said government will show the progress it is making to improve the business climate.
“It will build on the positive momentum in investment in the years before the onset of the COVID-19 pandemic. Foreign direct investment flows into South Africa, for example, rose sharply from R26.8 billion in 2017 to R70.6 billion in 2018,” President Ramaphosa said.
The progress, the President said, will be outlined when the country hosts the third instalment of the South Africa Investment Conference in which the President has set an ambitious task of securing R1.2 trillion in additional investments over five years.
The conference will be held from 17 – 18 November 2020.
Over the last 10 months, the pandemic has forced many promising investments pledged at previous conferences to be scaled back or put on hold. However, the President said these investments only amount to about one-tenth of the total investment commitment of R664 billion. Most of the investments, he added, are going ahead.
Of the 102 projects that were announced at the last two investment conferences, 12 are in the early stages of implementation, 19 have been launched, and 44 are currently under construction or being rolled out.
“Beyond its contribution to national GDP, investment stimulates and supports the growth of local economies, with direct material benefits for our people. It creates work opportunities and full-time jobs, providing people with an income to feed their families and pay for basic amenities.
“This income gives them purchasing power and enables them to access credit for buying a home or starting a business,” wrote the President.
The income they spend on goods and services supports local businesses, including small enterprises. As opportunities are spread and economies grow at a local level, overall economic activity is stimulated, creating a ‘trickle-up’ effect, President Ramaphosa said.
Due to the COVID-19 pandemic, this year’s investment conference will be limited to 175 delegates, who will attend in person from listed companies, emerging firms and entrepreneurs, business associations, labour and government. An additional 1 000 online delegates from different parts of the world have registered to date.
Unlocking growth opportunities
The President said this year’s conference is about implementation and turning commitments into brick and mortar projects in cities and towns.
“It will highlight our progress in driving the economic reforms that are needed to unlock investment and growth.
“Investor confidence has been boosted by, among other things, the establishment of the Infrastructure Fund. Confidence is also being improved by our continuing implementation of structural reforms and the finalisation of industry masterplans in sectors such as clothing and textiles, sugar and the automotive industry.”
He said the country will showcase its strengths and how these can be leveraged to attract new investment. For example, said the President, South Africa has been voted the second most attractive location for business process outsourcing for the third year in a row.
“With business continuity having been disrupted by the pandemic, we are perfectly placed to capitalise on the growing need of businesses for remote contact centres. We are positioning ourselves as a hub for digital services.
“Following the commitment that Amazon Web Services made at last year’s investment conference, the company opened its first cloud data centre in Africa, in Cape Town, earlier this year,” said President Ramaphosa.
South Africa, he said, is already a preferred energy investment destination, with many of the projects implemented through the Renewable Energy Independent Power Producer Procurement Programme having been successful, setting an example for many countries around the world.
With the African Continental Free Trade Area (AfCFTA) commencing in January, President Ramaphosa said the country wants to attract more continental investors into South Africa, while expanding the country’s own investments and the market for SA goods and services elsewhere on the continent.
“Already, more than a quarter of South Africa’s exports are sent to other countries in Africa. We expect this to increase as the AfCFTA establishes a continental market of some 1.3 billion people and a combined GDP of around $2.3 trillion.
“We are not the only country trying to attract investment as part of its economic recovery efforts in the aftermath of COVID-19. This makes our task much harder,” he said.
To achieve this goal, government will have to work together with business, labour and all of society to ensure that the seeds of local and international investment land on fertile soil.
“Our national objective is that the investments we secure at the third South Africa Investment Conference must lead to more jobs and improved living standards, and ultimately build the highway that leads to a better, more inclusive future for all,” the President said.