Live broadcast of the Bloomberg Global Business Forum
New York City on 26 September 2018.
Opening remarks by President Cyril Ramaphosa at the Invest in South Africa Private Roundtable, New York
Our host, Mr Michael Bloomberg,
Bloomberg Television editor, Mr Erik Schatzker,
Ladies and Gentleman,
I wish to express my sincere gratitude to Michael Bloomberg for hosting this discussion with such an important group of people, and to appreciate his great interest in South Africa’s development as a valued investment destination.
As the country emerges from nearly a decade of low growth, declining investment and faltering employment, we are determined to forge a new growth path.
Earlier this year, I announced an ambitious investment drive that aims to generate at least $100 billion in new investment over the next five years.
As part of this drive, we will be hosting an Investment Conference in Johannesburg on 26 October, which will bring together investors from within South Africa and internationally.
We have appointed four Presidential Investment Envoys, who have been travelling to major financial centres around the world, to promote investment in South Africa ahead of the conference.
We are also working to improve the investment environment by, among other things, ensuring policy certainty and consistency, improving the performance of state owned enterprises and consolidating fiscal debt.
As we put in place the pillars of sustained growth into the future, we are also working to address immediate concerns, specifically the effects of two quarters of negative growth.
In response to recent news that South Africa is in a technical recession, government last week announced an economic stimulus and recovery plan that aims to restore growth, save existing jobs and create new ones.
The stimulus and recovery plan has five broad parts:
Firstly, implementation of growth enhancing economic reforms.
Secondly, reprioritisation of public spending to support job creation.
Thirdly, the establishment of an Infrastructure Fund.
Fourthly, addressing urgent and pressing matters in education and health.
Fifthly, investing in municipal social infrastructure improvement.
We are taking immediate steps to finalise reforms in key sectors like mining, oil and gas, tourism and telecommunications – all of which are sectors that have great potential for growth, but which have been constrained by policy uncertainty.
We are reprioritising our budget – within the existing fiscal framework – to invest more in those activities that are most likely to boost growth, including agriculture, township and rural businesses, and infrastructure.
We see infrastructure investment as a critical enabler of growth and job creation, and are therefore consolidating government infrastructure resources into a single Infrastructure Fund.
We intend to use that Fund to leverage investments from development finance institutions, multilateral development banks, asset managers and commercial banks.
A dedicated team located in the Presidency will oversee the implementation of an extensive infrastructure programme covering areas like water, transport, energy, telecommunications and social infrastructure.
Resources are being made available to provide basic needs and hire essential personnel in the public health and education systems.
Despite the challenges of the present, the South African economy has several fundamental strengths that makes it a suitable destination for investment.
South Africa has established a diversified manufacturing base that has shown its resilience and potential to compete in the global economy.
Companies like Ford, Microsoft, GE and IBM, among others, have established operations in South Africa.
Multinationals with a presence in South Africa cite numerous advantages, from excellent financial systems to world-class infrastructure.
South Africa is a regional manufacturing and services hub on the African continent, and, for many companies, serves as a base to export products globally.
Recent investments by companies such as Ab Inbev, Caterpillar and Marriot Hotels are testament to the diversity of opportunities.
We have done much work in recent years to improve investment incentives, establishing, for example, several special economic zones across the country, each having unique offerings for investors.
These include ready infrastructure for business development, reduced costs for key inputs such as land, water and electricity, and reduced corporate tax rates.
We are determined that our economic policy must facilitate inclusive growth.
Given our country’s history of dispossession, and the continued economic exclusion of millions of our people, we have a responsibility to bring all our people into the economic mainstream.
We are therefore building a robust and effective education and skills development system that equips our youth for the workplace of the present and the workplace of tomorrow.
We have implemented policies to promote black economic empowerment, to provide black people, women and people with disability with the assets and opportunities they need to participate more meaningfully in economic activity.
One of the key instruments for black economic empowerment are Codes of Good Practice, which assess companies in terms of levels of black ownership and the promotion of previously disadvantaged groups through enterprise, supplier and skills development.
This is sometimes seen as a barrier by multinationals that have global practices preventing them from complying with the black ownership element of the codes.
In such instances, the codes provide for an Equity Equivalent Investment Programme, which enables international companies to contribute to transformation through enterprise and supplier development, critical skills development and research and development.
Currently some of the approved multinational companies that successfully participate in this programme are Caterpillar, IBM, Dell, Microsoft and Hewlett Packard.
Another area that is critical to economic transformation is land reform, which is currently a focus of intense debate across South African society.
There is general agreement among most South Africans that we need to accelerate land reform not only to redress a historical injustice, but also to effectively unlock the economic potential of the country’s land.
We are committed, as government to pursue a comprehensive approach to land and agrarian reform that ensures transformation, development and stability, while providing certainty to those who own land, to those who need land and to those who are considering investing in the economy.
South Africa’s strategic position at the tip of Africa, makes it a key investment location, both for opportunities that lie within its borders and as a gateway to the rest of the region.
Earlier this year, African heads of state agreed to the establishment of an African Continental Free Trade Area that will provide access to a market of more than 1.2 billion people and a combined GDP of more than US$3.4 trillion.
This will fundamentally transform the economies of many African countries and will further enhance the attractiveness of South Africa – with its diverse manufacturing base, advanced infrastructure and sophisticated financial sector – as a compelling investment destination.
It is for all these reasons that we invite you to invest in South Africa – or invest more in South Africa – and we look forward to hosting you at our Investment Conference in Johannesburg on 26 October.
I thank you.
~ The Presidency – 26 September 2018