President Cyril Ramaphosa says South Africa needs an urgent reform of its investment promotion strategies if it is to position itself as a global investment destination and reach its R1.2 trillion funding target. But with an unstable economy and ailing state owned enterprises Ramaphosa has admitted it might be a while before the country sees results that are tangible enough to address slow economic growth and rising unemployment.
He was speaking at the World Economic Forum on Africa (WEFA) on Wednesday, which takes place against the backdrop of violent Xenophobic attacks in Gauteng and threats by African leaders to skip the event. Yesterday Stats SA announced an unexpected 3.1% growth of South Africa’s economy in the second quarter of 2019 driven mainly by the mining sector. Ramaphosa said although the growth gave a semblance of hope, it was not enough to begin to address South Africa’s challenges. “The reality is that our economy is barely growing to address the challenges our country is currently facing. And while the economy is creating new jobs, they are not nearly enough to bring down the overall rate of unemployment,” he said.
“We recognise the urgency with which we need to reform our investment promotion architecture to remove policy, regulatory and other impediments,” he added. Held under the theme “Shaping Inclusive Growth and Shared Futures in the Fourth Industrial Revolution,” the forum has already been marred with negativity due to violent looting of foreign owned shops in parts of Gauteng. The violence has drawn condemnation from the African Union and seen tense relations between South Africa and other African states.
The International Relations department confirmed that Rwandan president Paul Kagame would not be attending WEFA as a result of the xenophobic violence. Reports suggest leaders of other African states including the Democratic Republic of Congo (DRC) and Malawi have also with drawn their participation as a result of the attacks. Ramaphosa has urged South Africans not to blame foreign nationals for the country’s high unemployment rate. He cautioned that the country’s efforts to be part of free trade talks in Africa would be compromised if its citizens continued to outcast fellow African nationals.
Now as he attempts to position South Africa as a viable investment destination in spite of its economic challenges, Ramaphosa will also have the task of alleviating concerns among his foreign counterparts on the state of his country’s social unrest.