President Cyril Ramaphosa says South Africa is steadily working to create a competitive business environment that is conducive to investment, telling investors at the second South Africa Investment Conference that “there can be no better time to invest in this dynamic, growing economy than now.”
“As a government, and as a country, we are clear about what we need to do, and we are marshalling our every resource and our every capability to do it.We are on a path of removing impediments and constraints to inclusive growth,” he told potential investors from 22 countries in Sandton Wednesday.
Ramaphosa said it was “gratifying” to witness the commitments of the 2018 inaugural conference materialising in the form of new factories, production lines, services, products and jobs.
Following the inaugural investment conference, investment pledges worth nearly R300-billion were made across 31 projects and Ramaphosa reported that most of those pledges had materialised, with R75-billion having already been spent since the 2018 event.
The President made specific reference to the liberalisation of the country’s tourist and business visa systems, which had been held up as a major constraint to tourism growth, as well as to ensuring that foreign companies could bring in international managers and executives.
The business-registration process, which currently takes more than a month, was being overhauled, with Ramaphosa promising to reduce the process to hours rather than the day outlined in a pilot project being pursued by the Department of Trade, Industry and Competition.
In addition, securing of water-use licenses should take three months in future rather than three years.
Progress was also being made in setting up an Investment Fund, that would seek to draw in both public and private finance to help close ongoing economic and social infrastructure backlogs.
Ramaphosa said the fund would seek to draw on the success of the Renewable Energy Independent Power Producer Procurement Programme, which had facilitated hundreds of billions of rands of investment into mostly wind and solar projects since 2011, in other infrastructure sectors.
Energy security was also being prioritised, with investment in new generation to be guided by the recently approved Integrated Resource Plan 2019 and supported by the restructuring and modernization of State-owned utility Eskom, which had been identified as the single-biggest risk to the economy and government’s fiscal position.
Ramaphosa said a new Eskom CEO would be appointed within days and said that government was also working on a plan to extend debt relief to the company, whose debt burden had risen above R450-billion and beyond a point where Eskom could repay the debt without government support.
The process of releasing high-demand broadband spectrum had also been initiated, which was seen as critical to both creating capacity for further information communication technology industry growth as well as to lowering the cost of communications and digital services.
Ramaphosa also told investors that government was committed to restoring fiscal prudence by cutting expenditure and eliminating waste, describing macroeconomic stability as a necessary condition for attracting further investment.
He also drew a direct link between improving the investment climate and the social compacts being developed with business and labour.
“We are on a path of removing impediments and constraints to inclusive growth. We have embarked on a path that is illuminated by policy consistency and regulatory certainty, fiscal responsibility, and decisive interventions to stimulate economic activity,” Ramaphosa stated.
Ramaphosa said rapid industrialisation is critical if Africans are to reap the benefits of the African Continental Free Trade Area which entered its implementation phase in July 2019.
“This is a historic development that promises to fundamentally reshape African economies.”
He added that the treaty will unleash the manufacturing and industrial capability of the continent as companies seek to make products for the burgeoning African market, and thereby “address the absurd situation that African countries do not trade with each other.”
Trade among countries in Africa is currently at 15%, compared to 47% in the Americas, 61% in Asia and 67% in Europe.
As one of our Ministers often observed, the president said: “We consume what we do not make and we make what we do not consume.”
The target for this year’s gathering has been set at R1.3 trillion in new domestic and international investment for the next four years.