South Africa's economy remains resilient
1 September 2016
South Africa remains an attractive investment destination through its highly developed first-world economic infrastructure and a robust emerging market economy. Government has made bold decisions to restore confidence in the economy and is committed to achieving its fiscal objective of stabilising and reducing debt. Significant efforts have been made to encourage private sector participation and government is working with the private sector to identify co-investment opportunities. Government’s announcement of a One-Stop Shop (Invest SA) for investment in South Africa is one such partnership to make it easier to do business in the country.
South Africa’s attractiveness as an investment destination was confirmed with President Jacob Zuma signing bi-lateral agreements with the President of China with the purpose of further strengthening friendly cooperation between China and African States, jointly meeting the challenges of economic globalization and seeking common development. One of the results of this agreement is the historic R11-bn investment from Beijing Automobile International Corporation (BAIC) in an automobile manufacturing plant in the Coega Industrial Development Zone.
In yet another affirmation of business confidence in the country, South Africa and Japan signed a memorandum of understanding this week, which seeks to promote and facilitate the increase of investments from Japan into South Africa. Japan is a long-standing investor in the country. As part of the memorandum, InvestSA and the Japan External Trade Organisation promote and cooperate in the exchange of business delegations, seminars, investment opportunities and matchmaking events between South Africa and Japan.
The assuring message from Germany’s Deutsche Bundesbank executive board member Andreas Dombret confirms South Africa is an attractive investment destination, particularly for long-term investors. Dombret reinforces investors’ confidence in the country’s infrastructure, the legal system and the credibility of authority in the country.
Government remains committed to delivering quality infrastructure and related services in line with its commitment to ensuring a better life for all. The National Development Plan clearly outlines that it is only through effective partnerships that will enable the advancement of an inclusive economy which addresses the triple challenge of unemployment, poverty and inequality.
Acting Director-General, Donald Liphoko, said; “Government’s partnership with the private sector remains resilient and this partnership has yielded positive results. Government is confident that our sound economic and fiscal policies as well as the inherent strength of the economy bear testimony to the results already achieved. We are positive that public entities have in place governance structures, mechanisms and processes to weather any storm. SOEs are geared for economic growth and have a fundamental role to play in achieving the State’s developmental objectives.”
In as far as South Africa’s ability to attract investment goes, it bodes well for our country that despite a global trend which indicates declining FDI levels, we have been able to attract over R140 billion in the 2013/14 financial year. This is almost double the amount of FDI in 2012. South Africa was also the recipient of US$3.31 billion in FDI from January 2015 to July 2015 which also saw the creation of 5 037 jobs.
Government reassures investors that South Africa is open for business and South Africans are encouraged to embrace private public partnership that aim to achieve the country’s economic vision, added Liphoko.
Issued by Donald Liphoko, GCIS Acting Director-General, 1 September 2016
