Ramaphosa butters up US investors
Following a tense couple of months with the world’s largest economy, President Cyril Ramaphosa is trying to bring further US investment into South Africa.
Relations between the two countries hit boiling point after US ambassador to South Africa, Reuben Brigety, said that weapons had been loaded onto a Russian cargo ship at the Simon’s Town naval base in Cape Town in December.
This created fears that South Africa could lose preferential access to the USA through the African Growth and Opportunity Act (AGOA), causing the rand to nosedive.
However, tensions between the countries have simmered down, with a panel led by Judge Phineas Mojapelo noting that no weapons were brought onto the ship.
With the decreased animosity, President Cyril Ramaphosa spoke at the South Africa Trade and Investment Business Roundtable Dialogue in New York to bring further investment into South Africa.
“For South Africa, a divided world is not a good thing. We are a trading nation with above-average trade-to-GDP ratios. A significant part of our economic growth is driven by exports,” the President said.
He said that the country is working with the US administration to extend AGOA benefits to current beneficiary counties for an additional 10 years prior to it expires in 2025.
“The US remains a very important economic partner in trade and investment, with great potential to further expand economic ties,” the President said.
“There are a reported 600 US firms based in South Africa, and more firms will find value in being present in South Africa in the next phase of our growth.”
“According to the US Bureau of Economic Analysis, US firms in South Africa generate over $30 billion of revenue per annum.”
The President also noted that South Africa will also benefit from the imminent launch of trade under the African Continental Free Trade Area, the Economic Partnership Agreement with the EU and UK and further trade links with the Middle East through the expansion of BRICS.
Give us money
Ramaphosa also tried to allay fears over South Africa’s domestic constraints, noting that the government is working with the private sector to address the challenges at Transnet and Eskom.
He added that the nation is currently reforming the visa system, which is placing a higher priority on business visas and work permits for senior executives and scarce skills. He said that this will ensure that South Africa’s skills crisis does not impede growth.
In addition, South Africa aims to increase the number of skilled workers by providing more workplace exposure for graduates, with a particular focus on STEM skills.
He noted that the focus on skills is crucial to the government’s R2 trillion investment plan.
“We have just concluded the first 5-year phase of our investment drive, raising R1.5 trillion in commitments from firms across the economy. These range from automobiles to pharmaceuticals, mining, the digital economy, manufacturing, energy, transport logistics and many others,” he said
“We have now increased the target over the next five years to R2 trillion… Infrastructure investment is a special focus, with increased investment in energy, transport, digital infrastructure and water.”
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