Investors love South Africa: Ramaphosa

 ·6 May 2024

President Cyril Ramaphosa is pushing back against the narrative that South Africa is in trouble with investors, saying that the country has become an increasingly attractive investment destination that has drawn R1.5 trillion worth of commitments from big businesses.

In his weekly letter to the public, the president highlighted big-brand auto manufacturers like BMW, Volkswagen, Mercedes-Benz, General Motors, Ford, Toyota, Nissan and others expanding their presence in the country with increased investment.

He also pointed to South Africa’s manufacturing sector becoming the largest destination of foreign investment in the country – with investment also flowing into mining and quarrying and financial services.

“South Africa is a stable democracy with robust institutions. We have good relations with countries on our own continent and across the world, and favourable trade relations with a number of large markets. Our tertiary institutions produce skilled graduates and useful research,” he said.

Ramaphosa pointed to annual investment conferences held in South Africa over the current term, which he said attracted R1.5 trillion in investment commitments across a broad range of economic sectors.

“Over one-third of these pledges have translated into job-creating businesses and business expansions in renewable energy, mining, packaging, automotive, retail, manufacturing, transportation, and other sectors,” he said.

Reality check

While the president touted positive investment in South Africa, he did concede that foreign direct investment (FDI) as a percentage of GDP was not at the levels it should be.

In 2023, FDI inflows amounted to R96.5 billion, equivalent to 1.4% of GDP.

While this supports a trend where foreign direct investment has, on average, been far greater over the last five years than over the previous decade, the president said it still falls short of the global average.

“It needs to be much higher if we are to drive sustainable growth,” he said.

Ramaphosa said that electricity has been a massive stumbling block, but recent improvements in generation and other plans that have been put in place should yield positive results.

There are also more avenues open to the government to boost investment: such as the auction of broadband spectrum and progress in digital migration offering opportunities in technology, and the cutting of red tape in government to get businesses set up faster.

“We have invested a lot of effort into improving our capacity to plan, package and finance major infrastructure projects, creating new investment opportunities in energy, housing, logistics, manufacturing and other areas,” he said.

“We will continue to build on the gains that we have made towards creating an enabling business and investment climate that promotes economic growth and creates jobs.”

Read: International bank calls it quits in South Africa

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