A big win for Ramaphosa and South Africa

Business Leadership South Africa CEO Busiswe Mavuso says that Team SA impressed delegates at the World Economic Forum (WEF), with international investors changing their outlook for the country.

Mavuso said that sentiment shifted dramatically from a year prior when South Africa was battling load shedding, and fears were high over the 2024 National Election.

She added that there was real interest in hearing what South Africa had to say at the event, which is attended by the leaders of the world’s largest countries and companies.

“We could talk directly about what we have achieved and how we can do more, whereas a year ago our message was about potential,” said Mavuso.

“We talked boldly about an ambition to deliver 3% growth this year, and people were listening and taking note.”

However, it was simply Team SA with the message, with global fund managers and banks also highlighting South Africa’s potential as one of the countries to watch.

President Cyril Rampahosa also delivered a notable speech, which highlighted South Africa’s commitment to sustainable development and inclusive growth.

He also noted the reforms that South Africa is introducing to improve the business environment and attract investors, such as policy certainty and fiscal development.

He emphasised investment in infrastructure and how public-private partnerships are looking for investors to back projects.

Finance Minister Enoch Godongwana also emphasised the ongoing growth-enhancing reforms, which could lead to ratings upgrades.

“The world is recognising the progress we’re making in implementing economic reforms, solving the electricity crisis, dealing with corruption and getting logistics right,” said Mavuso.

Time to host

Mavuso added that South Africa’s hosting of the G20 and B20 this year will give added prominence to the nation’s role in Switzerland.

She added that South Africa now has a clear vision of what the success of hosting the G20 will look like.

Firstly, the country should aim to shift global views on the riskiness

First, we should aim to shift global views on the riskiness of emerging economies and ensure debt sustainability while ensuring investment flows to drive development.

Second, South Africa needs to highlight climate adaptation and the investment needed to ensure the Global South is resilient.

Thirdly, South Africa should demonstrate the benefits of close cooperation between business and government, and how they can find solutions.

“We have established a brilliant template for how the public and private sectors can work together, which can be useful to the world,” said Mavuso.

Finally, South Africa must ensure that the world knows of the nation’s desire to achieve 3% economic growth this year.

Despite Mavuso’s optimism, economists are not as convinced as business and government leaders when it comes to the 3% figure.

The Bureau for Economic Research, which provided the 3% figure, said that the country is more likely to hit 2.2% growth in 2025 as per its baseline projection, which is still relatively optimistic.

The BER said that four issues need to be tackled for the nation to hit its 3% target:

• Electricity shortages;
• Logistics challenges;
• Water constraints; and
• Governance failures.