South African President Cyril Ramaphosa may be having a bad week on the political front, but his efforts to attract investment and create jobs got a vote of confidence from US giants PepsiCo and Ford.
PepsiCo agreed on Friday to buy South Africa’s Pioneer Foods Group for about R24.4 billion ($1.8 billion) after a previous partnership between the two companies ended four years ago.
Earlier in the week, Ford said it will increase its South African workforce by more than 25% following the introduction of a third daily weekday shift, allowing it to ramp up production.
The votes of confidence come as the nation’s anti-graft ombudsman ruled on Friday that Ramaphosa’s treatment of a campaign donation violated the constitution and executive ethics code.
That added to mounting challenges facing the president as he battles to exert control over his ruling African National Congress and push through policy reforms.
Gross domestic product contracted the most in a decade in the first quarter while business confidence is hovering near a three-decade low.
That represents a comedown following an initial boost after Ramaphosa took control of the ANC in December 2017 and succeeded Jacob Zuma as president two months later.
As part of his efforts to revive Africa’s most-industrialised economy, Ramaphosa hosted an investment summit in October to boost his target of attracting $100 billion of inflows into the country over five years.
The PepsiCo investment is a “good first step to strengthen the president in the direction he wants to move in, even as some people within his own party don’t really accept his policies,” said Richard Downing, an economist for the South African Chamber of Commerce and Industry.
“It shows he has credibility with these efforts, in South Africa and abroad.”