President Cyril Ramaphosa has welcomed the launch of South Africa’s third annual investment conference, and the potential for much-needed capital into the country’s economy.
Writing in his weekly open letter, Ramaphosa said that beyond its contribution to national GDP, investment stimulates and supports the growth of local economies, with direct material benefits for South Africans.
“It creates work opportunities and full-time jobs, providing people with an income to feed their families and pay for basic amenities. This income gives them purchasing power and enables them to access credit for buying a home or starting a business,” he said.
In previous years, more than 1,500 delegates attended the South African investment conferences. But this year, to allow for social distancing, Ramaphosa said that he expects about 175 delegates to attend in person from listed companies, emerging firms and entrepreneurs, business associations, labour and government.
An additional 1,000 online delegates from different parts of the world have registered to date, he said.
“The conference will demonstrate that South Africa remains an attractive investment destination, and will show the progress we are making to improve the business climate,” he said.
“It will build on the positive momentum in investment in the years before the onset of the Covid pandemic. Foreign direct investment flows into South Africa, for example, rose sharply from R26.8 billion in 2017 to R70.6 billion in 2018.”
Over the last 10 months, Ramaphosa said that the pandemic forced many promising investments pledged at previous conferences to be scaled back, or put on hold.
But these investments only amount to about one-tenth of the total investment commitment of R664 billion, he said.
“Most of the investments are going ahead. Of the 102 projects that were announced at the last two investment conferences, 12 are in the early stages of implementation, 19 have been launched, and 44 are currently under construction or being rolled out.”
Reasons to invest
Ramaphosa said that investor confidence has been boosted by the implementation of the structural reforms and the finalisation of industry master-plans in sectors such as clothing and textiles, sugar and the automotive industry.
“We will be showcasing our strengths as a country and how these can be leveraged to attract new investment,” he said.
“For example, South Africa has been voted the second most attractive location for business process outsourcing for the third year in a row.
“With business continuity having been disrupted by the pandemic, we are perfectly placed to capitalise on the growing need of businesses for remote contact centres.”
Ramaphosa said that other reasons that investors should look at the country include:
- South Africa is positioning itself as a hub for digital services. Following the commitment that Amazon Web Services made at last year’s investment conference, the company opened its first cloud data centre in Africa, in Cape Town, earlier this year.
- The country is already a preferred energy investment destination. Many of the projects implemented through the Renewable Energy Independent Power Producer Procurement Programme have been successful and set an example for many countries around the world.
- With the African Continental Free Trade Area (AfCFTA) commencing in January, the country was want to attract more continental investors and at the same time expand its own investments and the market for our its goods and services elsewhere on the continent. “Already, more than a quarter of South Africa’s exports are to other countries in Africa. We expect this to increase as the AfCFTA establishes a continental market of some 1.3 billion people and a combined GDP of around $2.3 trillion,” said Ramaphosa.
Ramaphosa acknowledged that South Africa is not the only country trying to attract investment as part of its economic recovery efforts in the aftermath of Covid-19. This makes our task much harder, he said.
“To achieve our goal, we have to work together as government, business, labour and all of society to ensure that the seeds of local and international investment land on fertile soil.
“Our national objective is that the investments we secure at the third South Africa Investment Conference must lead to more jobs and improved living standards, and ultimately build the highway that leads to a better, more inclusive future for all.”