Noting that president Ramaphosa was already able to secure $20bn in investment from the Middle East, Survé called it a silver lining on the new dawn for South Africa.
Durban – South Africa will be on a winning wicket if business leaders and government unite behind political stability and sound governance, Dr Iqbal Survé, chairperson of the BRICS Business Council said on Sunday.
Addressing hundreds of delegates attending a session on Investment Opportunities in South Africa at the Inkosi Albert Luthuli International Convention Centre, Dr Survé implored business leaders to rally behind President Ramaphosa’s aim of attracting $100bn in investment for South Africa.
Noting that president Ramaphosa was already able to secure $20bn in investment from the Middle East, he called it a silver lining on the new dawn for South Africa.
“As business leaders, we must affirm and support his inspirational leadership. South Africa’s entire history from political struggle and democratic consolidation has been about working as a collective,” Dr Survé said.
“That unity of purpose, political stability, sound governance fundamentals and reciprocal support from government to business will make South Africa an even more incredible success story. Add to that mix the enormous political, economic and financial muscle that we are able to mobilise through BRICS and it has to be a winning wicket,” he said.
Dr Survé said the BRICS Business Council meeting in Durban was one of the largest to gather in BRICS history.
He, however, cautioned that while there was much optimism, the reality was that the world economy was very uneven.
“World markets, oil supply, commodity prices and exchange rate volatility are all factors over which we have very little if any control,” he said adding that during President Ramaphosa’s February State of the Nation address had noted that investment on the South African economy had declined in recent years.
According to Ramaphosa, the total fixed investment in the economy stood at 24% of GDP in 2008, it had declined to around 19% last year.
The National Development Plan says South Africa needs to increase this to at least 30% of GDP by 2030 while foreign direct investment declined from around R76 billion in 2008 to just R17.6 billion last year, Ramaphosa said during his State of the Nation address.
“Hearing those figures at the time sounded very depressing. In the six months since that iconic speech, there has been significant positive sentiment. Government has been able to demonstrate that South Africa is able to mobilise investor confidence,” Dr Survé said.
“That confidence will need to be sustained by the long-range view as expressed in our developmental blueprint, the National Development Plan Vision 2030. We are also encouraged by President Ramaphosa’s announcement of an upcoming Investment Conference involving both domestic and international investors.
“That conference will take stock of what has been achieved thus far and plan for the next five years. Confidence will also need to be sustained by decisive political and legal action to break the back of corruption in both the public and private sectors; be responsive to or rein in wildcat protests that degenerate into mayhem and invest in skills development among other priorities,” he said.
To do this, skilling the South African workforce was crucial as well as the commitment to science, technology and innovation that will be demanded by is in the Fourth Industrial Revolution, Dr Survé noted
“An audit of our skills sets and the institutional capacity to train will also be valuable. We have discerned a willingness among our BRICS partners to support South Africa in areas where we lack capacity. Current Department of Trade and Industry training delegations of technicians in the footwear industry to China, for instance, demonstrate the generosity of these offers for mutual assistance and cooperation,” he said.
Dr Survé said that South Africans tended to be unusually critical without looking at the many positives such as political and macro-economic stability; a favourable government debt structure; deep local capital markets; world-class transport, telecommunications and energy infrastructure; a healthy banking sector and strong regulatory institution.
“South Africa also has a generous raft of investment incentives and industrial financing instruments designed to boost commercial activity. Investors who work on an assessment of fact rather than just a reading of risk have noted these opportunities. Take for instance Mercedes-Benz AG’s announcement last month that it will invest €600 million ($700 million) in a plant expansion in our Eastern Cape coastal city of East London. That is a huge statement of confidence and good reason to be bullish,” he said.