President Cyril Ramaphosa has been on an extended investment drive.
In addition to the SA Investment Conference, which ends on Thursday, last week he participated in a virtual business and investment roundtable with representatives from three major business organisations from the US – the Business Council for International Understanding, the Corporate Council on Africa and the US Chamber of Commerce.
“It is now more important than ever for South Africa and the US to deepen our strategic partnership through a number of political and economic forums. Just as cooperation and solidarity have enabled us to respond to the Covid-19 pandemic, so too is partnership and collaboration vital to our collective recovery,” said Ramaphosa.
According to Fitch Solutions Country Risk and Industry Research, the US is South Africa’s third largest trading partner and is a leading recipient of US foreign direct investment in Africa and is the largest African investor in the US.
There are more than 600 American companies in South Africa, many of which have had a presence in our market for decades, according to the research.
Fitch also shows how a Joe Biden presidency will engage with African countries and will mean greater US engagement with sub-Saharan Africa.
The study states that Biden will address trade imbalance, trade talks with larger sub-Saharan markets and a change in the approach to the continent’s security.
“Republicans favour a nationalist approach. Key areas of focus for the Biden administration would be deepening trade links, supporting climate change mitigation programmes, promoting human rights and continuing US involvement in counterterrorism operations. Had Donald Trump won a second term, sub-Saharan Africa would remain a low foreign policy priority,” reads the report.
The US delegation included 32 companies representing sectors such as healthcare, information communication technology, consumer goods, retail, energy, defence, agro-processing, aviation, space, transportation, film and TV production, finance and consulting.
“We are working with industry stakeholders to fast-track measures to reduce the cost of doing business and lowering barriers to entry. Last month, we launched an economic reconstruction and recovery plan to restart our economy after the devastating impact of the pandemic on growth and employment,” said Ramaphosa.
“The plan identifies four priority intervention areas: a massive infrastructure build programme, significantly expanding energy generation capacity, an employment stimulus through social and public projects and accelerating industrialisation through local production,” Ramaphosa told the delegation.
He added that South Africa has developed a robust pipeline of projects with an investment value of R2.3 trillion – about $150 billion – that will transform the landscape of the country’s cities, towns and rural areas.
The investment conference
Ramaphosa is also leading the country in the hosting of the third SA Investment Conference which ends this week.
Beyond the investment conference’s contribution to national GDP, investment also stimulates and supports the growth of local economies with direct material benefits for the country’s citizens.
The president said it was crucial to understand how investment creates work opportunities and full-time jobs, providing people with the opportunity to earn an income, feed their families and pay for basic amenities.
“In 2018 and last year alone, more than R650 billion in investment commitments were made at the conferences. This income gives them purchasing power and enables them to access credit for buying a home or starting a business,” Ramaphosa said.
He added that these investments, together with infrastructure development and other employment stimulus measures, are key to boosting the country’s productivity.
The conference will demonstrate that South Africa remains an attractive investment destination and will show the progress the country is making to improve its business climate, he said.
“Over the past 10 months, the Covid-19 coronavirus pandemic forced many promising investments pledged at previous conferences to be scaled back or put on hold. But these investments only amount to about a tenth of the total investment commitment of R664 billion.
“The investment conference will build on the positive momentum in investment in the years before the onset of the Covid-19 pandemic,” said Ramaphosa, adding that he would like to see foreign direct investment flows into South Africa rise sharply in the same way they did from R26.8 billion in 2017 to R70.6 billion in 2018.