It will take years to rebuild trust in South Africa, but the country is moving in the right direction, deputy governor of the SA Reserve Bank Kuben Naidoo said on Wednesday.
"Trust is a critical part of the economic investment process and we've had a significant breakdown in trust from partners.
"However, we've begun a slow and steady ride back up," Naidoo said at an event hosted by Wesgro, the official tourism, trade and investment promotion agency for Cape Town and the Western Cape.
"There are no quick wins and easy solutions, but despite global headwinds, risks can be turned into opportunities for Cape Town, the Western Cape and South Africa."
Naidoo said that, between 1996 and about 2010, South Africa's economic growth broadly tracked global growth.
However, there was significant "de-coupling" shown in this regard from 2011 to 2019, where the local economy slowed down to half the pace of the global rate.
While acknowledging that the international economic environment contributed to this slowdown in SA, Naidoo said the reasons were largely domestic.
Emerging market advantage
Wesgro economist Janine Botha said challenges global challenges affecting the Western Cape and South African economy included rising US protectionism, a tightening of global financial conditions and financial market instability, the impact of Brexit, the increasing risk of economic growth recessions, escalating geopolitical tensions, and climate change.
However, Botha sees opportunities to bounce back.
She added that, despite weakening global expansion, emerging markets and developing economies are expected to outperform advanced economies, with some of the fastest growing economies located on the African continent.
"With Cape Town and the Western Cape being a gateway to the rest of Africa, the province is strategically positioned to tap into the opportunities forecast for the continent, in particular sub-Saharan Africa," said Botha.
In her view, other opportunities include deepening trade, investment and tourism ties with Asia, and tapping opportunities for Western Cape goods presented by the US's Africa Growth and Opportunity Act (AGOA).
The Next Eleven
Furthermore, in her view, the UK will remain a key trade partner and important tourism source for the Western Cape, despite the pending outcome of Brexit.
She foresees opportunities starting to emerge in the so-called "Next Eleven" (N-11) group of countries comprising of South Korea, Mexico, Indonesia, Turkey, Iran, Egypt, Nigeria, the Philippines, Pakistan, Bangladesh, and Vietnam.
Wesgro has also found that the halaal market for products and services continues to attract significant and increasing attention, with halaal tourism projected to increase in importance.
Sectors Wesgro is focusing on to boost the Western Cape economy and facilitate job creation include tourism, trade, investment and film and media promotion.