Ramaphosa’s economic adviser Trudi Makhaya on R1trn investment drive

Trudi Makhaya (Picture supplied).
Trudi Makhaya (Picture supplied).

Pretoria - Trudi Makhaya, President Cyril Ramaphosa’s economic adviser, is only a few weeks into her new job. Her office in the West Wing of the Union Buildings is still bare of personal items and just a few books fill the bookshelves.

Makhaya, an economist, consultant and former deputy commissioner at the Competition Commission, has had a busy few weeks of initiation into the presidency.

In a wide-ranging interview with Fin24 on Tuesday she said the first few weeks in office required her to understand the structure of the presidency “and how it all comes together".

Makhaya, who is coordinating the work of four investment envoys tasked with raising more than R1tn in investments over the next five years, counts attending the recent G7 summit in Canada as one of her highlights.

“It kind of underlined that major economies [are] still enthusiastic about SA, we just need to get our act together and present a compelling investment case."

It was the first time in seven years that SA was invited to attend the outreach summit alongside the world’s most developed nations.

“We really capitalised on it, on the way to Quebec where the summit was being held, we stopped over in Toronto and had a session with business people … across a range of sectors, mining particularly but also financial services, pharmaceuticals, manufacturing.”

Makhaya said Canadian business leaders asked questions about policy certainty, land reform and were positive about South Africa’s potential.

At the G7 summit itself, Ramaphosa held bi-lateral meetings with a few of the bloc’s leaders and other heads of state.

Ramaphosa and Trudeau

According to Makhaya, meetings with German Chancellor Angela Merkel, French President Emmanuel Macron and the host Canadian Prime Minister Justin Trudeau showed their support for SA’s investment drive.

The discussion with Trudeau was particularly encouraging. “He was very enthusiastic about SA, very knowledgeable about SA … quite a fan of Trevor Noah … he commended the all-female delegation that met with him, except for the president”.

Canada is an important market which has at times been overshadowed because of its powerful neighbour to the south. Makhaya said it has many lessons for SA in mining, as it has been able to develop its exploration and financing of the commodities sector.

Domestic investment critical

While wooing overseas investors, Makhaya believes domestic investment levels are integral to kick-start the economy.

“We do see local investment [as] being a very important part of that, almost a foundation of it because the local business sector, established businesses that are already in the market that are by some estimates sitting on R1tn of cash and have not found it attractive to invest in more productive activities,” she said.

 “I think it would be unfair to say they haven’t been investing at all, they have, but more on maintenance kind of investment. Just keeping up current production, not so much into new areas and new productive capacity.”

SA is aiming to attract increased investment from the rest of the continent said Makhaya. Ramaphosa and Kenyan President Uhuru Kenyatta agreed in Quebec over the weekend to hold an investment conference in Nairobi, later in 2018.

WATCH: Major economies are still enthusiastic about SA

Give investors policy certainty

Makhaya said that short-term measures to boost policy certainty include the resolution of visa issues affecting the tourism industry, and the publication of the revised Mining Charter which is close to being finalised.

Improving the ease of doing business by allowing companies to register online, and strengthening the hand of competition authorities - an area of particular interest for Makhaya as a former deputy commissioner at the Competition Commission - are other longer term issues to boost investment.

The 2.2% GDP contraction in the first quarter of 2018 should be seen in context, given the higher than expected growth rate of 3.1% in the last three months of 2017.

She doesn’t expect any further shocks for the country's GDP in 2018, and expects the figures to improve in the second half of the year when government has a jobs and investment summit planned.

Treasury is anticipating a 1.5% rate of economic growth for 2018.

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