Ramaphosa’s SA is ‘impressing’ investors
Investors are more excited about SA under the leadership of President Cyril Ramaphosa than they were a year ago, according to the International Finance Corporation.
Investors are more excited about SA under the leadership of President Cyril Ramaphosa, than they were a year ago, according to the International Finance Corporation (IFC).
“There’s a huge difference between last year and this year. Investors probably wouldn’t have thought very hard about SA before and now they are — they’re very impressed,” IFC country manager Saleem Karimjee said last week.
The goal for the IFC, part of the World Bank Group and headquartered in Washington DC, is to promote development in the private sector by convincing companies to invest in markets in different stages of development. The IFC provides solutions and structures that help mitigate any perceived risks.
Ramaphosa was elected president of the ANC in December and took over as president of SA in February, after Jacob Zuma’s resignation. Business and consumer confidence soared with the news and markets rallied. Since then, confidence has slumped again and SA has fallen into a recession for the first time since the global financial crisis.
The medium-term budget policy statement also painted a bleak picture of SA’s finances, which attracted the attention of credit-ratings agencies. Moody’s said it was credit negative.
Despite this, the IFC said the president had been very clear about his stance on policy issues such as the mining charter and land reform, which had started to lower uncertainty.
“Something I hear every day is that investors hate uncertainty, but what is being said and what is being done is getting people much more comfortable.
“For a while, investors were asking themselves what the future is going to look like,” said Karimjee. “We have a five-year record in SA in terms of investment, with about $450m invested into companies in the country. We’re not scared.”
The IFC’s comments come on the coattails of an investment conference where Ramaphosa announced that SA would receive a surge in investment of more than R290bn over the next five years. This is expected to have a significant effect on his $100bn investment drive announced in April.
IFC vice-president for the Middle East and Africa Sergio Pimenta said investors were paying close attention to the long-term trends.
He said that the performance of the economy quarter to quarter was affected by the past, but that investors ought to be optimistic that the change in policies will have a meaningful effect.
“You can’t change the overall economy of a country the size of SA in a quarter.”