We showed the world a united front in Davos
South Africa was represented by a multistakeholder, high-level delegation at the World Economic Forum in Davos last week. Coming within the context of projected lowered global economic growth, and falling oil and commodity prices, this gathering of international thought leaders presented an opportunity to look at global responses to a range of pressing social, developmental and economic issues.
South Africa is not insulated from this global economic environment and, although we have the most diversified economy in Africa, and a strong macroeconomic policy and fiscal environment, the falling commodity prices, among other things, present a challenge to our economic growth forecasts.
Our most important message in Davos to international business and investors would have to be that South Africa is open for business in this environment, and that they could be assured of our commitment to policy certainty and consistency. Among other things, we communicated that:
Our strong macroeconomic framework has shielded the economy from the full brunt of a challenging global economic environment and volatility in global capital markets;
Government, through its fiscal consolidation measures, is committed to continued fiscal prudence and preservation of investment-grade credit ratings;
Private partnerships in energy through renewable programmes are fast contributing to further power availability;
Mature banking institutions and world-class capital markets make for easy access to capital;
The adoption of a socioeconomic impact assessment system by Cabinet in September 2015 seeks to avoid policy contradictions and preserve a business-friendly environment;
Efforts at the National Economic Development and Labour Council to foster a stable labour environment are yielding results, and the Commission for Conciliation, Mediation and Arbitration has been given responsibility through amendments to the Labour Act to mediate in resolving strikes; and
Comprehensive business incentive packages across sectors offer support to business.
With a strong team consisting of ministers from the economic cluster, senior representatives of South African state-owned entities and many representatives of business, Team SA took these messages with confidence to the snow-covered town in Switzerland. They were communicated in all our interactions during the four-day forum.
What we experienced was that investors and leaders of global business continue to be positive about South Africa in particular and Africa as a whole, contrary to the sentiment we have seen expressed domestically about all affairs economic.
Investors and global business leaders also appreciated South Africa’s frankness and openness in explaining some of the challenges we’re are dealing with in terms of our economic growth.
Despite these challenges, South Africa continues to attract foreign direct investment, and the ICICI Bank of India this week announced it would set up an office in South Africa, which affirms our position that we are a preferred investment destination even in these difficult global conditions.
We also took the opportunity to reiterate to delegates at Davos that the National Development Plan and the nine-point plan for economic recovery, underscored by Operation Phakisa, remain our programme of action.
This communicated an awareness on our part that we could not continue with business as usual.
The challenging and uncertain global economic conditions necessitate an innovative approach to ensuring that we remain globally competitive in the face of turbulence. A message can only go that far to build confidence. We must now pull together in our various sectors to ensure we implement these programmes.
In a highly uncertain economic climate, we have, as Team SA, once again demonstrated that uniquely South African quality of being able to stand together in the face of adversity because our country is the most important thing.
This is the spirit that will see us transcend almost unprecedented global uncertainty.
Makhubela is the CEO of Brand SA