Cyril to sell a story of ‘recovery’ in Davos

Forum to test investor appetite

US PRESIDENT Donald Trump’s attendance at the World Economic Forum in Davos will no doubt dominate this week’s newspaper headlines, with the world waiting for yet another embarrassing or tactless remark from the leader of the world’s biggest economy.

But for South Africa, the attendance of newly-elected ANC president Cyril Ramaphosa and Finance Minister Malusi Gigaba will perhaps be as seminal a moment as Nelson Mandela’s first address at Davos in 1992.

When he returned from the gathering that marked the reintroduction of the South African economy into the global village, Mandela put paid to the nationalisation drive that some in his party had backed.

After nearly a decade of a narrative largely shaped by economic stagnation and ever-increasing corruption, Ramaphosa and his entourage have to sell a story of “recovery”.

The 14th president of the ANC said they would send a positive message “that as much as we are downgraded we have green shoots beginning to emerge and that South Africa is ready and open for investment”.

The South African delegation of government, business and labour representatives will have to deliver a good-news narrative to the gathering of international business and political leaders in Davos that has been nearly impossible since the firing of Nhlanhla Nene as finance minister in late 2015.

The occasion will be a litmus test to gauge investor appetite and renewed confidence in South Africa now that the country has moved beyond the disabling political uncertainty which plagued it ahead of the ANC’s elective conference.

A Goldman Sachs report indicates a turn in investor sentiment this year. South Africa is at the top of the list of potential candidates for the next big emerging-markets story following the “market-friendly” outcome of the ANC conference three weeks ago.

Economic growth may surge to 3% this year and 5% over the next five years, Goldman Sachs South Africa MD Colin Coleman said after the election of the new ANC leadership.

“[Investors] will not ask so much about the problems and how you are going to fix it, they will look to the leadership that has been elected to fix it and to make it happen.”

For Gigaba this may be his last opportunity to impress Ramaphosa ahead of the 2018 national budget presentation to parliament next month as rumours swirl that former ANC treasurer-general Zweli Mkhize may be appointed as the next finance minister should Ramaphosa assume the presidency this year or after next year’s national elections. —