Rationale behind sending lions to hunt for investment makes sense
While Ramaphosa sets out to woo investors, they will not be thee solution to equitable and fair spread of wealth
This week President Cyril Ramaphosa announced that he would be sending out lions to hunt for investment across the globe.
The pack of lions is made up of four special envoys that will be criss-crossing the continent and the world’s financial capitals to secure foreign direct investment in SA.
They are former finance minister Trevor Manuel, former deputy finance minister Mcebisi Jonas, executive chair of Afropulse Group Phumzile Langeni, and chairman of Liberty Group and former Standard Bank CEO Jacko Maree.
The drive towards attracting more investment into the country is aimed at addressing the challenge of inequality, poverty and unemployment. Without investment, it is difficult to spur on economic growth. But this is not new information.
Why has Ramaphosa opted to rely on private citizens instead of his own ministers? What are the ministers in the economic cluster there for if they cannot be entrusted with this task?
Does this not amount to duplication and therefore wastage?
On the one hand, it is an acknowledgement that government departments do not have the capacity to attract investment. Historical evidence can attest to that.
On the other hand, Ramaphosa is conceding that the government suffers from a major credibility deficit.
While former president Jacob Zuma’s supporters are running all over the country crying foul over the illtreatment of their champion of radical economic transformation, the objective reality tells us that the Zuma years were not good for the economy. As Ramaphosa noted in his announcement, foreign direct investment has been in decline since 2008.
The Zuma administrations have argued that all economic woes since he took power in 2009 are owing to the global financial crisis that began to take hold in 2008.
That is only a part of the story. The stagnation of the country’s economy is largely owing to domestic issues. The political will to manage government affairs well has been largely absent.
Investors and the markets have been alive to this. Turning the ship around, therefore, calls for innovation.
His new initiative shows that Ramaphosa knows that it cannot be business as usual. Increasing investment in the country is an urgent matter. It is one that cannot wait for government departments and state entities to completely win back the confidence of the public and investors.
And so, where the government lacks credibility, Ramaphosa has calculated that it can borrow that of these envoys. That they are willing to throw their weight, reputations and names behind brand South Africa speaks volumes about the potential that resides in this country.
If investors trust and believe in these individuals, then they are likely to take a chance on South Africa. And this is what Ramaphosa is banking on. It’s not about duplication. It’s not about wastage. It’s about strategy.
Ramaphosa has set very clear parameters for these envoys, who will report to his new economic advisor Trudi Makhaya. Their task is not to manage government departments but to seek out investment. There is an implied instruction to ministers and the government departments that they should get their act together.
They must buckle down and focus on their duty and responsibility to create an environment conducive for investment.
Being a businessman, Ramaphosa should be warned about thinking that the mere securing of investment is sufficient to alleviate the country’s challenges. Investment will not miraculously turn into development and transformation.
Investors are not going to go out of their way to ensure the equitable distribution of benefits and the redistribution of wealth.
Economic growth does not equal social justice and development. Clearly, this new initiative is a beginning of fleshing out the content of the “new dawn”. But that’s what it is: the beginning.