RAMAPHOSA GETS $13.5BN OF INVESTMENT PLEDGES AT SUMMIT
JOHANNESBURG - South African President Cyril Ramaphosa secured about 200 billion rand ($13.5 billion) of investment pledges, mainly from domestic companies, yesterday as part of his drive to boost flagging economic growth.
Ramaphosa announced the investments during his opening speech at a forum aimed at drawing sorely-needed direct investment into the economy.
“The new investments over five years are with the view of addressing low economic growth and reducing unemployment,”
Ramaphosa said. “It is pleasing to see that investors still consider South Africa as a country that has much to offer.”
At last year’s forum, Ramaphosa had set a goal of attracting $100 billion of new investments over a five-year period and he quickly secured more than half that amount in pledges.
But many of those promises are yet to translate into projects that could make a meaningful indent in the country’s 29 percent unemployment rate or lift the growth rate above last year’s level of 0.8 percent.
The scale of the challenge Ramaphosa faces was underlined by Finance Minister Tito Mboweni’s bleak medium-term budget speech last week, which slashed this year’s growth forecast to 0.5 percent and showed government debt would shoot up to more than 70 percent of gross domestic product by 2023.
Moody’s placed South Africa’s last investment-grade credit rating on a “negative outlook” after Mboweni’s updated budget projections, giving the country up to 18 months when it could be downgraded.
A downgrade could trigger billions of dollars of outflows from South African government debt.