South Africa has to change the way it does busi­ness, Mboweni tells Davos ses­sion

Pretoria News - - BUSINESS REPORT - ADRI SENEKAL DE WET Davos, Switzer­land

FI­NANCE Min­is­ter Tito Mboweni, ac­com­pa­nied by In­ter­na­tional Re­la­tions and Co-op­er­a­tion Min­is­ter Naledi Pan­dor and Min­is­ter of Trade and In­dus­try Ebrahim Patel, ad­dressed a South African busi­ness ses­sion at the World Eco­nomic Fo­rum (WEF) in Davos, Switzer­land, yes­ter­day.

Mboweni stated clearly, to the small group of global and lo­cal busi­ness lead­ers, that South Africa had to change the way it does busi­ness.

“It clearly doesn’t work: our econ­omy is not grow­ing at the rate we des­per­ately need, and our for­eign di­rect in­vest­ments are less than what is needed to cre­ate jobs,” he said.

The econ­omy has been in the dol­drums. In Novem­ber, Sta­tis­tics SA said South Africa’s gross do­mes­tic prod­uct had de­creased by 0.6 per­cent in the third quar­ter of last year, fol­low­ing a re­bound in the sec­ond quar­ter.

The In­ter­na­tional Mone­tary Fund this month slashed the coun­try’s growth fore­cast for this year to 0.8 per­cent from 1.1 per­cent pro­jected in Oc­to­ber.

Mboweni is lead­ing the South African del­e­ga­tion to the WEF, which ex­plains the ab­sence of Pres­i­dent Cyril

Ramaphosa, “who de­cided to at­tend another event this year”.

Only two other min­is­ters are at­tend­ing the WEF this year – the low­est num­ber in many years.

Even the busi­ness del­e­ga­tion con­sists of a few bank­ing chief ex­ec­u­tives, a few busi­ness lead­ers, as well as black eco­nomic em­pow­er­ment lead­ers, with Dr Iqbal Survé rep­re­sent­ing the Sekun­jalo Group, and Pa­trice Mot­sepe, the founder of African Rain­bow Min­er­als and African Rain­bow Cap­i­tal, in at­ten­dance.

But some global lead­ers ques­tioned why Ramaphosa chose not to at­tend this very spe­cial 50th an­niver­sary WEF cel­e­bra­tion, at a time when in­vestors are look­ing for an­swers about how South Africa is go­ing to deal with its eco­nomic prob­lems.

Top of in­vestors’ list of con­cerns is paras­tatal Eskom, which is un­able to keep the lights on, which has im­pli­ca­tions for busi­ness. Other con­cerns are cor­rup­tion and safety and se­cu­rity.

“There is also a lot of talk about in­sta­bil­ity within the rul­ing party. Is it true?” an in­vestor from In­dia asked.

Another ques­tion was raised at the an­nual South African din­ner on Tues­day night by a prom­i­nent head of a state-owned en­ter­prise (SOE). “Why do we have a min­is­ter of SOEs if we have a min­is­ter for en­ergy, agri­cul­ture, trans­port, etc? What is his job de­scrip­tion, or is his job re­dun­dant?”

The Na­tional Trea­sury in a state­ment last week said Team South Africa at the WEF would con­vey the mes­sage that while South Africa faces chal­lenges of weak eco­nomic growth and fis­cal pres­sures, the coun­try re­mained open for busi­ness as one of the best in­vest­ment des­ti­na­tions in the world.

“Team SA will also high­light the strides be­ing made to im­ple­ment struc­tural re­forms to ig­nite eco­nomic growth; ease the cost of do­ing busi­ness; curb gov­ern­ment debt; and sta­bilise SOEs,” Mboweni said.

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