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