Fair winds blowing for Nene so far on investor road show
NEW Finance Minister Nhlanhla Nene this week continued with an international investment road show with the economy showing signs of strong recovery rather than the headwinds his predecessors faced in recent years.
The National Treasury said on Friday that the purpose of the road show was to update investors on the latest macro-economic, fiscal and monetary policy, political and business environment.
“The SA team is covering major business and investment districts, London and New York, and are meeting with fixed-income and equity investors who manage trillions of dollars of assets under management and have invested a sizeable portion of that in the South African economy,” the Treasury reported.
The South African delegation is led by Nene, accompanied by Deputy Minister of Finance Mondli Gungubele; Treasury director-general Dondo Mogajane, and officials from the National Treasury and Reserve Bank.
A sticking point raised by investors was the current debate over the government’s plan to expropriate land without compensation.
Jabu Mabuza, who is chairperson of the Eskom board and part of the delegation, said they were well received by international investors.
“On the land issue, Team SA managed to address the issue and point out to investors that this issue had been put on the table by the president, articulating that in the past 24 years we had failed to deal with this issue,” Mabuza said.
“We pointed out to investors that South Africa had been able to soberly confront more serious issues. The way to deal with the land matter is not to duck and dive, but to own it.”
The road show takes place almost a year after former finance minister Pravin Gordhan was unceremoniously recalled from such a trip, only to be fired days later in a cabinet reshuffle that faced a pushback from the markets and rating agencies.
Negative
Business confidence has also been in the broadly negative territory since the start of 2013 and remained there up until the first three weeks of November.
When the Bureau for Economic Research (BER) conducted a fourth-quarter survey for 2017, business sentiment was at a seven-and-a-half-year low during the second quarter of 2017, with seven out of 10 respondents unhappy with business conditions then.
This week, however, BER said business confidence in the country rose 11 points in the first quarter of this year – the highest in three years. Since 1975, the business confidence index has risen by 11 points or more on only 15 occasions.
Tanya Cohen, the chief executive of Business Unity South Africa, said investors had reiterated the importance of continued efforts to address corruption and inefficiencies within the government and particularly in state-owned enterprises.