Land of ‘investor honey’
CYRIL SELLS SA HARD: A HAVEN OF THE RULE OF LAW AND SAFETY
Investment envoys are expected to raise R1.2 trillion over the next five years.
President Cyril Ramaphosa made an impassioned plea to investors to see South Africa as a land of promise and great opportunity with a safe and secure investment environment yesterday.
Opening the SA Investment Conference 2018, held in Johannesburg under the theme Accelerating Growth By Building Partnerships, Ramaphosa sold South Africa as a safe haven for investment.
He gave assurances that investors’ property rights would not be tampered with and that their investments would be safe under his government because the rule of law and the independence of the judiciary were the norm.
He said that despite South Africa having known the pain of conflict and deprivation, equally it had “experienced the exhilaration of liberation and knows very well the value of partnership and collaboration.
“This is what South Africa is – a land of great promise, a land of great opportunities,” Ramaphosa said.
Through the summit, ambassadors and the president received pledges of investment from foreign investors.
Over the past five months, a group comprising economist Phumzile Langeni, former finance minister Trevor Manuel, former deputy finance minister Mcebisi Jonas and former Standard Bank chief Jacko Maree embarked on a mission travelling across the country and around the globe to lure investors.
Through Ramaphosa and the envoys, some countries had made pledges of investment and as a result “we have appointed task teams to work with these countries to convert these pledges into investments”. The investment envoys were expected to raise R1.2 trillion investment in the next five years.
Ramaphosa said topping the list of government’s priorities were education and land reform as means to improve economic growth and unemployment in the country. “We have been working with the World Bank to improve the ease of doing business in South Africa and crafting a new foreign direct investment strategy for the country. Invest SA is intensifying its facilitation and aftercare service in terms of international best practice. Together we are working to fast-track investment projects and reduce red tape.” He said the country had made preparations for investment. “This includes infrastructure for business development, reduced costs for key inputs such as land, water and electricity and reduced corporate tax rates.
“We are determined that our economic policy must facilitate inclusive growth.”
Explaining his economic stimulus package and recovery plan, he said that despite the criticism from some the initiative was a “stimulus of a special type” with “South African characteristics”. These were to restore growth, save existing jobs and create new ones.
The uncertainty and concerns around the Mining Charter had been cleared up and Mineral Resources Minister Gwede Mantashe had met stakeholders countrywide, he added.
The revised charter had been presented to business and the public.
“This is the outcome of extensive and meaningful consultation between government, community, labour and business and represents evidence of our commitment to solving the challenges in the sector collaboratively.”
He assured potential investors at the summit that they should disregard perceived uncertainty as his government would implement a land reform policy that all South Africans agreed on.
The process included the appointment of an advisory panel on land reform made up of people with extensive experience in farming, policy development, academia and law.
“The panel will advise government on the implementation of a fair and equitable land reform process.
“It will redress the injustices of the past, increase agricultural output, promote economic growth and protect food security.”
He said he had explained South Africa’s approach to land reform at the United Nations and to the Americans during his recent visit to New York in the US and it had been accepted.
“We will provide land to those who need land and certainty to those who need certainty.
“We are committed to the protection of property rights,“he said.
Land of great promise and opportunities
I’m willing to argue my case with [ratings agencies] and say ‘look at us anew’, he adds.
President Cyril Ramaphosa declared himself in economic “repair mode” at a major conference yesterday as he sought billions of US dollars from foreign investors to haul the country out of recession.
The former union leader, who inherited a mismanaged economy from president Jacob Zuma earlier this year, wants $100 billion (R1.5 trillion) of new investments over the next five years. He has already secured $35 billion pledges, mainly from China, Saudi Arabia and the United Arab Emirates.
E-commerce giant Naspers said it would invest R4.6 billion over the next three years in its technology businesses and to fund technology start-ups. Drug maker Aspen Pharmacare also said it would invest R3.4 billion to manufacture sterile anaesthetics at its Port Elizabeth plant.
He has made reviving the economy a priority since assuming power in February, but he has been hampered by fiscal constraints and infighting in the ANC.
“We are here to build a country driven by enterprise and innovation,” Ramaphosa said in his opening speech to the investment conference which will look at opportunities in sectors including agriculture, manufacturing and energy. “We are in repair mode.”
Investors welcomed Ramaphosa’s rise to the presidency partly due to his strong ties to the business community. Since then, however, the economy has sunk into recession and faced a series of downbeat data.
His government’s policy of land expropriation without compensation, aimed at addressing racial inequalities that remain more than two decades after the fall of apartheid, has also unnerved investors.
Ramaphosa tried to soothe their concerns about the land redistribution policy. “I want to reaffirm that South Africa is very, very committed to property rights,” he said, without explaining how this could be achieved.
Investment rating?
The scale of the challenge facing Ramaphosa was underlined by Finance Minister Tito Mboweni’s bleak medium-term budget speech, when he unveiled weak growth forecasts and deficit estimates.
Compounding the challenge, Moody’s said in a research note that the weaker fiscal outlook outlined by Mboweni was a negative factor in SA’s credit outlook.
Moody’s is the last of the top three agencies to keep an investment grade rating on SA. It’s expected to issue a report on this soon.
The rand turned weaker after Moody’s report was released.
“The market is concerned that we could see a possible downgrade from Moody’s but this might present a buying opportunity for long-term investors who can stomach the risk and believe that the economy has a chance of a strong recovery,” said Grant Giburt at Nedbank Private Wealth.
Ramaphosa said the economy was at investment grade, but it had been much tougher to repair than he first thought. “I’m willing to argue my case with them and say ‘look at us anew … we are turning this ship around’.
“Admittedly, we will not turn immediately but it is on the way to turning,” he told Bloomberg television, referring to the ratings agencies. – Reuters
I reaffirm that SA is committed to property rights.