By Kester Kenn Klomegah*
MOSCOW | JOHANNESBURG (IDN) — South Africa is in frantic search of foreign investors to boost its economy exposed to turbulences caused by two years of struggle to contain the global pandemic that triggered almost complete shutdown of businesses and production under lockdowns, which threaten economic efforts since the ambitious investment plan was initiated in 2018 under President Cyril Ramaphosa.
To attract foreign investors, South Africa is holding the fourth investment conference (SAIC) on March 24 in Johannesburg. It will draw participants from both the private and public sectors from the United States, Europe, Asia and inside Africa. In addition, international and regional institutions, development partners and think-tanks will come together to deepen dialogue, share experiences, and discuss business opportunities to boost investment and sustainable development in South Africa.
“The Government has placed investments at the heart of its efforts to achieve its national goal of economic reconstruction and recovery,” explains Phumla Williams, Director General of the Government Communication and Information System Information (GCIS) and South African Cabinet Spokesperson.
New investments, she adds, stimulate economic activity in South Africa and also hold enormous benefits for Southern Africa as a whole. The country is an economic hub and gateway into Africa for various markets and business opportunities, including attracting potential investors and tourists alike.
Many multinationals investing in South Africa also use the country as a base to serve their customers in Africa and in particular the southern region. As a relatively stable country with a technologically advanced telecommunications network and a secure banking system, South Africa provides support to these global companies so that they can take advantage of opportunities in the country and the region, adds Ms Williams.
South Africa’s regional partnerships include participation in the Southern African Development Community, the Southern African Customs Union and the new African Continental Free Trade Area (AfCFTA).
The African Continental Free Trade Area provides a unique and valuable access to an integrated African market of over 1.3 billion people. In practical reality, it aims at creating a continental market for goods and services, with free movement of businesspeople and investments in Africa.
The AfCFTA makes trade between African countries easier by providing new export opportunities for Southern African products and services to member countries to trade with each other without tariffs or other hindrances.
South Africa, at this crucial stage, wants to drive a post-pandemic recovery and that implies making sure corporate business leaders have access to invest in the economy. Foreign investors, with practical motivation and desire to set up new businesses, invest in or finance businesses, undoubtedly have the chance to use South Africa as the gateway into to the huge African market, as the AfCFTA is also projected to boost Africa’s income by $450 billion by 2035 and increase Africa’s exports by $560 billion, mostly in manufacturing.
In order to achieve that and critically change the business narratives, South Africa is already working with a number of neighbouring countries to grow business, trade and investment. This regional partnership provides a gateway for potential foreign and intra-African investments in the continent.
Ebrahim Patel, Minister of Trade, Industry and Competition, reiterated that since the launch in 2018, the South African Investment Conference (SAIC) has drawn delegates from South Africa and the rest of the world with the objective of showcasing the investment opportunities available that could lay down a comprehensive roadmap for building the future businesses in South Africa.
The economic policy aims primarily at sustaining growth and achieving a measure of industrial self-sufficiency. Therefore, South Africa continues offering unique opportunities for investments in the areas of economy and trade, in energy, agriculture, industry, science and technology, mining (world’s largest producer of platinum, gold, chromium), digital technology as well as human resource development and tourism.
“The efficiency of energy production and consumption is the most important factor in the growth of national economies and has a significant impact on people’s quality of life. Many countries have already adopted policies to accelerate the development of clean energy technologies. It is therefore set to look at the possibility of developing green energy based on renewable sources and the transition to new and more environmentally friendly fuels,” the conference document says.
While the three previously held conferences were described as highly successful due to its spectacular blistering high participation and has offered the necessary solid impetus for raising to qualitative level economic activities, it simultaneously presents a number setbacks and challenges too. As one of the tasks, the government and related ministries and departments will make efforts to overcome them.
Obviously, there has been adequate information on the vast investment opportunities available, and the platform “Doing Business with South Africa” helps to understand the economic and investment potentials as well as the current market conditions in South Africa.
As South Africa seeks to recover from the economic challenges exacerbated by the Covid-19 pandemic, tackling unemployment, poverty and inequality among others remains a key priority for government. It will therefore showcase the strengths and competitive advantages that South Africa offers and why it is an ideal investment destination for local as well international investors looking to grow in Africa.
South Africa is in keen competition with Nigeria and Egypt, the three are the economic powerhouses in Africa. Quite recently, President Ramaphosa reassured to provide an excellent opportunity for external countries to consolidate and advance strategic partnership, and broaden cooperation on matters of investment and socio-economic development in his country. He often pointed at diversifying the mechanisms for facilitating multifaceted cooperation and finding new spheres of business cooperation.
Over the past few years, President Ramaphosa has emphasized on his country’s interest in enhancing economic policy that would attract more foreign investment and argued further for its consistent line of principle on supporting the efforts to find consensus-based solutions to the significant socio-economic issues of South Africa, and the entire southern Africa.
South Africa’s main trading partners include China, India, the United States, Europe and Japan. Regional trade in Southern Africa is increasingly important, especially through the Southern African Development Community. The current level of engagement still low, considering the combined size of the population and consumer market potentials of the southern region. The market requires all kinds of consumer products and services.
Besides, tourism is becoming increasingly important to South Africa’s economy. While the majority of tourists come from African countries, an increasing number of arrivals are from Europe and the Americas. On the other hand, the inside out is that conferences and business events are necessary instruments for establishing partnerships and could raise to appreciably new levels in economic sectors including business tourism.
With an approximate population of almost 57 million, the population concentrated along the southern and southeastern coast, and inland around Pretoria. The eastern half of the country is more densely populated than the west.
It has three cities that serve as capitals: Pretoria, Cape Town and Bloemfontein. South Africa, a middle-income emerging market, is endowed with rich and extensive natural resources and is among fast developing group of countries in Africa. It shares borders with Namibia, Botswana, Zimbabwe and Mozambique. It is one of the 16 countries, with a collective responsibility to promote socio-economic integration within the Southern African Development Community (SADC) created in 1980. [IDN-InDepthNews – 10 March 2022]
* Kester Kenn Klomegah is a frequent and passionate contributor to IDN. During his professional career as a researcher specialising in Russia-Africa policy, which spans nearly two decades, he has been detained and questioned several times by federal security services for reporting facts. Most of his well-resourced articles are reprinted in several reputable foreign media.
Photo credit: South African Investment Conference (SAIC)
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