French companies are confident in the South African market and in its future, French Embassy Economic Counsellor William Roos assured South African journalists at a briefing on Thursday. He pointed out Some 400 French companies had already set up business in South Africa and others are interested in doing so.
Recently-elected South African President Cyril Ramaphosa had been acting to reform and improve governance in the State sector. These moves had been "very well received" by French business, Roos reported.
South Africa and France are thus now both led by reformist Presidents -- in the case of France, Emmanuel Macron, elected last year. As a candidate, Macron made it clear that he had a reform agenda for his country.
"France needed reform," stated French Ambassador Christophe Farnaud. "The government has launched reforms. We have big potential. We are still the sixth biggest economy, globally. But we need reform, to remain competitive. The economy is the centre of our position."
"We are still in the middle of the reforms, because it takes time," he observed. Measures already passed into law are reforms of the labour laws and reform of the tax system.
The labour market reforms have brought more flexibility into the country's labour market, allowing companies and workers more room to manoeuvre in negotiating working conditions, instead of always having to follow rigid national frameworks. The tax reforms were intended to facilitate matters for business, including foreign investors, and to stimulate entrepreneurship. For example, the wealth tax has been repealed and the corporate tax has been cut. Further cuts in corporate tax will follow, with the aim of reducing it to 25% by 2022.
Reforms in the transport and educational sectors are now being launched. Although France has a good educational system, the aim is to ensure that no one will be left outside that system. "We have a plan to improve the vocational education system," highlighted Farnaud.
One of the objectives of these reforms is to make France even more attractive for foreign investment. The country had, the Ambassador pointed out, always been favourable towards foreign investment. Currently, there were some 25 000 foreign companies operating in France. Included in this number were South African companies, who had enjoyed significant success.
The country had excellent transport and other infrastructure. It had one of the lowest cost electricity supplies in Europe. France had improved its cost competitiveness, particularly in comparison to Germany, over the past five years.
"For years, France has been one of the top countries for innovation," pointed out Farnaud. Three of Europe's ten most competitive companies are French. Moreover, "France has one of the highest productivity levels in the world."
Roos noted that his country was again experiencing good economic growth -- 2% last year and forecast to be 2% again this year. The country's demographic growth rate was also good, at 0.6% a year. "They [the reforms] have worked pretty well so far," affirmed Farnaud.