http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 13.70Change: -0.14
R/$ = 11.02Change: -0.06
Au 1198.09 $/ozChange: 3.14
Pt 1212.50 $/ozChange: 7.00
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Jul 26, 2012

SA’s new investment policy to forge minerals, industrialisation link

Back
SECURITY|Africa|Industrial|Massmart|Resources|Security|Wal-Mart|Africa|Asia|Egypt|Libya|South Africa|USD|Security|Manufacturing|Mining|Products|Security|Environmental|James Zhan|Rob Davies|Security|Sub-Saharan Africa
SECURITY|Africa|Industrial|Resources|Security||Africa||||Security|Manufacturing|Mining|Products|Security|Environmental|Security|
security|africa-company|industrial|massmart|resources|security-company|walmart|africa|asia|egypt|libya|south-africa|usd|security-facility|manufacturing|mining|products|security-industry-term|environmental|james-zhan|rob-davies|security-person|subsaharan-africa
© Reuse this



South Africa is crafting a “new generation” investment policy framework, which will be underscored by the developmental needs of the country, especially the expansion of the country’s embattled productive sectors, Trade and Industry Minister Dr Rob Davies has revealed. A conscious effort would also be made to foster a direct link between an investor’s access to South Africa’s mineral resources and government’s ambition to support reindustrialisation.

Speaking at the launch of the United Nations Conference on Trade and Development’s (Unctad’s) ‘Investment Policy Framework for Sustainable Development’, or IPFSD, held at the University of the Witwatersrand, Davies said South Africa would refrain from entering into new bilateral investment treaties (BITs) until the new framework had been finalised. However, it would conclude BITs in cases of “compelling economic and political circumstances”.

A recent review of investment agreements signed since 1994 found the relationship between the agreements and foreign direct investment (FDI) to be “ambiguous at best”. It also found that some of the agreements posed risks, by limiting the ability of government to pursue its transformation agenda.

All these ‘first generation’ BITs were being reviewed with a view to termination, or possible renegotiation on the basis of a “new-model BIT to be developed”.

“South Africa’s updated approach would aim to achieve an appropriate balance between the rights and obligations of investors and the need to provide adequate protection to foreign investors, while ensuring that Constitutional obligations are upheld, and that government retains the policy space to regulate in the public interest.”

South Africa’s legislation in respect of the protection offered to foreign investors would be overhauled by codifying typical BIT provisions into domestic law, while clarifying their meaning in line with the Constitution.

“We would also seek to incorporate legitimate exceptions to investor protection where warranted by public policy considerations such as, for example, for national security, health and environmental reasons or for measures to address historical injustice and/or promote development,” Davies averred.

The inter-Ministerial committee dealing with investment, international relations and economic development would oversee all decision-making in respect of future investment deals.

NEW FRAMEWORK

Director of Unctad’s investment and enterprise division, Dr James Zhan, said a number of countries were undertaking similar exercises and expressed the hope that the IPFSD would offer a basis for greater global consensus on the matter.

The framework offered something of a middle way between the liberalisation of investment frameworks pursued during the 1990s and the move towards tighter regulation, pursued since the economic crisis of 2008.

Zhan indicated that the framework recognised the potential for FDI to support a country’s growth and development aspiration, but also created room for countries to pursue national policy choices, including active industrial policies.

Davies argued that South Africa and Africa were on the “cusp” of a new wave of investment, and that well-crafted investment policies were required to ensure that development flowed from such FDI.

South Africa recorded a sharp turnaround in FDI inflows during 2011, which rose to $5.8-billion, or 13.6% of Africa’s total, during the period. The rebound from $1.2-billion in 2010 was underpinned by Wal-Mart’s acquisition of a stake in Massmart, as well as mining-related corporate activity.

The performance of Africa’s largest economy also accentuated the recovery in the FDI inflows to sub-Saharan Africa as a region, which recovered from $29-billion in 2010 to $37-billion in 2011 – a level comparable with the 2008 peak. Inflows to Africa as a whole declined, meanwhile, for the third successive year, to $42.7-billion from $43.1-billion in 2010. However, the decline was caused largely by the fall-off in investment to Egypt and Libya.

Unctad said the outlook for Africa was “promising”, owing to improved investor perceptions, which were driven by relatively strong growth, higher commodity prices and economic reforms.

MINERALS-LINKED INDUSTRIALISATION

Davies was particularly keen for Africa, or for the Southern African Development Community, to adopt a common investment framework in the area of natural resources. In light of commodity demand from emerging Asia, the Minister was of the view that there was potential for a new competitive advantage to be created around access to Africa’s mineral assets.

“South Africa needs to construct a competitive advantage for our own manufacturing around access to mineral products. [But] that is going to require a policy intervention and it is here where the investment regime will prove important.”

South Africa was already pursuing this ambition on a bilateral basis, but “we will do better if we had a common understanding across Africa”.

The aim would be to capture investor commitments that went beyond technology transfer, skills development and competitiveness improvements and which began to include stipulations on value addition.

“South Africa has to make the transition from being a producer and supplier of ‘dirt out of the ground’ to producer and supplier of a higher level of beneficiated products,” he said, noting the material selling price differential between, for instance, mineral sands ($440/t) and titanium alloy ($100 000/t).

Edited by: Creamer Media Reporter
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
Other Manufacturing News
Much like South Africa was seen as an automotive hub, white appliance manufacturer Defy aimed to establish the country as a hub for the export of white appliances, Koc chairperson Mustafa Koc said on Monday. As Koc subsidiary Arcelik Group leveraged its $324-million...
Article contains comments
Steel among the five resource value-chains being prioritised
The Mineral Beneficiation Action Plan (MBAP), which is currently in draft form, should be finalised by the end of March 2015, the Department of Trade and Industry (DTI) has confirmed. The department is leading the drafting process, which also involves the National...
Hyundai Automotive South Africa (SA) opened a semi-knocked-down (SKD) assembly plant in Apex, Benoni, in September, as part of a multimillion-rand investment in its commercial vehicle division in the local automotive market. The rationale behind the SKD commercial...
More
 
 
Latest News
Increased maintenance costs, poor rolling mill yields and strike action have widened Evraz Highveld Steel’s operating loss, from R149-million in the nine months ended September 30, 2013, to R483-million for the comparative 2014 period. The company added on Monday...
Energy Minister Tina Joemat-Pettersson has misled Parliament and should be suspended pending an investigation, the DA said on Monday. "Reports indicate that the minister was involved in recommending and appointing Mr Tshepo Kgadima as chairman of the board of...
More
 
 
Recent Research Reports
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
Real Economy Insight: Construction 2014 (PDF Report)
This five-page brief covers key developments in the construction industry over the past 12 months. It provides an overview of the sector and includes details of employment in the sector, infrastructure and municipal spending, as well as insight into companies’...
Real Economy Insight: Electricity 2014 (PDF Report)
This five-page brief covers key developments in the electricity industry over the past 12 months, including details of State-owned power utility Eskom’s generation activities, funding and tariffs, independent power producers and prospects for the sector.
 
 
 
 
 
This Week's Magazine
JSE-listed real estate investment trust (REIT) Rebosis Property Fund achieved a distribution growth of 8.1% to 99.45c per linked unit in the financial year ended August 31, despite volatile market conditions.
JAMES ROBERTS The MOM incubator was designed to help babies in developing nations who were dying in conflict-struck nations or who do not receive hospital care
A low-cost, inflatable incubator won this year’s international James Dyson design award, which aims to encourage and inspire the next generation of design engineers.
The World Bank released its ‘Doing Business 2015: Going Beyond Efficiency’ report last month and ranked South Africa 43 out of 189 global economies for its ease of doing business, with Singapore topping the rankings.
Air Products South Africa officially launched its R300-million Eastern Cape air- separation unit (ASU), at its new manufacturing facility in the Coega Industrial Development Zone (IDZ), earlier this month. It is the second facility that Air Products launched in South...
BMW South Africa (SA) has signed a power purchasing agreement with energy company Bio2Watt. The offtake partnership will bring renewable energy to the carmaker’s Rosslyn plant, north of Pretoria.
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks