The overwhelming sentiment emanating from the 2016 World Economic Forum (WEF) in Davos, Switzerland, is that investors continue to see South Africa as a preferred investment destination, the presidency said on Saturday.
President Jacob Zuma led the high-level Team South Africa delegation and delivered the message that “South Africa is open for business to global investors and other stakeholders”, the presidency said in a statement.
“Team South Africa leveraged the presence of international business, analysts, and politicians in Davos to assure the global community of the country’s commitment to maintaining policy certainty, fiscal discipline, macro-economic stability, and the promotion of inclusive growth and development.”
South Africa reiterated that the national development plan, the nine-point plan for economic recovery, and Operation Phakisa were being implemented to ensure economic and social growth and development.
Current global economic problems required South Africa to develop a robust and responsive set of measures to ensure economic stability. This message was consistently advocated by Team SA to delegates in Davos, the presidency said.
During the WEF, Team SA had high-level interactions including bilateral discussions. Zuma hosted global investors during a session of the Business Interaction Group on South Africa. During this session Zuma emphasised South Africa’s commitment to policy certainty by announcing the establishment of the Inter-Ministerial Committee on Investments and a one-stop inter-departmental clearinghouse to facilitate support for investors.
With particular reference to the theme of Davos 2016, “Mastering the 4th Industrial Revolution”, Team SA emphasised the need to create a balance between the use of technology to mechanise and industrialise to move the economy into a knowledge state of human development and job security.
“The overwhelming sentiment emanating from Davos was that investors continue to see South Africa as a preferred investment destination. In addition, many countries around the world are faced with similar challenges of slowing economic growth, falling commodity and oil prices. Davos 2016 presented Team South Africa with an opportunity to discuss these challenges, global responses, and best practices,” the presidency said.
Speaking to the media, Finance Minister Pravin Gordhan said “very positive sentiments” had been expressed towards South Africa and the international community continued to see South Africa as a preferred destination. The fact the multinationals – among others, Mercedes Benz, BMW, Johnston and Johnston, and Marriot Hotels – continued to invest in the country was indicative of this positive sentiment. In the past week, ICICI Bank of India also announced it would establish an office in South Africa.
Trade and Industry Minister Dr Rob Davies said: “We’re telling investors that despite our country’s enormous challenges, many due to global shocks, we are resilient.”
It was also significant that according to the Oxford Business Group “foreign investors are often less pessimistic about South Africa than many South African companies are”, he said.
While communicating that South Africa was open for business, Team SA also acknowledged the challenging times in which the country found itself.
In this regard, South African Reserve Bank Governor Lesetja Kganyago, speaking to the media in Davos, said that as far as South Africa was concerned, “our pillars remain our strong macro-economic foundations and a solid monetary policy framework”.
Johannesburg Stock Exchange CEO Nicky Newton-King pointed out that “we have to understand that there is the new normal which is the slow growth, highly volatile, and uncertain global world. South Africa competes in that global world and we are connected from a financial market perspective”.
Industrial Development Corporation chairwoman Busi Mabuza summed up the challenges of the 4th industrial revolution. “It is the convergence of technology and creativity of people. We need [a] young population that is skilled, knowledgeable to use telecommunication and medical technology for the betterment of the people. Our networks for telecommunications should be robust enough to support the implementation of the 4th industrial revolution.”
Zuma said what remained undisputed was that with all sectors working together South Africa could move forward.
“The brand of our country depends of all sectors playing their part for our common developmental agenda. This means business, government, and labour must keep interacting and talking to ensure that we move together towards inclusive growth and prosperity for our country.
“We must build on the WEF 2016 success by cementing unity in action and stronger partnerships for the good of our country and its people,” he said.
The presidency said Team SA went to Davos against the background of investor confidence that had been demonstrated by many international companies that had increased their investments and expanded their South African operations.
Among these were:
– Mercedes Benz had invested R2.4-billion, General Motors R1-billion, Ford R3.6-billion, the Metair Group R400-million, Goodyear R670-million;
– BMW had recently increased its investment by R6-billion and VW by R4.5-billion;
– Beijing Automobile International Corporation (BAIC) announced an investment of R11-billion in a vehicle manufacturing plant;
– Hisense had expanded its South African operations and recently started exporting into the Southern African Development Community (SADC) region from its South African base;
– Marriot Hotels had also announced it would increase its South African footprint; and
– Starbucks, Dunkin Donuts, Krispy Kreme, and Facebook had chosen to set up offices in South Africa.
Team SA on Saturday concluded a successful programme at the 2016 WEF, the presidency said.