Total investment in South Africa grew by more than 8% in the first half of the year, Finance Minister Trevor Manuel said on Monday.
Private investment expanded by 7% in the same period, he told an investment forum of the Organisation for Economic Cooperation and Development (OECD) in Sandton, Johannesburg.
Private capital flows are expected to come to $110-million this year, the highest level since the mid-Nineties.
”We are well-placed to capture a substantial share of this channel into economic growth and development,” Manuel said.
Established in 1961, the OECD comprises mainly Western countries to promote free international trade and to finance the coordination of economic aid to developing countries.
Manuel said South Africa still has a number of challenges to overcome to increase the pace of investment.
”The investment rate must rise from the current levels of around 16% of the gross domestic product to propel us into more rapid growth, development and poverty reduction.”
South Africans can not say they do not have savings to pursue investment because they have access to the global savings pool, the minister said.
The country’s credit rating also puts it in good stead to attract sufficient foreign savings to meet its investment requirements.
”But we also know that the vast majority of our savings for investment must come from our own citizens and corporations.”
Manuel said his medium-term budget policy statement last week set out an agenda for fostering high levels of investment, faster growth and lower unemployment.
The government’s ambitions in this regard were not limited to South Africa. Its economic development was inextricably linked to that of the rest of Africa.
Manuel called on governments of the continent to devise policies and an environment that would be conducive for business.
”This will help the African private sector to develop and stimulate growth, which would in turn lure foreign investment,” he said. — Sapa