South Africa’s favourable balance sheet offered an opportunity for boldness in the economy, President Thabo Mbeki said on Saturday.
”Let’s move forward faster… let’s perform better, because we’ve got the basis to perform better,” he told journalists in Cape Town after a meeting of the high-level government-convened International Investment Council.
”In a sense, let us be bolder even in our aspirations, which might mean being less risk averse.”
Mbeki was commenting on remarks earlier in the same briefing by Reuters chairperson Niall Fitzgerald, who said all the council members agreed Finance Minister Trevor Manuel had through his management of the economy built up a ”very strong” balance sheet for South Africa.
”You have a balance sheet in order to use it,” Fitzgerald said.
”There should be an assessment of what will be the consequences of using that balance sheet more, borrowing more to invest in growth, sustainable growth.”
Mbeki said this balance sheet surely gave South Africa ”a possibility to change the rate of growth in a more significant way than might have been the possibility in the past, when that balance sheet was being built up”.
”Also, there’s a greater possibility to be bolder, there’s a greater accessibility to resources that you would need, both domestically and internationally, which would make it possible to, in a qualitative way, to move that growth rate and development rate a bit better than in the past.”
Ten business leaders from across the globe, including Fitzgerald, Mitsubishi executive vice president Masaki Miyaji, and steel magnate Lakshimi Mittal, plus six Cabinet ministers — including Trade and Industry Minister Mandisi Mpahlwa and Manuel — attended the three-day meeting.
Reading a prepared statement, Mpahlwa told journalists council members had congratulated the government on the steadily improving performance of the economy, saying they believed South Africa was ”better positioned than ever” to increase the rate of growth and job creation.
”They indicated that with faster implementation of South Africa’s policies, six percent growth could be reached well before the government’s target date of 2014,” he said.
They had suggested that remaining barriers to growth such as the skills shortage, ”poorly designed” regulations, and infrastructure capacity ”could and should be addressed speedily”.
”They expressed their support for broad-based black economic empowerment, but emphasised the need really for concerted communication to explain the programme to potential investors,” he said.
He also said a nationwide investment climate survey, draft findings of which were given to the Cape Town meeting, indicated that the government had to ”constantly” give attention to lightening the regulatory burden, particularly on small and medium enterprises.
DaimlerChrysler chief executive Juergen Schrempp said there was consensus in the council that black economic empowerment was ”absolutely required” from a historical, economic and political point of view.
”Black economic empowerment is an opportunity, possibly is the basis for something we discussed…. where we said could we have a bit more growth than what we have so far, which is very good with four or 4,2%, because without black economic empowerment you will not be able to do that.”
However he said ”certain points” in draft BEE legislation were not yet fully understood, and that BEE could be construed by outsiders as an obstacle to investment.
”And obviously that’s precisely what we don’t want. We want it as a promotion to actually tell the world that South Africa has tremendous potential, and that [BEE] is the basis of doing that.
”So we have been talking about how can that be communicated better.” – Sapa