Ramaphosa talks up SA Inc ahead of World Economic Forum
South Africa has come a long way since February last year, when Cyril Ramaphosa took office — according to the president himself. This will be critical for selling the country as an investment destination at Davos next week, he added.
At a meeting on Wednesday with the South African delegation going to the World Economic Forum, he reminded participants of the work the government has done to stabilise government institutions and to get to the bottom of state capture.
“We have been building and stabilising the platform.
It is no longer a burning platform; it has been getting stronger.
And I guess now what we need is to start the process of putting up the buildings so that we can generate more growth in our economy,” he said.
In January, the World Bank cut its projections for South Africa’s economic growth in 2019 to 1.3% from last year’s estimate of 1.8%. The developmental bank said growth would remain subdued because of high unemployment and slowed household spending.
Ramaphosa said the “lacklustre” economic growth forecast by the World Bank and other institutions should not discourage the team, because the determination to ensure that the economy would grow was still there, as was evidenced by the investment summit last year when companies pledged R290-billion in investments.
“The good thing is that collaboration between government and business is going extremely well — it is possibly at a very rich level — and, as much as we have challenges, we are dealing with some of those challenges,” Ramaphosa said.
He listed the appointment of a new National Prosecuting Authority head, the pending appointment of a new South African Revenue Service commissioner and the ongoing state capture inquiry, headed by Judge Raymond Zondo, as some of the key steps taken to stabilise the country.
Eskom, a key institution crippled by state capture, would not burden South Africa at Davos, he said. The power utility, which has been experiencing difficulties in maintaining power generation and is expected to report a loss of more than R15-billion by the end of the financial year, while sitting on R419-billion of debt, was being “handled” and could be put to the side, he said.
The task team appointed by him to come up with a strategy to save the power utility had been working around the clock with Eskom’s management and board and was expected to complete its work at the end of this month.
“We are here again, but this time we can say there is some glimmer of light at the end of the tunnel in terms of what we need to do with Eskom,” he said. Despite the president’s assurances, the delegation will be saddled with other challenges, especially because of the ruling party’s election manifesto, which outlines policies that could scare off investors.
The manifesto states that, in addition to targeting inflation, the Reserve Bank should consider job creation and boosting the economy when it sets its monetary policy. It also says the party will explore the introduction of prescribed assets, which would force pension fund managers to invest in socially productive schemes. This has not been received favourably by the industry.
Tebogo Tshwane is an Adamela Trust journalist at the M&G