Trade, industry and competition minister Parks Tau said on Thursday that the mood prior to the annual meeting is “fundamentally different” this year. (Photo: X)
The South African delegation heading to the World Economic Forum (WEF) meeting says the country has a positive economic growth message to share, albeit with some caution over “structural issues” that need to be overcome.
Trade, industry and competition minister Parks Tau said on Thursday that the mood prior to the annual meeting is “fundamentally different” this year and not only is there optimism within South Africa, the country’s global counterparts are also optimistic about its future.
“We are going into next week in that environment. We have the opportunity to present ourselves for who we are, the opportunities we are able to present, but also the opportunities that are available in our country,” Tau told journalists during a pre-WEF media briefing on Thursday.
This year’s meeting is taking place from 20 to 24 January in Davos, Switzerland. It will host 3 000 leaders from 130 countries and 350 governmental leaders, including 60 heads of state. The theme is “Collaboration for the Intelligent Age”.
“This theme resonates deeply with South Africa’s aim to use collaboration to harness innovation to address its economic and social challenges, while ensuring that technological advancements are inclusive and equitable,” finance minister Enoch Godongwana said.
He added this year’s meeting was crucial for South Africa as it assumes the G20 presidency under the theme “Solidarity, Equality and Sustainability”, which “reflects the essence of South Africa’s vision for global leadership”.
The chief executive officer of Discovery, Adrian Gore, told journalists that, at last year’s meeting, South Africa’s electricity woes had dominated, and there was also a sense of decline, but the past year had shown that the country had the capacity to turn things around.
Collaboration between government, business and the private sector was producing that shift.
“There is kind of a lag process of how that affects the economy; we have to be patient about that … but I think there is confidence that getting those things right will lead to growth.”
The visit to the WEF this year comes against the backdrop of an economy that contracted by 0.3% in the third quarter of 2024, and only grew by 0.4% over the first three quarters of last year. The unemployment rate is at 32.1% and the poorly functioning rail and ports system is also impeding economic growth.
The focus is growth and jobs, Gore said, adding that Discovery was targeting a 3% economic growth for 2025.
Standard Bank chairperson Nonkululeko Nyembezi said the bank’s economists are estimating a growth of between 1.1% and 1.2% for South Africa in 2024.
“This is an improvement from the prior year where growth was 0.7%, however, investors are not going to be looking at a case for investment in 2024, they’re going to be looking at 2025 and beyond, and there, the story is a lot more positive.”
She added that the International Monetary Fund was also sceptical about South Africa being able to reach this target, however, it is now looking at around a 1.5% to 1.7% growth for the country in 2025.
“We are at an inflection point. It is visible in the hard numbers we are starting to see come through the economy,” she said, adding that there was uncertainty this time last year, due to the elections coming up in May.
“We are now at a point where we can say we have reasonable stability, we’ve got good momentum on execution of various government programmes and we face them forward, not continuously looking backwards.”
Mary Vilakazi, chief executive of First Rand Bank, said while there was uncertainty in the global economy, there were opportunities for South Africa to unlock its economic potential.
“We are mindful of the fact that there are challenges, but if we rewind to two years ago, there were challenges and the road ahead looked unclear.
“In the path forward, we can see there is an aligned thinking and an aligned action plan, which is what gives us optimism.”