Johannesburg - The government will get another chance this week to restore confidence in the South African economy at the World Economic Forum (WEF) on Africa 2016 in Rwanda, as it continues to build on its growth prospect after rating agency Moody’s gave the country a stay of execution last week.
On Friday, the country got a morale boost from positive comments by Moody’s and the International Monetary Fund, which said the economy could experience mooted recovery from next year.
Moody’s confirmed the country’s investment credit rating but changed the outlook from stable to negative with a Baa2 rating – which is two notches above sub-investment grade – and said South Africa was approaching a turning point after several years of falling growth.
Tomorrow Deputy President Cyril Ramaphosa would lead a government and business delegation to the WEF and promote the country as open to business and a preferred destination for investments, the Presidency said. It said the delegation would punt South Africa’s macroeconomic environment, which it said was resilient “with a dynamic and stable economy underpinned by solid economic fundamentals”.
The delegation includes Ministers of Finance Pravin Gordhan, Trade and Industry Rob Davies, Post and Telecoms Siyabonga Cwele and Minister in the Presidency Jeff Radebe. Representatives of Eskom, Industrial Development Corporation, Old Mutual and ArcelorMittal will also attend.
On the mend
NKC African Economics senior economist Bart Stemmet said yesterday that the government needed to convey a message that it was on the mend after an extremely difficult and uncertain six months.
“Policy certainty and continuation are vital for prospective investors and the South African delegation will look to assure the international business community that the government is working to create a friendly environment and not impeding property rights in the country,” Stemmet said.
Efficient Group chief economist Dawie Roodt also said investors wanted institutional stability. “If I invest in a country, I want to know that the rules will be enforced… I want clarity on policy and I want to see efficiency,” Roodt said.
WEF Africa 2016 is themed around the so-called digital revolution.
Mercantile Bank consulting economist Trudi Makhaya said recent economic history had shown that developing countries did not have to follow the same path of development as industrialised nations.
“They can ‘leap-frog’ the phase of heavy industry… and jump straight into harnessing technologies such as artificial intelligence and 3D printing. There is some truth to this idea but human capital development is still central to economic development, whatever the technology in use,” Makhaya said.
BUSINESS REPORT