CAPE TOWN – President Cyril Ramaphosa on Wednesday moved to revive his investment drive, vowing that the government would overhaul the foreign direct investment (FDI) promotion architecture in South Africa.
Ramaphosa assured investors that South Africa was still attractive for investors, in spite of ongoing xenophobic attacks against foreign nationals.
He urged investors to get behind his government’s efforts to salvage the economy, saying local investment served as a catalyst for much-needed FDI.
Ramaphosa said his government would therefore work hard to remove policy uncertainty and other obstacles to investment.
“We recognise the urgency with which we need to reform our investment promotion architecture to remove policy, regulatory and other impediments,” he told a breakfast seminar ahead of the start of the World Economic Forum (WEF) on Africa in Cape Town.
A report tabled by Ernst & Young (EY) at the conference showed that FDI flows to the continent were expected to increase by 15 percent this year, following an 11 percent rise last year.
EY partner and Africa region government and public sector leader Sandile Hlophe Africa said Africa needed to roll up its sleeves in order to attract FDI into the continent.
Hlophe said that attracting FDI should be one of the most important initiatives for African governments.
“FDI helps in economic development and is especially important for developing economies as it leads to job creation and wealth-creating economic growth,” he said.
South Africa attracted only $5 million (R75.85m) in FDI, placing it behind Egypt ($12m), Algeria ($9m), Nigeria ($8m), Ethiopia ($7m) and even Zimbabwe ($6m), he said.
Ramaphosa said South Africa was at number 82 out of 190 in the World Bank’s Ease of Doing Business Index, and his administration had set itself the ambitious goal of progressing to the top 50.
He said the country was not creating enough jobs to address unemployment, which was at 29 percent.
“It is also about staking a claim in the future of a great nation that has the means and the drive to become one of the world’s most vibrant economies,” he said.
“I call on all investors present here today, particularly local investors, to be part of this new momentum. We want and need foreign direct investment, and scaled-up domestic investment is the necessary catalyst.”
The meeting has attracted more than 1 000 global leaders in business, government, civil society and academics.
However, it took place amid attacks on South Africa businesses in Nigeria and Zambia as locals staged revenge attacks over the xenophobic rampage in Gauteng this week.
Shoprite, Africa’s food retail giant, said several of its stores were unable to open due to protest action.
“Extensive damage has been done to several supermarkets over the past 24 hours, impacting the lives of millions of law-abiding people,” Shoprite said.
“We remain committed to engaging with the government, industry and consumer groups so that decisive action is taken against those involved in violent crimes and intimidation against foreign nationals as well as to convey our strong position against xenophobia,” the group added.
Leaders, notably from Rwanda, Malawi and the Democratic Republic of Congo, have not attended the WEF conference due to the xenophobic violence.
Vice-president of global innovations at Chinese giant Alibaba, Brian Wong, said Africa needed to improve inter-regional trade to boost economies and bringing the benefits of new technology to their people.
He said when Alibaba was founded by Jack Ma in 1999, China had a per capita income of only $800. Today, it was more than $9 000 a year.
“When Jack came to Africa a few years ago, he saw the opportunity for small businesses to become a much bigger part of their economies through technology and digitisation. Having these technologies could enable small companies to grow and leapfrog into the 4IR, without requiring traditional infrastructure,” he said. | Additional reporting by Dineo Faku and African News Agency (ANA)