Mboweni says SA will punt structural reforms for SOEs at WEF
JOHANNESBURG - Finance Minister Tito Mboweni said on Thursday that South Africa would punt government efforts to implement structural reforms at State-Owned Enterprises (SOEs), and the country's political stability, in a bid to attract foreign direct investment next week at the 50th annual World Economic Forum (WEF) in Davos, Switzerland.
Speaking at the pre-WEF breakfast briefing in Johannesburg, Mboweni presented a broad framework which TeamSA will reference in presenting South Africa as an investment destination of choice.
Mboweni will lead TeamSA to Davos at the time the country is going through one of the worst economic crises, punctuated by lack of energy supply by Eskom, job losses which are adding to record high unemployment, and a looming credit rating downgrade by Moody's to sub-investment.
Mboweni acknowledged that the pace of economic reforms that have been called for by ratings agencies and investors, has been disappointing.
"We will say that there is political stability in South Africa, which is key to reaching economic objectives in the country. We will say there is an effort on the part of the South African government to put in place structural reforms. This includes, among others, an effort to put SOEs on the right path. Those SOEs who work will be supported," Mboweni said.
"We are probably going to say that we are facing a difficult fiscal environment, but authorities are determined to proceed responsibly in support of growth enhancing activities. I agree that we should move with speed on reforms. Government is working to resolve issues with the rail network, and we have issued a paper on the spectrum. But the pace of structural reforms is not the way we want it to be."
Since taking over in 2018, President Cyril Ramaphosa has embarked on a campaign to raise R100 billion investment during his five-year term in order to boost the economy and create jobs.
The economy is expected to grow less than 1 percent for 2019, and Mboweni is scheduled to deliver a Budget Speech next month that will set the path for economic recovery and pacify ratings agencies about Eskom, whose R450bn debt and power cuts have been cited as the greatest single threat to the fiscus.
Asked how TeamSA will respond to questions about Eskom power cuts and how this affects investor comfidence, Mboweni said it was not all doom and gloom at the power utility as government was taking steps to fix Eskom, including unbundling it into three units.
"It is not true. Yes, we experience loadshedding as a result of Eskom mismanagement. That is true, but you can't be a doomsayer," Mboweni said.
"We won't lie to people. You can't spin it away and tell people that we don't have loadshedding. But it's not true to say we have no electricity in South Africa. Government has taken steps already to strengthen the management of Eskom."
The WEF2020 Davos annual meeting will be convenved under the theme "Stakeholders for a Cohesive and Sustainable World" from Tuesday to Friday next week.
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