JOHANNESBURG - President Cyril Ramaphosa has once again given the country reasons to be hopeful despite the economic gloom that has seen the unemployment rate jump to 27.5percent in the third quarter.
Ramaphosa last week brought together captains of JSE listed, private and international companies under one roof to discuss how they could invest billions into the stagnant economy.
He raised the hope that he was serious about tackling South Africa’s mountains of despair.
This is a good start for the economy that is juggling a technical recession, a stubbornly high unemployment rate as well as low business and consumer confidence.
South Africa needs an urgent solution to its economic quagmire.
For job seekers, the fact that Ramaphosa has managed to win the hearts of local and international investors brings hope.
Already, his gesture has yielded some results with business pledging to invest R290billion into the economy.
These pledges are a vote of confidence for Ramaphosa’s plan to raise $100bn (R1.46trillion) over the next five years.
The inaugural investment summit in Sandton attended by 1300 high profile delegates, including chief executives, cabinet ministers and business owners, should be celebrated.
The fact that the Sandton Convention Centre was filled to capacity, with some delegates struggling to find seats, shows that, South Africa Incorporated, was on the day, oversubscribed.
Such a level of interest is just the catalyst that South Africa needs to begin the journey of rebuilding the economy.
NKC African Economy economist Elize Kruger said the single most critical development to emerge from the summit was the re-injection of confidence into a political system that is shifting the policy emphasis away from state-led development.
Under former president Thabo Mbeki business and consumer confidence were so high that the economy could register digits above 5percent of growth.
The situation changed under Mbeki’s successor, Jacob Zuma, who was viewed with suspicion by business.
The latest investment pledges are a breath of fresh air after Zuma’s disastrous policy regime. The shambles over the 2015 visa regulations, which cost the country R7.5bn as some tourists simply stayed away, is a point in case.
A few months ago South Africa’s options to turn the situation around seemed limited, given an economic and political environment that had spooked investors following nine years of corruption and state capture.
But Kruger described the investment summit as a sign of a clear change in direction regarding economic policy away from the discredited state-development model that has served South Africa so badly.
“It was an opportunity well taken to demonstrate a new order, a new wind of change and a fresh perspective on where the country could be heading. But the power that organised labour and the old ways of thinking about labour and capital still are going to prove formidable obstacles,” Kruger said.
Business and the government still have a long way to mend the relations that mothballed under Zuma.
But the tone of both the investment and the job summits are encouraging signs that business, the government and labour can work together to create 275000 jobs and begin the road to recovery.
“The investment strike by business is over!” Ramaphosa said to thunderous applause at the summit.