Economy / 29 August 2018, 06:00am / Kabelo Khumalo
JOHANNESBURG – The UK IS planning an outlay of £8 billion (R146.36bn) in Africa in the next four years and South Africa has set its sights on being the biggest beneficiary of the investments.
British Prime Minister Theresa May revealed that her country wanted to dislodge the US as the biggest investor among the G7 countries on the continent by 2022.
May said the UK was looking at playing a more aggressive role in investing in Africa and would “radically” increase its presence on the continent.
“I can today (yesterday) announce an additional £4bn programme of UK investment in African economies that will pave the pay for at least another £4bn of private sector financing,” May said.
“This includes for the first time an ambition for the UK government development finance institution CDC to invest £3.5bn in African nations over the next four years.”
May was on a working visit to South Africa, the first leg of her first three-nation tour of the African continent. Her next stop is Nigeria and Kenya.
She said that her country was not fazed by South Africa’s land expropriation without compensation policy. This was in contrast to the stance taken by US President Donald Trump, who last week called on his Secretary of State Mike Pompeo to “closely study the South Africa land and farm seizures”.
South Africa and the UK have enjoyed mutually beneficial preferential trade since entry into the first reciprocal trade agreement between South Africa and the EU in January 2000. President Cyril Ramaphosa said he wants South Africa to win most of the investments that the UK would be ploughing into the continent.
“With us seeking to raise $100bn in investment in the next five years and with the UK saying it wants to be the biggest investor in Africa… it goes without saying that we want that a lot of those investors should come to South Africa,” Ramaphosa said.
”We are encouraged by the fact that the UK is one of the largest foreign investors in the South African economy, with more than 650 British firms present in the market.”
Ramaphosa said South Africa would host an investment conference on October 25 to 27, which would bring together investors both from within the country and from other parts of the world.
North West University business school economist Professor Raymond Parsons said the UK was now keen to diversify its economy further and this offers potential economic advantages to South Africa.
“Ultimately it will depend on the mutual confidence and drive of the business people in both South Africa and the UK to ensure that what the political leaders negotiate and decide will be translated into real differences on the ground,” Parsons added.
The UK was currently going through a protracted divorce from the EU and the country had been wooing “Brexit”, with the African continent increasingly becoming important with its economy expected to exceed $5bn (R71bn) by 2025.
Said Citadel chief economist Maarten Ackerman: “Once the UK has pulled out of the EU, they will not be able to rely on EU trade agreements and will need to renegotiate their own agreements.
"This could open the potential for the UK to become an even bigger investor in Africa.”