President Cyril Ramaphosa.
President Cyril Ramaphosa.

SA should lead its economic recovery ahead of summit

By Dineo Faku Time of article published Oct 22, 2018

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JOHANNESBURG – President Cyril Ramaphosa’s investment envoy, Phumzile Langeni, has said that investors wanted South Africa to lead the recovery of the country's economy ahead of the Presidential Investment Summit this week.

Langeni told Business Report in an interview last week that the international business community pledged to support South Africa and Ramaphosa’s reform drive. She said there was a growing goodwill from investors towards South Africa.

“Essentially what they are saying to South Africa is underwrite your own future,” said Langeni. Feedback from domestic investors was, however, a mixed bag.

“Some people are very optimistic. They believe that some of the changes we have seen, for example dealing with corruption and addressing policy issues, are positive. There are a handful of local people who do not seem to be as optimistic. I think as people see decisive action by leaders in the government they will see there is a positive story,” she said.

The two-day summit, which starts on Thursday, comes against a backdrop of a 27percent unemployment rate and a constrained economy that has slipped into a technical recession after two successive quarters of negative growth. It follows the two-day jobs summit held in Johannesburg earlier this month.

In April, Ramaphosa announced an ambitious plan to push for R1.3trillion investment into the economy over the next five years. The announcement was followed by a stimulus package which targeted key economic sectors such as agro-processing, infrastructure development and the car industry last month.

Ramaphosa appointed Langeni, who chairs Afropulse alongside former finance minister Trevor Manuel, Standard Bank chief executive Jaco Maree and former deputy minister of finance Mcebisi Jonas to champion the investment drive.

Langeni said the most important thing about their interactions with investors had been candid independent feedback from both international and domestic investors as well as hearing their perception about South Africa. “It has not only been sobering and provided points of reflection but it also provided a glimmer of hope,” she said.

The summit takes place a day after Finance Minister Tito Mboweni tables his maiden medium-term Budget policy statement (MTBS) on Wednesday. The MTBS will be key to Moody’s ongoing assessment of South Africa.

The agency last week said that the government could reignite the economy if it implemented structural reforms that would include curbing the public debt. It recognised the country's socio-political issues which have led to spending pressure in a low-growth and high-unemployment environment. Economists expect Mboweni to give details on the government's policy direction and give meat to Ramaphosa’s stimulus package.


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