Johannesburg - Small Business Development Minister Lindiwe Zulu said South Africa will weather problems associated with the recent credit rating downgrade to junk status.
Speaking at a business forum between South Africa and Qatar in Pretoria on Wednesday, Zulu moved to allay investor jitters over the downgrades, charging that the government was ready to deal with concerns raised by investors and rating agencies.
“It is not the first time that we are finding ourselves in this,” Zulu said.
“The government has taken upon ourselves as government, the private sector and our communities to work together to weather the storms. It is going to be a very difficult period for us. We shall weather the storm working together.”
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Ratings agencies S&P’s Global Ratings and Fitch Ratings last week downgraded the country’s credit rating to sub-investment grade. The South African Reserve Bank earlier this week said the downgrades could put pressure on the rand and accelerate inflation.
Zulu’s assurances came as President Jacob Zuma hosted the Emir of the State of Qatar, Sheikh Tamim Bin Hamad Al-Thani, who was on a state visit to South Africa which was, among others, aimed at deepening economic relations between the two countries.
In a statement on Tuesday, the Presidency said that the total trade between South Africa and Qatar had increased from R4 billion in 2012 to R7 billion last year.
One of South Africa’s largest investments in the Middle East is Sasol’s joint venture gas-to-liquid facility located in Qatar.
Commitment
“[The] two heads of state have agreed to advance our relations to a strategic level in demonstration of our commitment towards strengthening our economic relations.
“Inasmuch as fostering partnership among business communities is important, it is equally imperative that we emerge from these engagements with a structured programme of co-operation,” said Zulu.
Numerous opportunities of co-operation existed between South Africa and Qatar in agro-processing, financial services, mineral beneficiation, petrochemicals, aerospace and defence, infrastructure development and tourism.
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She said South Africa’s focus on radical economic transformation opened up opportunities to all South Africans, with focus on black South Africans.
“In line with South Africa’s commitment to radical economic transformation, we must ensure adequate participation of black entrepreneurs.
“The bottom line is that and there is no compromise land was taken away from the majority of our people.
“That has to change if we are to make sure there is peace, security and stability in South Africa.
“This should not scare any of our investors. Your investment in South Africa will always be safe, because in South Africa we have very strong institutions, whether its institutions of governance or financial institutions. We make sure that anybody who comes to South Africa with their investment is protected,” she said. South Africa had prioritised the creation of black industrialists and the integration of small- and medium-sized enterprises, she said.
“The black industrialists are the people that you would need to have more engagement with.”
She said there were numerous investment opportunities in South Africa and the rest of the continent.
“The continent is on the move, with a whole lot of construction happening.
Al-Thani said South Africa could use Qatar’s location and logistics infrastructure to export to the Middle East, Asia and Europe. He said Qatar could also be a gateway for South African products to the Gulf Co-operation Council Common Market and the Greater Arab Free Trade Area.
Sekunjalo chief executive Dr Iqbal Survé said Africa presented enormous investment opportunities.
“Unlike Europe, which is battling slow economic growth, and Asia with an ageing workforce, Africa - and South Africa in particular - presented high growth returns on investment in a very secure environment. We have very sophisticated legal, constitutional and banking systems,” Dr Survé said.