South Africa is open for business

Deputy President Cyril Ramaphosa

As a former businessperson, whenever I looked at where one can invest I often looked at four areas.

Firstly, whether the country where one would want to invest has good governance and whether that governance is stable and predictable.

Secondly, whether the country has good economic management policies and whether they are also stable and predictable.

Thirdly, I would look also at its labor market and ask myself whether there is stability as well as predictability.

Lastly, I would look at who else invested in that country and ask the question: Is the country connected to other interesting countries and partners?

Looking at South Africa the predominant question is whether South Africa is a stable country from the governance point of view – and whether it has embedded in it a peaceful current situation and a peaceful future.

After having emerged from a very conflict-ridden past, we have emerged as a peaceful country.

That our people feel the need to express themselves now and again through democratic means such as protests, is allowed, and commonplace all over the world.

Then there is our electoral system.

We just had elections recently.

We’ve had those elections since 1994. They have yielded the will of the people and recently the people of South Africa demonstrated their own will.

The people made their choice of who should lead local government. The ruling party suffered losses but it is important to emphasize that the ANC still emerged the dominant party throughout the country.

Even as the ANC suffered some losses, it accepted them. That is itself a key indicator when considering whether a country has political stability or not – and whether democracy rules or not.

The other important thing that one should look at is whether that country has durable institutions. South Africa does have durable institutions, which have been tried and tested since 1994.

Prior to 1994 we didn’t have any institutions to speak of.

Since 1994 we have built robust and durable institutions including an independent judiciary.

A number of other institutions, such as the office of the Auditor-General, audits the books of government from the Presidency right down to local municipalities.

They speak their mind without any interference.

We have a central bank that is independent, that looks after monetary policy and makes decisions without any interference from government.

That to me is a very important marker whether a country has good governance or not.

In our Constitution we have institutions for upholding democracy. There is the office of the Public Protector. The Public Protector is also robust and is there to protect the public and ordinary citizens of our country on issues of corruption and abuse of power by government institutions. That is deeply enshrined in our Constitution.

We also have the South African Human Rights Commission (SAHRC) that looks after the human rights of our people.

We have in addition a number of other civil society institutions that are there to guard the process of democracy.

In South Africa the rule of law is observed. Whomever is in power may not wake up one morning and determine new laws by diktat. Our laws are made by a representative and robust Parliament.

If I want to invest in a country I would look at whether all these institutions exist.

It is true that in South Africa we have our challenges.

In the main I would like to believe that I would tick a number of boxes positively and say this is the country that I can invest in.

When it comes to economic management I would look at whether there is stability there. Are there economic policies? Or is economic management just at the whim of those who are in government?

In South Africa we have economic policies that are turned into law. We have the National Development Plan (NDP) which seeks to determine where the country should be by 2030 and sets out a number of things that need to be done.

We also have Industrial Action Policy plans that also set out what the industrial policy of the country should be.

This is aimed at ensuring that those who want to invest in the country are able to pick up the policy that has been set out.

They will be able to pick up laws that have been set out and determine for themselves whether the country indeed is the type of country that would follow the type of policies that are set out or not – without having to resort to rumors and gossip. They will be able to look at the laws that are being passed.

I would also like to look at whether a country is able to respond to continuous challenges.

Sometimes economies go through highs, but sometimes they go into a slump.

I would like to see whether the country would be able to respond timeously to some of those challenges.

In South Africa we have the Nine-Point-Plan, that seeks to respond to the current challenges that the country is going through.

Many other countries in the world are going through similar periods of economic turmoil. China and several European countries are presently going through that period.

Because our economy is largely commodities-based, we’ve had our own challenges.

Initially we faced an energy challenge. Many countries in the world do face an energy challenge from time to time.

I remember California went through a number of blackouts. We also went through a number of blackouts and we had to respond as a government and as a country to stabilize our energy generation.

Now we are looking forward to a future where we will have abundance of energy.

As part of this plan we looked at a number of other areas that can be the pillars on which we build economic growth going forward.

One of them is the Oceans Economy.

South Africa is surrounded by 3,000km of ocean and we came to the conclusion that we have not really focused on exploiting this huge resource that could generate growth in our economy.

Recently President Jacob Zuma visited Malaysia. He learned that whenever they encountered certain challenges they embarked on a process called ‘Big Fast Results’ and established labs where stakeholders took a few weeks to find solutions.

We have adapted what we learned in Malaysia into our Blue Economy strategy. Out of the labs we established there were a number of innovative and interesting ideas.

We put together people from government, business, labor and a number of people who are interested in the Oceans Economy and we started focusing on areas such as Aquaculture, Marine Transportation, Ship-building and a number of other related sub- industries.

From doing that we are already seeing a lot of investment commitments from local and offshore countries.

Up to 7 billion dollars has been committed as investment actions or plans around the Oceans Economy.

We have seven ports in South Africa. Therein lies a number of opportunities that are proven. Some of them are investment opportunities that can yield quite a lot of benefits for any business-oriented enterprise.

In this regard, it shows that a government that is able to take interventions to respond to challenges that a country encounters is a government which I call smart.

The South African government has been able to do so.

The other area to address is to get rid of the bureaucratic clutter that prevents people from investing in our country.

A number of countries set out a number of regulations, institutions and laws that makes it difficult for business to invest in countries.

We realized that this was a barrier and we addressed it and decided that we are going to establish a One-Stop-Shop, which we call ‘Invest South Africa’, where business people can go to one place and be able to have all their issues addressed and solved.

This shows from the economic point of view that we are a government which is willing and prepared to have investors come to South Africa and invest without any barriers.

One of the things we also had to address as part of our Nine Point Plan is the management of our State Owned Enterprises (SOE’s).

South Africa has embarked on that journey and this journey is going to lead us to a situation where SOE’s will be better managed, better operated and they will be able to contribute to the developmental mandate and also a profit driven mandate.

I would look at whether a government is flexible enough, modern enough and smart enough through its economic policy to manage all these.

I would also look at whether it has an economic infrastructure that can attract investment.

The South African government has taken time and trouble and a lot of money to improve its infrastructure.

It has had to address two challenges. To address social infrastructure in the form of housing and education.

It also had to deal with economic infrastructure in the form of building roads and improving every type of infrastructure that can improve the economic performance in the country.

In the past 21 years, a great deal of government resources has gone into investing, to position South Africa as a very attractive investment destination.

Today, South Africa has become an attractive destination and a leading destination from the investment point of view on the African continent. Largely because of the economic infrastructure that the country has put in place.

It stands heads and shoulders above a number of other countries which are in our peer group.

The financial sector of our country is another area that I would look at and ask myself whether it has a financial sector that is stable, that can attract me to invest in that country.

Our financial services sector is one of the leading ones in the world.

We have an extremely well managed financial services sector and very stable, and it has been able to withstand the various shocks and a number of challenges that the financial services sector has gone through globally.

I would also look at whether the country has a good market for me to be able to sell my goods and services.

We’re a population of 55 million but we have access to a population of more than 200 million for the reason that we are inter-connected with a number of countries in the SADC region and the Southern African Customs Union and that enables us to have much greater reach as a market than as a population of 55 million.

With South Africa you are looking at a fairly big market.

These are the economic issues that I would look at if I were to invest in South Africa.

One needs to talk about the negatives as well. The negative is that we have not reached the same level as you have reached when it comes to savings.

Our savings capability is at a low level. This is something that is being addressed on an ongoing basis.

There are quite a number of challenges which we are addressing.

The labor market is another important area that I would look at if I was to invest in a country.

We have some 14 million people who are in employment.

[Of these] 6 million have been added in the past 21 years.

A lot of jobs have been created as we had good period of growth.

However, having said that, we’ve got a number of our people who are unemployed.

Our unemployment rate is one of the highest in the world and it is a huge challenge for the government of South Africa.

It’s a challenge that we are addressing on an ongoing basis.

The key challenge here is that the majority of these people who are unemployed are young people.

We are embarking on a number of initiatives in order to deal with issues of education and skills development

Through various partnerships we are focusing on how we can draw all these young people into the world of work and prepare them for future economic activities.

We’ve developed a good relationship with business and labor in the past few months to create up to one million jobs within the next three years to draw young people into internships.

We are able to do this through the relationships that we are building with various stakeholders.

The other issues with regard to the labor market is whether we’ve been able to establish good and enduring relationships with the key role players in the economy, particularly labor and business.

This we’ve done to good effect through institutionalizing the relationship that we have with labor, government and business through an institution called Nedlac.

This institution rose out of the past that we had as a country as we were moving towards democracy.

We’ve been able to sustain this as an institution that helps us deal with challenges and problems by drawing all stakeholders together.

A few years ago we started experiencing very violent and long strikes. The President identified this as an area that needed to be focused on and we have indeed through this institution.

We are now moving towards an agreement which is going to further stabilize the labor market.

If I were to invest in a country this is one area I would want to focus on to see whether the country is able to mediate the conflicts and the differences that occur in the labor space.

We are able now to move in that direction in a way that we are now going to reach an agreement that will be institutionalized into laws that are going to regulate the relationship between unions and employers.

We are also moving towards instituting a national minimum wage, which hopefully will lead to further stability in the labor market. It is a call which has been made by trade unions in our country for a very long time.

I need to remind everyone here that South Africa is one of those countries that has for many years had very militant trade union federations and we’ve been able to establish very good working relationships

To this end we can boast that our labor market is stabilizing more and more as time moves on.

What else would I look at if I wanted to invest in a country?

I would look at whether the country is well networked globally. Is it a country that has good friends; is it a country that behaves well in its neighborhood and in the global neighborhood?

In this regard South Africa is a well networked country and member of the UN. We are not a rogue country. We are a country that is a sought out partner in a number of institutions.

Despite its population of 55 million, we always regard ourselves as a country

that punches way above its weight.

We are well positioned as we relate to many countries. We are part of the BRICS countries with very big economies which have been willing to accommodate us as part of their club.

We also participate in meetings of the G20 and many countries around the world are very keen to welcome us.

Apart from the United States, we are the country with the most [diplomatic] missions. We are seen as a good friend: a trusted player who many countries can deal with politically, socially and economically.

We have a number of key companies in the world investing in our market. This has happened over many years of our democracy and some of them were in South Africa even prior to that.

Our reach as a country is quite expansive and we have a great deal to offer from a number of points of views as an investment destination.

In the African continent we are the leading country in as far as attracting investment is concerned.

It is for this reason that we say South Africa should be seen as a gateway in terms of investing on the African continent.

Our connectedness to various other markets on the African continent continues to grow and expand.

Through us a number of companies have been able to reach out to various markets on the continent and it’s for this reason that we say come and invest in South Africa.

We are a safe, trusted, dependable and predictable market that you can invest in.

We welcome you to South Africa.


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