Is raising $100 billion possible?

Source: SA Good News, 31/07/2018

Leaders of the BRICS nations gathered in South Africa last week for
the 10th summit of the grouping that accounts for more 17% of global
trade, Chairman of the Industrial Development Corporation (IDC) Board,
Ms Busi Mabuza reflects on the importance of the event and its role in
the country’s ambitious drive to secure investment of $100-billion
over five years.
Our complicated background
In South Africa we are inclined to think of ourselves as entirely
unique in terms of our history of struggle and the continuing
challenges we face nearly a quarter a century after we attained our
political freedom. As we mark in 2018, the centenary of the birth of
Nelson Mandela, we can surely be forgiven for pausing to celebrate
with pride at least a few of our characteristics that make us uniquely
South African.
Are we different?
This sense of being different has become more acute in recent years as
the trajectory of our democratic politics has put our democratic
institutions to the test. And yet, South Africa’s institutions of
governance remain robust and continue to advance the fundamental
interests of human development, freedom, transparency and democracy.
We continue to defy those who have predicted imminent catastrophe for
more than two decades now.
Global challenges
On the other hand, the steady erosion of the post-second world war
global consensus, the rise of populism, anti-migration sentiment and a
trade war among developed economies provides for a different
perspective on our South African challenges. Our people still see the
best as yet to come while others mourn for their past.
BRICS nations on different trajectory
In fact, the BRICS nations as a group continue to move in a different
direction to much of the developed world, particularly with respect to
trade and investment. Intra-BRICS trade, for example, has more than
doubled from ZAR204-billion in 2010 to ZAR462-billion in 2017.
SA Investment target $ 100 billion
The centre piece of this drive is President Cyril Ramaphosa’s target
of $100-billion in new investment over five years. The President will
emphasise to our BRICS partners and other heads of state that South
Africa’s investment proposition for foreign investors remains a
powerful one.
Special envoys
He has put in place a team of Special Envoys on Investment, who are
setting about meeting with significant businesses and leaders from all
over the world to promote investment towards meeting the $100-billion
objective.
The Role of the dti â€` Invest SA
In practical terms, South Africa’s Department of Trade and Industry
(the dti) is leading efforts to create an enabling environment for
investment and trade. The department has established a relatively new
entity, Invest SA, as one-stop facility to assist potential investors
with the procedures required to meet regulatory requirements to grow
the economy and create jobs.
Special Economic Zones
In addition, there is a broad range of incentives for investors and
support services available in the country’s Special Economic Zones.
Beyond the often-shifting tides of global macro-economic fortunes,
South Africa maintains core characteristics that investors can count
on in a more uncertain world.
We have a growing middle class and an affluent consumer base that
underpin excellent returns on investment. South Africa is still
abundantly endowed in precious metals. We are the world’s leading
producer of platinum group metals and the sixth largest producer of
gold with world renowned underground mining expertise.
Even as Africa continues to rise, South Africa is a diversified
African economy with the best manufacturing and leadership as a
services destination.
SA’s Global Presence
For evidence of this status, we can turn to multinationals for whom
South Africa is the location of choice. Global corporates continue to
reap the benefits of doing business in South Africa which has a
supportive ecosystem as a hub for innovation, technology and fintech.
In terms of a key aspect of investor interest and concerns, South
Africa remains number one in Africa and highly rated globally for a
regulatory framework and judicial system that protects investors. The
country’s commercial and legal practices are in line with those in the
rest of the developed world.
Indeed, we are already widely known for our sophisticated banking
sector which has a major footprint in African countries. This
underpins our status as the largest financial hub in Africa, with the
JSE the continent’s largest stock exchange by market capitalisation.
Our world-class physical and technology infrastructure is targeted for
ongoing investment and expansion that will enhance levels of investor
comfort in a very practical manner.
African Continental Free Trade Area
The conditions are especially favourable for investors seeking to
benefit from the African Continental Free Trade Area (AfCFTA). The
AfCTFA will boost intra-Africa trade and create a bigger market of
more than billion people on a continent with a GDP of $2.6-trillion.
The keys to unlock industrial development are thus available to
investors seeking long-term opportunities with stable returns.
State Owned Entities â€` any hope?
In terms of state-owned entities, which are of particular concern to
investors, it has been most encouraging to note the significant
progress made in stabilising the governance structures and thus
placing these enterprises on a sound path to recovery. The South
Africa government’s commitment to the efficient management and optimal
performance of its state-owned entities is demonstrated through the
various initiatives aimed at strengthening governance models and
improving compliance to ensure adhere to the principles and practices
of good governance as envisaged in the public finance management acts.
SA’s Open Budget
The Open Budget Index, an index that independently rates the
transparency of government budgeting processes, ranked South Africa at
number two out of 102 countries evaluated. This is testimony that as a
nation we are committed to high levels of transparency and a
public-sector governance model that ensures democratic accountability.
In a similar vein, the World Bank Ease of Doing Business Index ranks
South Africa 22nd in the world for investor protection, while Business
Monitor International’s 2017 Trade and Investment Risk Report puts us
at the forefront in terms of comparatively low investment-related
risks in the region.
This means that South Africa’s sound institutional framework, which is
built on the robust foundation of a constitutional democracy,
positions the country favourably as we work to enhance and maintain
business confidence.
SA on the front foot?
Any investor should in my view be pleased by the palpable fresh energy
and renewed optimism among the country’s friendly and inviting people.
We hope investors will be encouraged and reassured by our choice to
live on the front foot, in the certain knowledge that the arc of our
history bends resolutely towards a better life for all.