South Africa intends to expand the presence of US companies through its renewed investment drive and is currently working to improve the business environment towards that goal, President Cyril Ramaphosa has said. The president says there are over 800 US companies doing business in South Africa.
In a speech to a business seminar on South Africa held on the sidelines of the United Nations General Assembly in New York, Ramaphosa said the significant new investment was necessary to grow the economy and create jobs on a scale that would slash unemployment, currently close to 28% of the labour force.
“Foreign direct investment (FDI) is critical to this effort, because it strengthens productive capacity through transfer of technology and knowledge, the creation of job opportunities, improvements in human capital and enhanced production processes,” he said.
Ramaphosa informed delegates that South Africa has a major milestone – an initiative to raise $100 billion in new investment over five years was a conference planned for October 26 which would provide a platform to seek out opportunities in the local market. For along time US companies have been successful in South Africa. South Africa is the second largest destination of American investments in sub-Saharan Africa after Mauritius.
Total bilateral investment, comprising FDI, portfolio and other investments, stood at approximately R2.2 trillion in 2016, while investments by US companies into South Africa accounted for about 22% of total inward investments from the world.
“There are over 800 US companies doing business in South Africa, accounting for 10% of GDP and employing over 220,000 people,” Ramaphosa said.
Through this investment drive, the presence of US companies in South Africa can expand rapidly. The government is working to improve on the economy which slipped into a recession in the second quarter of the year.
South Africa still has an investment-grade rating with Moody’s, but peers Fitch and S&P Global have downgraded it to “junk” over concerns about its fiscal policy direction.
Ramaphosa said South Africa’s independent power producers programme had unlocked significant investment in the renewable energy generation while contributing to a more diverse energy mix and advancing its efforts to mitigate climate change.
“We are also working closely with our neighbours in Southern Africa on regional opportunities to exploit natural gas, coal bed methane, and shale gas,” he said.
South Africa’s proposed new mining charter would provide clarity on how to balance the imperatives of growth, sustainability, and transformation, Ramaphosa added.
-ANA
