Picture: GCIS – President Cyril Ramaphosa addresses delegates at the 4th South Africa Investment Conference.
By Thoko Modise
In the wake of the covid-19 pandemic, many economies around the world are slowly recovering to pre-pandemic levels, despite the Russia-Ukraine war causing energy and food prices to surge, threatening to peg back global economic recovery.
The South African economy did not escape taking a hit from the pandemic, but it is on the road to recovery as one of the most attractive investment destinations in Africa. Our country was Africa’s largest recipient of foreign direct investment (FDI) last year, netting $41 billion after receiving $3 billion in 2020 at the height of the pandemic.
The government has made it a top priority to retain this top spot and the strength of our economy, which enables investors to generate sustainable long-term returns while creating employment for its citizens.
On October 6, the 6th Nation Brand Forum will be held in Johannesburg where the country’s plans to attract investment and grow the economy will take centre stage.
The main purpose of the event is to encourage stakeholders representing business, government, media, and civil society to collaborate to boost our economy’s competitiveness and position South Africa favourably as an investment destination.
South Africa has for a long time established itself as a significant entry point for multinationals looking to expand their footprints across Africa to take advantage of the African Continental Free Trade Area (AfCFTA). The Agreement, which was signed by most member states of the African Union, was established to eliminate import tariffs and give African-domiciled companies preferential access to a continent-wide market of over 1 billion people with a combined gross domestic product (GDP) of over $2 trillion.
Furthermore, South Africa is an ideal location for companies seeking to explore its vast mineral resources, and utilise its world-class transport infrastructure, and skilled workforce to export to global markets. These attributes give South Africa a great competitive edge as an exports-oriented country, relative to many of its emerging market peers.
For investors looking at South Africa’s attributes as a middle-income, developing economy, find its vast consumer base with a growing middle class appealing.
After the pandemic pushed South Africa into a recession in 2020, the South African economy rebounded in 2021, growing by 4.9 percent. This year, the economy has continued to stay on an upward trajectory.
The economy expanded by 1.9 percent in the first quarter of 2022, sustaining the growth it achieved last year to a point where the economy is now slightly bigger than what it was before the Covid-19 pandemic hit our shores in early 2020.
This turnaround in economic performance was achieved on the back of firm implementation of structural reforms and an economic recovery plan.
In June this year, Bloom Consulting published findings from the Global Reputation Study which showed that South Africa was a competitive and attractive destination to do business, invest, study and visit.
The study, which surveyed and rated the perceptions of 10,000 participants comprising investors and travellers from 13 countries, shed light on how investors perceive South Africa as not only an investment destination but also attractive for tourism and studying.
The study found that trade, tourism, and studying were South Africa’s strongest attributes with up to 70 percent of respondents indicating their willingness to visit do business in our country or study here.
That South Africa is an attractive investment destination was recently highlighted in President Cyril Ramaphosa’s weekly Newsletter as published on 20 September 2022, where he stated that a total of 10 projects worth R15.3 billion had been completed or launched since the country hosted the fourth Investment Conference in March this year 2022.
These projects, comprising greenfield and brownfield investments, were spearheaded by local companies and foreign multinationals including Ford, Anglo American, Metair Investments, Corobrik, Consol Glass, Isuzu, Sappi, Google, Netflix, Sandvik and many others who continue to believe in South Africa..
South Africa has also recently enjoyed FDI inflows from major industrialised economies like the United States, Sweden, Japan, United Kingdom, Ireland, Germany, and China.
This influx of FDI indicates that the structural reforms and the economic recovery plan that the government is implementing are bearing fruit in removing investment bottlenecks and stimulating the economy.
The engagements that will take place at this year’s forum will illuminate how stakeholders can forge partnerships to grow the economy and attract increased investment to South Africa.
We have plenty to offer as a country as one of the most industrially diversified economies in Africa, but we all need to pull together to help South Africa thrive through partnerships that will ensure sustainable growth. There is no grey area for us as citizens, we have a responsibility to our country’s citizens to grow our economy. I look forward to the constructive and fruitful discussions with key decision-makers at the Forum this year.
Modise is the Acting Chief Marketing Officer at Brand South Africa