SA plans to grow ties with Land of the Rising Sun
President Cyril Ramaphosa is looking to get a share of Japan’s $30bn pledged investment into the continent.
Ramaphosa on Thursday called on Japanese companies to invest in SA while delivering the keynote address at the Japan-Africa Public Private Economic Forum held at the Sandton Convention Centre.
In recent years, Africa’s relationship with Japan has strengthened, with Japanese foreign direct investment (FDI) quadrupling in the past 10 years.
In 2016, Prime Minister Shinzo Abe announced that Japan would invest $30bn in Africa over a three-year period.
"We have a compelling case for investment in SA.
"Our country has stable institutions, a thriving democracy and an independent judiciary that is active and at times rules against the government," Ramaphosa said.
Japan is one of the top 10 investors in SA, with more than 240 Japanese companies operating in SACyril Ramaphosa
With business and government executives from Japan and Africa present, the aim of the forum is to foster private sector-led economic growth. It is the first time the forum has been held on African soil.
Since 2008, SA’s FDI has fallen from 24% of GDP to 19%. The goal is to reach 30%, which would be in line with the National Development Plan. "As a country, we will not be able to grow our own economy and reduce unemployment without a massive increase in domestic and foreign investment," he said.
Ramaphosa said Japan was one of the top 10 investors in SA, with more than 240 Japanese companies operating in SA.
The president said that the government could not grow the economy alone and in order to tackle the challenges that SA faced, it was imper- ative that business and government collaborated.
"We cannot expand trade and investment unless our respective governments, state-owned enterprises and other public institutions are aligned with the private sector," he said.
Ramaphosa said that while the government had successfully attracted investment in the manufacturing sector with the introduction of the special economic zones, the finalisation of the Mining Charter would remove further barriers for investors coming to SA. "We want to remove every blockage that anyone who wants to invest in SA will ever find."
Part of the added value from Japanese companies was to bring technology to the African continent, expertise and best practice to take advantage of plentiful resources, he said.
In 2017, Africa’s exports to Asia were worth about $64bn with Japan comprising $8.3bn of that. Ramaphosa warned that the current basket was commodity-based, which exposed African countries to price volatility. "African countries need to diversify and shift to intermediate and final manufacturing programmes," he said.
Africa is the second-fastest growing region in the world, with regional growth predicted to reach 4.3% in 2018 — up from 3.4% in 2017, and 2.2% in 2016.
"This upward trend was driven by increasing FDI flows, public investment in infrastructure and higher agricultural production," Ramaphosa said.