Investors are more excited about SA now, under the leadership of President Cyril Ramaphosa, than they were a year ago, according to the International Finance Corporation (IFC).

“There’s a huge difference between last year and this year. Investors probably wouldn’t have thought very hard about SA before and now they are — they’re very impressed,” IFC country manager Saleem Karimjee told Business Day last week.

The goal for the IFC, which is part of the World Bank Group and headquartered in Washington DC, is to promote development in the private sector by convincing companies to invest in markets in different stages of development. The IFC provides solutions and structures that help mitigate any perceived risks.

Ramaphosa was elected as president of the ANC in December last year and took over as president of the country in February, following Jacob Zuma’s resignation.

Business and consumer confidence soared with the news while markets rallied in support. Since then, confidence has slumped once again and SA has fallen into a recession for the first time since the global financial crisis.

The medium-term budget policy statement also painted a bleak picture of the country’s finances, which attracted the attention of credit-ratings agencies. Moody's said it was a credit negative. 

Despite this, the IFC said the president had been very clear about his stance on policy issues, such as the mining charter and land reform, which has started to lower uncertainty.

“Something I hear every day is that investors hate uncertainty, but what is being said and what is being done is getting people much more comfortable. For a while, investors were asking themselves what the future is going to look like,” said Karimjee.

“We have a five-year record in SA in terms of investment, with around $450m invested into companies in the country. We’re not scared,” said Karimjee.

The IFC’s comments come on the coattails of an investment conference where Ramaphosa announced that SA would receive a surge in investment of more than R290bn over the next five years. This is expected to have a significant impact on his $100bn investment drive announced in April.

IFC vice-president for the Middle East and Africa Sergio Pimenta said investors were paying close attention to the long-term trends.

He explained that the performance of the economy quarter to quarter was affected by the past but that investors ought to be optimistic that the change in policies will have a meaningful impact.

“The impact of change is not immediate. You can’t change the overall economy of a country the size of SA in a quarter, it’s not going to happen that quickly. You really have to have this more long-term approach and the measures the government have taken show that the direction is good,” he said.