EXCLUSIVE: How Cyril Ramaphosa plans to translate political freedom into economic wellbeing
In this article originally published in the Financial Times, the president explains why he believes that SA can triumph again
In the early 1990s, when South Africans from across the political spectrum met to negotiate an end to apartheid, many observers were sceptical about the chances of success. Yet we did the unthinkable, and took the country from the brink of civil war through a peaceful transition.
Although apartheid ended more than two decades ago, its effects remain evident in the social and economic structure of SA. An effort is required, therefore, to generate economic growth, address shortcomings in infrastructure, stabilise the public finances, accelerate employment and generally ensure that all South Africans reap the benefits of prosperity.
A conference in Johannesburg this week will highlight the many investment opportunities in SA. It is part of a drive by the government to mobilise $100bn in new investment over the next five years.
We are also establishing an infrastructure fund, as part of an economic stimulus and recovery plan, which will prioritise roads, water infrastructure, schools and public transport. Additional resources from development finance institutions, multilateral development banks and private lenders and investors will be leveraged through this fund.
In adopting an investment-friendly approach, the South African government has chosen to focus on addressing structural weaknesses in the economy. It aims to rebuild investor confidence, restore good governance in public institutions and create a supportive environment for investment.
Several important milestones have already been passed. We have implemented a review of the visa regime to attract more tourists and skilled workers, while the management of key state-owned enterprises has been overhauled to ensure accountability.
It is an important sign of confidence in this strategy that international investors continue to commit long-term capital to SA. With favourable demographics, high productivity potential and its position as a springboard into the rest of Africa, it is an attractive destination for investment. SA offers the stability of a well-regulated economy, an effective legal environment, cost competitiveness and reliable infrastructure.
Its domestic capital markets play a pivotal role in allocating both domestic and foreign savings towards South African investment requirements, and the banking system ranks among the best and most sophisticated in the world.
In the resources sector, lucrative investment opportunities exist in oil and gas exploration, the ocean economy and renewable energy. The South African government is working to provide policy certainty and to revitalise the mining and related sectors with a new mining charter.
The renewable energy sector attracted $6bn of investment between 2010 and 2016 through an independent power producer programme, with great potential for further expansion. SA enjoys on average 300 days of sunshine a year and offers abundant opportunities for wind farm projects, making renewable energy schemes an obvious and cost-effective addition to the energy mix. The UK Prime Minister Theresa May recently pledged to provide more than £56m for battery storage technologies in SA.
We are modernising our agricultural sector, which not only has huge job creation potential, but offers an opportunity for more South Africans to participate in the productive economy. As part of this work, an advisory panel has been established to guide the implementation of a fair and equitable land reform process that redresses injustices of the past, increases agricultural output and protects food security.
Leveraging private capital to accelerate the building of productive and profitable infrastructure to further facilitate inclusive economic growth also provides opportunities for international investors. An infrastructure implementation team, which will include skilled individuals from the private sector, is being set up to oversee projects.
Private sector investment in competitive industries provides long-term capital and contributes to the transformation of the economy. In recognition of that, the government has undertaken a number of administrative reforms intended to reduce obstacles to investment and make it easier to do business.
One-stop shops offering all the government services required by prospective investors are opening across the country. These provide streamlined registration, administrative and authorisation processes to help businesses get off the ground quickly. We have also begun a review of electricity, port and rail tariffs in order to reduce the cost of doing business and make South African products competitive.
As SA celebrates the centenary of the birth of its first democratic president, Nelson Mandela, it is worth remembering the obstacles the country overcame through active leadership and genuine partnership. As we seek to translate political freedom into economic wellbeing, we have every reason to believe that it can happen again.
• This article was first published by the Financial Times