BUSINESS NEWS - Against the background of a globally-bleak economic outlook, the continued impact of the Covid-19 pandemic, and a sharp drop in foreign direct investment (FDI), South Africa will next week forge ahead with its third annual two-day SA investment conference (SAIC).
The conference will happen at the Sandton Convention Centre on 17 to 18 November.
Trade, Industry and Competition Minister Ebrahim Patel on Monday stressed that while the country would welcome new commitments in pledges by local and foreign investors, much focus would be on assessing the impact of the R664 billion in boosting the local economy.
Growth potential and blockages in the digital economy, agriculture, energy, and tourism, are among areas to form part of high-level panel discussions, with social partners – business and labour – participating.
Addressing a media briefing in Pretoria ahead of the event, which has in the last two years drawn a huge number of local and foreign investors, Patel said the conference would provide “an opportunity to assess what progress we have made in getting the R664 billion from an idea in the mind of an investor to the point when bricks and mortar are hitting the ground, factories being erected”.
“It is when mining shafts are being sunk and when goods and services are being bought, can we say progress is being made,” added Patel.
He said when President Cyril Ramaphosa launched the SAIC in 2018, he set a target of R1.2 trillion in fresh investments and commitments over a five-year period.
“President Ramaphosa wanted the gathering to form part of stimulating economic growth and achieving greater levels of job creation, with him focusing of creating an environment attractive investment,” Patel said.
Ramaphosa, said Patel, would elaborate on the R170 billion, which was “already flowing through the pipeline, with our intention being to deepen that level of flow”.
Due to the impact of Covid-19 on world economies, South Africa is “dealing with a tough economic context than a year ago”.
Patel said “The United Nations world investment report for 2020, has recognised investment across the world – not just South Africa – as going sharply down, expecting a drop of about 40% in FDI flows.
“The report projects that by next year, we will continue to see a decrease in FDI flows – only expecting a recovery by 2022, depending on the duration of the Covid-19 crisis and effectiveness of policy.
“Our intention in South Africa is to showcase new possibilities and opportunities at the conference.”
He said the African Free Trade Area Agreement was among several selling points for the continent to share with potential investors.
“The continental agreement is an ambitious reform package that has been put together. It envisages as many as 1.2 billion consumers in Africa being connected through a continental free trade area, with significant manufacturing opportunities.
“Due to this agreement, the World Bank has estimated that by 2035, this would annually be adding something in the order of R7 trillion in the GDP 9gross domestic product) of African countries.
“We have to realise that small markets mean a small production run, producing for the tiny markets, with a high cost structure. The advantage of Asian, European and North American producers is that they have these massive markets.
“We are now trying to replicate scale to bring investors to the continent,” explained Patel.
Presidential economic advisor Trudi Makhaya said attendance to the SAIC would be scaled down in line with Covid-19 regulations, with the first day being conducted virtually and delegates attending the plenary being reduced to below 50%.