Ramaphosa on drive to lure investors to Africa

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Colleta Dewa

 

Johannesburg - South Africa's President Cyril Ramaphosa has said the African continent is the best and open place for investment.

 

He was addressing investors during the Financial Times Africa Summit in London on Monday, adding that those who have been watching developments in Africa over recent years would have seen the emergence of a common vision for peace, growth and development.

 

"The message we bring here today is that Africa is ready for the great leap frog on many fronts, including in attracting investment, displaying its innovative talent and capability and catapulting itself to greater heights of human development.

"Africa is ready to partner with investors and the private sector because it’s been proven many times over and in numerous countries that discerning investors who have the foresight to invest in Africa can earn good returns. We have reached a moment in our history where Africa needs investment more than it needs foreign aid," said Ramaphosa.

He added that although the continent had challenges with weak implementation and corruption, the continental free trade area would bring together 54 nations, their 1.2 billion people and their combined GDP of $3 trillion.

"This year’s summit comes as we begin the countdown to the launch of the African Continental Free Trade Area (AfCFTA).  It will bring together into a single market 54 nations of some 1.2 billion people and a combined GDP of over $3 trillion. Just as the signing of the Maastricht Treaty in 1992 represented a new era of European cooperation and integration, the African Continental Free Trade Area is the realisation of the dream of the founders of the Organisation of African Unity 56 years ago.

“As we meet here to discuss the potential for scaling up investment and trade with and within the African continent, we do so with an appreciation that we are on the cusp of a new era," added Ramaphosa.

Ramaphosa also said millions still didn't have access to proper health care or education in Africa but the continent was determined to seize this investment moment.

“Africa is the continent with the youngest population in the world, which is expected to have a working-age population of 1.8 billion by 2035; it is a rapidly urbanising continent. By 2030, Africa will host more than 41 megacities with more than 10 million inhabitants each.”

He said South Africa was positioning itself get a share of the 20 million jobs that must be created by the continent every year over the next two decades.

“We have taken steps to provide greater policy certainty in areas such as mining, oil and gas and telecommunications as part of efforts to create a stable environment for investment. Across Africa, countries are enacting reforms to improve business confidence. Public institutions are being reformed and laws around corruption and bribery are being strengthened. 

"Because of these cumulative reforms, five of the ten most improved countries in this year’s World Bank Ease of Doing Business Index are from Africa. This should bolster and increase investor confidence.  Between 2017 and 2018 global foreign direct investment to Africa rose by 11% at a time when global FDI flows fell by 13%. According to the IMF, of the world’s 10 fastest growing economies, six are in Africa.  These countries are industrialising, diversifying and attracting new investment."

Ramaphosa also said African leaders were working together to end interference, especially from countries that fuel conflict on the continent.

"Africa’s success will lie in collaboration, in cooperation and in partnerships for mutual benefit. It also depends on African countries working to advance the interests of their people, seeking African solutions to African problems. Africa wants to deal with the rest of the world on its own terms. It wants to see an end to outside interference, particularly from those countries that continue to fuel conflict in African countries. The continent cannot develop fully for as long as parts of Africa remain theatres of war to advance the interests of powers beyond our shores," said Ramaphosa.

He congratulated Ethiopia’s Prime Minister Abey Ahmed for winning the Nobel Peace Prize last week, saying he silenced guns and focused instead on economic cooperation and growth in his country.

"This award is a worthy recognition of the work of Prime Minister Abiy in forging peace between Ethiopia and Eritrea.  But this award is much bigger, in that it is a major boost for the project of silencing the guns on our continent and installing the peace that will enable us as a continent to achieve our bold ambitions.

"The new generation of leaders of Ahmed Abiy’s ilk are bold, courageous and are focused on creating an Africa that is at peace with itself and growing the economies of African countries through innovation, infrastructure development and trade," he also said.

Ramaphosa said African transformation and development would no longer be on terms imposed by others.

Turning to South Africa, Ramaphosa said his government recognises that to grow the economy, create jobs and support investment there is need to pursue prudent fiscal policies coupled with sound macroeconomic management.

He said  a time when SA's fiscus is under great pressure, they are committed to ensuring debt sustainability, improving the composition of spending and reducing risks arising from contingent liabilities, especially of state-owned enterprises.

He said one of the greatest challenges to the economy is the dire state of the electricity utility, Eskom, which has huge debt, severe liquidity problems and extensive operational challenges adding that they have embarked on a process to strengthen governance, cut costs, improve revenue collection and increase energy availability and plant performance

 

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