Finance Minister Enoch Godongwana at a panel session of the 54th Annual Meeting of the World Economic Forum in Davos, Switzerland. Photo: World Economic Forum
Finance Minister Enoch Godongwana is happy that South Africa’s delegation to the World Economic Forum (WEF) 2024 Annual Meeting used the platform to drive home the message that the country was a top destination for growth and investment.
Godongwana led a delegation of government ministers, business executives, entrepreneurs and civil society leaders to the 54th WEF Annual Meeting in Davos, Switzerland, last week.
Godongwana yesterday said that South Africa’s participation in global forums such as WEF Davos reinforced their belief in the value of multilateralism and the spirit of cooperation, as a critical part of an overall strategy to lift economic growth.
He added that countries stood to benefit from the common pursuit of a fairer, more inclusive and representative global system.
TeamSA tackled questions on the progress the country is making in economic reforms, particularly in areas of energy, transport and logistics, and in fighting crime.
“We took the opportunity of the WEF Davos gathering to remind our partners around the world that South Africa has made tremendous progress in the past 30 years since we achieved democracy,” Godongwana said.
“Yes, we face a number of obstacles to achieving policy that balances fiscal sustainability, growth-accelerating reforms, and targeted spending on social services and infrastructure. We are forging ahead and making good progress.”
The overall WEF 2024 theme, Rebuilding Trust, underlined South Africa’s continued role as a regional and global leader in the international community.
The Annual WEF meeting offered South Africa’s policymakers an opportunity to speak directly with a cross spectrum of stakeholders in global affairs, exchanging views on how to weather the rise in geopolitical and economic tensions that are shaping today’s world.
Business Leadership South Africa (BLSA) said yesterday that the WEF provided an opportunity for reflection on the global context.
BLSA CEO Busi Mavuso said she hoped the country took from it the need to stay committed to reform and to show that it was serious about making steady progress, because that was the way to rise above the extreme risks that the world was grappling with.
“We must also show that electricity is not a once-off – the logistics sector is the next front for reforms to turn around the dismal performance of our port and rail infrastructure that is directly constraining economic output,” Mavuso said.
“We must also show we are serious about reforms to other constraints on business like access to visas. There is no good (in) going into a global forum telling investors they can come and invest their billions but expect to wait six months for their visas to be processed. They look at the country holistically – the opportunities are there, but they may not be enough if we don’t resolve the frictions they face.”
Old Mutual Wealth investment strategist Izak Odendaal, however, said while Godongwana and company emphasised recent economic reforms, sceptical investors would point out that the changes had yet to arrest a long-term deterioration in competitiveness.
Odendaal said that if South Africa could reduce the risks to the economy and increase the potential return for investors, then the money should start flowing.
“The risks can primarily be reduced through reducing the regulatory burden and increasing regulatory certainty, lowering the cost of doing business and getting a grip on organised crime. Macroeconomic stability – manageable levels of government debt, low and stable inflation and a less volatile exchange rate – is also important.
“The problem in South Africa is that infrastructure has tended to be monopolised by the state... This is changing. Government’s policy is shifting, belatedly and out of necessity, towards private participation. ‘Privatisation’ is still a swear word in some circles, but in practice there is little difference between selling an asset and granting a 25-year concession to upgrade and run it.
“To be clear, the private sector cannot solve all infrastructural challenges. It will only invest in infrastructure where there is a return to be made. This means tolled highways, ports, railways, power plants, airports, and so on, but not rural or suburban roads for instance. For the latter, we will still need to rely on government, particularly local government.”
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