Government’s key reforms will likely deliver better growth by the end of 2019, Standard Bank’s Chief Executive of Corporate and Investment Banking, Kenny Fihla remarked at the opening of the 6th annual South Africa Tomorrow Investor Conference in New York.
“I’m prepared to stick my neck out and say that growth will accelerate by about a percentage point by the end of next year. The effects of better governance and more efficient public spending could well add another percentage point by the end of 2020.” Fihla said, addressing an audience of international and domestic investors.
He reminded delegates of his message to investors last year advising them at the time to ‘buy now while South African assets are cheap’. This year, he repeated that message – but with a warning: ‘Be quick: they won’t be cheap for much longer.’
Less than a year into the new administration, Fihla said, the new political leadership had made solid progress in cleaning up government and improving the investment climate.
“The new administration has been equally energetic in repairing relations with organised business and organised labour, he said. “There have been joint efforts to tackle barriers to investment and develop sectors with growth potential such as mining, information and communications technology and tourism.
This is evidenced by the much anticipated Investment Conference held just a few days ago in Johannesburg, convened by President Ramaphosa to reposition the country and the economy where 1,000 investors were present. The goal at the outset of President Ramaphosa’s investment drive was to raise $100 billion and following the Investment Conference, South Africa has passed the halfway mark after just six months. There, he announced nearly $20 billion in investments from 21 companies. This is in addition to a further $35 billion (ZAR 500 billion) in pledges which have been negotiated by the President’s investment envoys over the last few months.
Fihla commented: “We know that investors buy into growth stories and the amount invested demonstrates that South Africa’s economy is now on a positive trajectory and of significant ongoing interest to the international investment community.”
Fihla acknowledged that there were policy and administrative hangovers that South Africa needed to deal with that include several state-owned enterprises which remain in very poor financial health.
However, he was reassuring on South Africa’s land reform process and remained confident that Constitutional law and democratic due process would be observed.
“Far from being a source of anxiety to investors, we should be reassured that South Africa is finally on track to develop an approach to land reform addresses the concerns of those who own land and those that are landless to enable the country to move forward as a more inclusive society,” Fihla commented.
He noted a number of government’s achievements including the comprehensive judicial commission of enquiry into ‘state capture’ at the Zondo Commission; and the fact that the unaffordable nuclear deal has been taken off the table. Fihla also pointed to the commitment to a large-scale renewables programme as a positive signal to potential investors.
The far-reaching changes to the boards and senior management of the country’s critical state-owned enterprises, by bringing in rigorous oversight and appropriately qualified management was also welcomed by the business sector.Back to all news
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