The last time I checked, the UK remained the largest foreign direct investor in South Africa according to the SA Reserve Bank statistics. The FDI assets (stocks) held by UK companies in South Africa were 45,6% of the total SA FDI liabilities in 2014.
The Brits remain our key trading partner even as we find new friends. It’s a fact we should never lose sight of. You don’t ditch old friends when you find new ones.
This strategic relationship with the UK is something the Brits themselves appreciate. Recently, their Minister of State for Trade Policy Greg Hands wrote in one of our national business publications: “UK businesses are already recognising SA as a great place to do business. SA’s bilateral trade with the UK was worth £8.8billion in 2016 – a 9.2% increase on the previous year.”
He confirmed that the “UK remains SA’s biggest long-term foreign investor, with 45% of SA’s FDI stock originating from the UK. And there are many South African companies active and present in the UK, growing their businesses and sustaining jobs in SA.”
I am pleased that President Cyril Ramaphosa is acutely aware of this fact. His first international visit on a trade mission was to the UK last week when he attended the Commonwealth Heads of Government Meeting in London. He used the occasion to have a bilateral with Prime Minister Theresa May during which he affirmed our strategic trading relations with her country.
Ramaphosa was duly rewarded with a deal of £50m (R857m) new UK funding across the next four years to help South Africa improve its business environment to make it more attractive to investors. The endgame is to ultimately lift some of the poorest people in South Africa out of poverty by creating jobs and opportunities.
This came in the very same week Ramaphosa had appointed four highly capable South Africans – former Finance Minister Trevor Manuel, former Deputy Finance Minister Mcebisi Jonas, former Standard Bank Chief executive Jacko Maree and Astrapak Chairperson Phumzile Langeni – as special envoys to hunt the globe for investments that would boost our economy. He has proven that he himself is prepared to put his shoulder to the wheel and lead by example.
Following nearly a decade during which our economy was spectacularly mismanaged, Ramaphosa inspires hope. He understands the complexities of investment and what it takes to build a country’s investment pitch book. The challenge is for all of us, citizens and social partners alike, to rally behind him and the ambitious initiative to attract R1.2 trillion of investment in the next five years.
We have scored enough own goals in the past ten years – from outsourcing executive functions such as the appointment of ministers to the use of state-owned entities as the piggy bank of some individuals – and we now have an opportunity to bounce back.
Ratings agency Moody’s has agreed to keep our country’s sovereign debt at above investment grade and changed our outlook to stable. This is in recognition of the sterling work Ramaphosa’s administration has done in a short period of time. Our state-owned entities are being fixed as boards and senior management of state companies beset by governance and financial woes are being replaced.
Key institutions like the National Prosecuting Authority, the South African Revenue Service and the State Security Agency are on the mend and there is a general sense of recovery from the mess of the recent past. All this bodes well for our country.
It is also encouraging to see the reaction of local business to President Ramaphosa’s plan. Chief Executive of Business Leadership South Africa Bonang Mohale said business would heed Ramaphosa’s call to “chart a new path” for the economy. He said business was willing to act as a “capable partner in helping to set the country on a new sustainable course towards inclusive growth”.
This is quite significant, given the frosty relationship that existed between government and business in the recent past. The operative words, for me, in busines's reaction is “inclusive growth”. The benefits of the new dawn must affect ordinary citizens. If the economic dividends are not shared with the poor, Ramaphosa’s efforts would have amounted to nought. In fact, business, as the “capable partner” would have failed him.
We need to see local business demonstrating confidence in our own economy by investing in it and creating jobs, thus dispelling the notion that it had embarked on an investment boycott of sorts.
I was equally encouraged to spot labour’s leaders – such as Sdumo Dlamini and Dennis George – at the press conference where Ramaphosa announced the investment initiative. This suggested that the plan has labour’s blessing as a key social partner.
Our country has so many positive economic growth attributes that it is difficult to believe we cannot succeed in achieving the goals Ramaphosa has set before us. We have a treasure trove of mineral resources, a resilient people and a multi-talented and multi-ethnic (as seen in Ramaphosa’s investment envoys) group of capable individuals at the helm of our economy. Let’s up our game. And we can.
PASTOR RAY McCAULEY IS THE PRESIDENT OF RHEMA FAMILY CHURCHES AND CO-CHAIRPERSON OF THE