Team SA celebrates 'positive sentiments' from World Economic Forum in Davos
The South African delegation to the World Economic Forum in Davos‚ Switzerland‚ believes it succeeded in its mission of assuring investors of policy certainty and economic stability in the country.
The high-powered ‘Team South Africa’ led by President Jacob Zuma‚ and which included cabinet ministers‚ the governor of the Reserve Bank and captains of industry‚ delivered a message that South Africa is open for business to global investors and other stakeholders‚ the Presidency said on Saturday.
It wasn’t all smooth sailing for the South African team‚ however. The issue of the recent sudden change of finance ministers was raised by global CEOs and chairs of multinational corporations.
According to the Presidency‚ there was a call for predictability in the context of the finance minister reshuffle which took place at the end of 2015. There were also discussions around the effect it had. Issues relating to policy and the need to see them implemented were also raised.
"The president responded that while governments all over the world are entitled to change ministers‚ South Africa had responded without delay when concern was raised‚ especially given the economic climate‚" Presidency spokesperson Bongani Majola said.
"The meeting in Davos appreciated the swift changes that were made afterwards‚ which resulted in the appointment of Minister Pravin Gordhan as the minister of finance." Zuma faced a backlash in December when he announced that he was replacing Finance Minister Nhlanhla Nene with ANC parliamentary backbencher Des van Rooyen.
The surprise announcement sparked a public outcry‚ with calls for Zuma to be recalled‚ and caused local markets to tank‚ with the rand plummeting to record lows. The huge outcry‚ some of which came from within the ANC’s own ranks‚ forced Zuma to sack Van Rooyen as well and recall former finance minister Pravin Gordhan – all within a mere space of four days.
The South African delegation was upbeat on its return from the economic forum however. Majola said the delegation had “leveraged the presence of international business‚ analysts and politicians in Davos to assure the global community of the country’s commitment to maintaining policy certainty‚ fiscal discipline‚ macro-economic stability and the promotion of inclusive growth and development”.
“South Africa reiterated that the National Development Plan‚ the 9 point plan for economic recovery and Operation Phakisa were being implemented with a view to ensuring economic and social growth and development.
“The current global economic challenges requires South Africa to develop a robust and responsive set of measures to ensure economic stability. The message was advocated by Team South Africa consistently to delegates in Davos‚” Majola said. During the Forum‚ Team South Africa had high level interactions including bilateral discussions‚ he added.
“President Zuma hosted global investors during a session of the Business Interaction Group on South Africa. During this session President Zuma emphasised South Africa’s commitment to policy certainty by announcing the establishment of the Inter-Ministerial Committee on Investments and a one-stop interdepartmental clearing house to facilitate support for investors.
“With particular reference to the theme of Davos 2016‚ ‘Mastering the 4th Industrial Revolution’‚ Team South Africa emphasised the need to create a balance between the use of technology to mechanise and industrialise to move the economy into a knowledge state of human development and job security. “The overwhelming sentiment emanating from Davos was that investors continue to see South Africa as a preferred investment destination.
“In addition‚ many countries around the world are faced with similar challenges of slowing economic growth‚ falling commodity and oil prices. Davos 2016 presented Team South Africa with an opportunity to discuss these challenges‚ global responses and best practices‚” Majola added.
Speaking to the media‚ Minister of Finance Pravin Gordan said: “There was very positive sentiments expressed towards South Africa and the international community continued to see South Africa as a preferred destination.
“The fact the multinationals – amongst others‚ Mercedes Benz‚ BMW‚ Johnston and Johnston‚ Marriot Hotels - continue to invest in the country is indicative of this positive sentiment.”
ICICI Bank of India announced this week it would establish an office in South Africa. Commenting on the forum‚ Trade Minister Rob Davies said: “We’re telling investors that - despite our country’s enormous challenges‚ many due to global shocks – we are resilient.”
It is also significant that according to the Oxford Business Group “foreign investors are often less pessimistic about South Africa than many South African companies are”‚ Majola said. Meanwhile‚ he added‚ the South African delegation remained cognisant of the challenges imposed by industrialisation on development economies.
In this regard‚ Economic Development Minister Ebrahim had observed at the forum that “the 4th Industrial Revolution is challenging our world on how we do things. We now have an opportunity to bring health care services to the people‚ (especially) rural communities using the internet.
"It also presents us with an opportunity for children to access education in a modernised way.”
While communicating that South Africa was open for business‚ Team South Africa also acknowledged the challenging times in which the country found itself.
In this regard‚ the Reserve Bank Governor Lesetja Kganyago‚ speaking to the media in Davos‚ said: “As far as South Africa is concerned‚ our pillars remain our strong macro-economic foundations and a solid monetary policy framework.”
The CEO of the Johannesburg Stock Exchange‚ Ms Nicky Newton-King pointed out that “we have to understand that there is the new normal which is the slow growth‚ highly volatile and uncertain global world. South Africa competes in that global world and we are connected from a financial market perspective.”
Vassi Naidoo‚ Nedbank Group Chairman drew on the best that WEF had to offer by saying that “we are here to network and help bring the relevant thinking from the global world on areas such as business leadership‚ social entrepreneurs for Nedbank and for South Africa… however‚ the reality is we are in a very difficult time from [the] drop in commodity prices‚ oil prices".
The Chairperson of the Industrial Development Corporation‚ Ms Busi Mabuza summed up the challenges of the 4th Industrial Revolution saying it “is the convergence of technology and creativity of people. We need young population that is skilled‚ knowledgeable to use telecommunication and medical technology for the betterment of the people. Our networks for telecommunications should be robust enough to support the implementation of the 4th industrial revolution.”
Speaking at the conclusion of the forum‚ Zuma said: “As Team South Africa departs from snow covered Davos‚ the challenges of the global economic environment coupled with domestic growth imperatives are top of mind. What remains undisputed is that with all sectors working together‚ South Africa can move forward.
“The brand of our country depends of all sectors playing their part for our common developmental agenda. This means business‚ government and labour must keep interacting and talking to ensure that we move together towards inclusive growth and prosperity for our country.
“We must build on the WEF 2016 success by cementing unity in action and stronger partnerships for the good of our country and its people.”