Ramaphosa makes it rain as he secures $14.7-billion from China

24 July 2018 - 16:17 By Zingisa Mvumvu
South Africa's President Cyril Ramaphosa and China's President Xi Jinping at the Union Buildings in Pretoria on July 24, 2018.
South Africa's President Cyril Ramaphosa and China's President Xi Jinping at the Union Buildings in Pretoria on July 24, 2018.
Image: Kopano Tlape/GCIS

President Cyril Ramaphosa has secured close to $35-billion worth of investment for South Africa in July alone.

This after Ramaphosa on Monday sealed $14.7-billion worth of investment commitment from China during a state visit to the Union Buildings by the Asian economic powerhouse.

Ramaphosa said the commitment‚ along with several agreements and memorandums of understanding that were signed between the two countries‚ would "deepen" the 20-year old trade relations between SA and China.

"We have signed several agreements that are intended to further deepen relations‚ including investment commitments that have been struck to the value of $14.7-billion‚” said Ramaphosa after a meeting with his Chinese counterpart‚ Xi Jinping.

"President Xi has indicated that China is ready to invest and to work with South Africa in various sectors such as infrastructure‚ the ocean economy‚ the green economy‚ science and technology‚ agriculture‚ the environment as well as finance."

The investment commitment comes barely two weeks after Ramaphosa secured back-to-back $10-million investments with Saudi Arabia and United Arab Emirates respectively.

The latest investment deal with China takes Ramaphosa closer to his target of $100-billion worth of investment within his first year in the presidential seat.

Among other agreements reached during the China state visit include simplification of visa requirements‚ a joint declaration of international development cooperation and a $2.5-billion loan to Eskom by the China Development Bank.

Eskom chief executive Phakamani Hadebe said the loan would boost the power utility's funding to 62% for the current financial year.

Hadebe said the loan was a "normal commercial loan" which is guaranteed by the South African government.

Xi sang praises of his meeting with Ramaphosa and emphasised a need for the two countries to continue working together on trade and political issues given the long standing relations between the two countries‚ which were "normalised" by former president Nelson Mandela.

"This is a new historical departure point and we have had productive discussions with president Ramaphosa on taking forward our strategic partnerships‚" he said.

Meanwhile‚ minister of trade and industries‚ Rob Davies‚ said that South Africa was giving more than it got in its investment partnerships with Brics countries - and this had to change.

Davies was speaking to media on the sidelines of the China visit to the Union Buildings.

He revealed that the inward quantum investment to South Africa by Brics countries between 2003 and 2017 was a mere $18-billion. This was in sharp contrast to the $60-billion outward investment by South Africa to Brics countries.

"So we are investing more‚ and that has led to me arguing in the Brics business forum that we need to be supporting investment-led trade instead of trade and investment‚" said Davies.

"The importance of that is if we develop productive forces we can become more significant manufacturers‚ which will enable us to create conditions for a more sustainable‚ long-term and expanding trade relationship. That‚ rather than simply trying to push trade on the existing paths‚” he added.

Davies also decried the ongoing trade wars between the United States and China‚ saying they were hurting SA badly.

Because of these trade wars‚ said Davies‚ South Africa had become "US collateral damage”.

He explained: "We are not the main target of the trade wars but we have become collateral damage and that has already impacted on us in the imposition of the steel and aluminium tariffs.

"We are very much aware of the intended outcome and objective of the war. The objective is to try to rebalance the global trading system in the interest of one party‚ not the greater good of the world as a whole.

"We are not going to make any concessions in things like changing the classifications of developing‚ developed and least developing countries when it came to multilateral trade obligations for the simple reasons that as developing economies we need access to the same policy tools developed economies have access to. This matter is of concern."

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