By CEO of Brand South Africa Kingsley Makhubela
South Africa was represented by a multi-stakeholder high level delegation at the World Economic Forum’s Davos meeting from 20-23 January 2016. Coming within the context of projected lowered global economic growth, falling oil and commodity prices, this gathering of international opinion makers and thought leaders presented an opportunity to look at global responses and best practice to a range of pressing social, developmental and economic issues.
South Africa is not insulated from this global economic environment and although we have the most diversified economy in Africa, with a strong macro-economic policy and fiscal environment, the falling commodity prices, amongst others, presents a challenge to our economic growth forecasts.
Our most important message in Davos to international business and investors would have to be that, South Africa is open for business in this environment and that they could be assured of our commitment to policy certainty and consistency.
Amongst others we communicated that:
- Our strong macro-economic framework has shielded the economy from the full brunt of a challenging global economic environment and volatility in global capital markets.
- Government through its fiscal consolidation measures is committed to continued fiscal prudence and preservation of investment grade credit ratings.
- Private partnerships in energy through renewable programme are fast contributing to power availability over and above the large energy infrastructure built.
- Mature banking institutions and world class capital markets make for easy access to capital.
- The adoption of a socio economic impact assessment system (SEIAS) by Cabinet in September 2015, seeks to avoid policy contradictions and preserve business friendly environment.
- Efforts at Nedlac to foster a stable labour environment are yielding results. The CCMA has been given responsibility through the labour Act amendment to mediate in resolving strikes.
- Comprehensive business incentive packages across sectors offer support to business.
- South Africa provides a platform to leverage on the fastest growing region in the world.
With a strong team consisting of Ministers from the Economic cluster, senior representatives of South African state-owned entities and many representatives of business, Team South Africa took these messages with confidence to the snow-covered town of Davos in Switzerland. This was communicated in all our interactions during the four day long forum.
What we experienced was that investors and leaders of global business continue to be positive about South Africa in particular and Africa as a whole, contrary to the sentiment we have seen expressed domestically about all affairs economic.
Investors and global business leaders also appreciated South Africa’s frankness and openness in explaining some of the challenges we’re are dealing with in terms of our economic growth.
Despite these challenges, South Africa continues to attract foreign direct investment with this week, the ICICI Bank of India announcing it would set up an office in South Africa. This affirms our position that we are a preferred investment destination even in these global conditions.
We also took the opportunity to reiterate to delegates at Davos that the National Development Plan and the 9-point plan for economic recovery, underscored by Operation Phakisa, remains our programme of action. This communicated an awareness on our part that we could not continue with business as usual. The challenging and uncertain global economic conditions necessitate an innovative approach to ensuring that we remain globally competitive in the face of turbulence. A message can only go that far to build confidence. We must now pull together in our various sectors to ensure we implement these programmes.
In a highly uncertain economic climate, we have as Team South Africa once again demonstrated that uniquely South African quality of being able to stand together in the face of adversity because apart from our sectoral interests, our country is most important. This is the spirit that will see us transcend almost unprecedented global uncertainty.
