Why South Africa is on a path of economic renewal

MATAMELA CYRIL RAMAPHOSA, President of South Africa (UN Photo, 2018)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Cyril Ramaphosa, President, South Africa

This year, South Africa will celebrate 25 years of democracy, hold its sixth democratic national election and accelerate the process of economic revival and growth.

Over the last quarter century, the country has made remarkable progress in expanding opportunities for its people, most of whom still live with the effects of the apartheid system. Millions of poor South Africans have been provided with houses, social support, electricity and water. The black middle-class has grown significantly and access to healthcare and education have been expanded.

However, over the last decade, growth has been slow, progress in several areas has stalled and corruption has undermined key public institutions and state-owned enterprises. More South Africans are employed than ever before, yet our levels of inequality remain amongst the highest in the world.

In the last year, we have taken firm measures to correct this. As a result, the country is now emerging from a period of economic stagnation and political uncertainty and has entered a new era of renewal in support of our growth ambitions.

We have a firm foundation on which to build. South Africa’s high level of industrialisation, our position as a key manufacturing hub and services destination on the African continent, our strong financial sector are key drawcards for investors.

Furthermore, we are one of the most technologically resourced countries in Africa. We consistently rank highly in terms of internet bandwidth capacity and broadband penetration and have some of the highest mobile phone subscription rates on the continent.

Whether it is in mining, manufacturing, agriculture, clothing and textiles, services, tourism or the ocean economy, South Africa’s economy is as diverse as it is sophisticated. It is our ambition to diversify our export basket further and move towards higher productivity and enhanced global competitiveness.

We are aware of the critical policy missteps that led our economy to flounder and the effect that corruption and political patronage has had on public confidence.

But the political and economic landscape of South Africa has vastly improved. A year ago I laid out ambitious plans to turn our economy around, restore business confidence, deal decisively with corruption, and get our people working again.

We have registered significant gains. As part of an ambitious drive to raise $100 billion in new investment in five years, I appointed four investment envoys and assembled a specialised team to mobilise and facilitate investment. Just a few months into this journey, commitments of more than $6 billion show investors have confidence in the range of reform measures we have put in place.

Government is working with the local and international business community, labour, civil society and other stakeholders to drive our economic recovery. These social partners have also agreed on a range of actions to create new jobs and protect existing ones.

We promised to restore good governance, deal with corruption and restore faith in our public institutions. Commissions of inquiry have been established to investigate the capture of government institutions and key state-owned entities by private interests. We have appointed new boards and executives to these entities and begun steering their recovery in earnest.

Efforts to introduce a new era of accountability are taking hold. The state revenue service, a vital cog in the economy, is being stabilised. Confidence in the criminal justice system is also being restored through the appointment of new leadership teams.

We have made important headway in addressing policy uncertainty and inconsistency. Through consultation with all stakeholders, we have revised the country’s mining policy, balancing the need for growth with the need for transformation of the industry. After years of delay, a plan outlining our country’s energy mix until 2050 is finally on the table.

We have begun a process to pave the way for faster and more sustainable land reform – vital to provide policy certainty and predictability and to support the stable growth of our economy. This ongoing dialogue between different sectors of our society has the potential to forge a comprehensive, sustainable solution to an issue that has divided our nation for centuries.

We are committed to pursuing these economic and political reforms necessary to restore the confidence of our citizens as well as domestic and international investors.

As political turmoil plagues the globe, South Africa once again stands out as a beacon of hope and co-operation in a new world order. All nations’ economic destinies remain intertwined and as a bridge between the developing and developed world, South Africa offers a rejuvenated vision for a future of shared prosperity.