World Economy

South Africa on Sound Footing

South Africa on Sound FootingSouth Africa on Sound Footing

The government says South Africa remains an attractive investment destination, despite the prevailing global economic conditions.

Government communication and information system acting director general, Donald Liphoko, said South Africa managed to achieve this through its highly developed first-world economic infrastructure and a robust emerging market economy, AllAfrica reported.

Liphoko said government’s partnership with the private sector remains resilient and that this partnership has yielded positive results. He said government is confident that South Africa’s economic and fiscal policies, as well as the inherent strength of the economy, are evidence that the country is on a sound footing.

“We are positive that public entities have in place governance structures, mechanisms and processes to weather any storm. State-owned enterprises are geared for economic growth and have a fundamental role to play in achieving the state’s developmental objectives,” Liphoko said.

South Africa’s attractiveness as an investment destination was confirmed recently by the signing of bilateral agreements by President Jacob Zuma and the Chinese leader to meet the challenges of economic globalization and seeking common development.

One of the results of this agreement is the historic R11 billion ($76 million) investment from Beijing Automobile International Corporation in an automobile manufacturing plant in the Coega Industrial Development Zone in the Eastern Cape.

South Africa and Japan have also signed a memorandum of understanding this week to promote investments from Japan into South Africa. Japan is a long-standing investor in the country. As part of the memorandum, InvestSA and the Japan External Trade Organization will promote and cooperate in the exchange of business delegations, seminars, investment opportunities and matchmaking events between South Africa and Japan.

Liphoko said the message from Germany’s Deutsche Bundesbank executive board member, Andreas Dombret, confirms South Africa is an attractive investment destination, particularly for long-term investors. Dombret was speaking at a media conference at the Reserve Bank in Pretoria on August 29.

Dombret affirmed investor confidence in the country’s infrastructure, the legal system and the credibility of authority in the country.

In as far as South Africa’s ability to attract investment goes, Liphoko said it bodes well for the country that despite a global trend that indicates declining FDI levels, South Africa has been able to attract over R140 billion in the 2013/14 financial year.

This is almost double the amount of FDI in 2012. South Africa was also the recipient of $3.31 billion in FDI from January 2015 to July 2015, which also saw the creation of 5 037 jobs.