South Africa well positioned as Africa's industrial centre: President Ramaphosa
President Cyril Ramaphosa has told American business representatives that Africa is ready for new investment and strong partnerships.
The President was delivering remarks at the US - South Africa Trade and Investment Business Roundtable Dialogue in New York on Monday.
“Africa is ready for new investment and strong partnerships. South Africa is well positioned as the continent’s industrial centre, with deep capital markets, the rule of law, protection of property rights and a dynamic and youthful population.
“The significant presence of US companies operating in South Africa, including Ford, Coca-Cola, Pepsico, Procter & Gamble, Google, Amazon and Walmart, among many others, forms a base for increased investment,” the President said.
President Ramaphosa said he was pleased to hear that the US Africa Business Council and BUSA will be hosting the inaugural business and investment forum on the margins of the AGOA Forum scheduled to be held in South Africa in November 2023.
He said this platform will present the countries’ respective governments, private sectors and civil society with numerous opportunities to advance trade and investment relations.
“I look forward to our discussions and encourage your candid views. I also look forward to welcoming all of the companies present here today to South Africa in November this year during the AGOA Forum… I look forward to building and strengthening business relationships that will accelerate growth, enable commercial success and ensure prosperity for both our countries,” President Ramaphosa said.
The President told the business representatives that global prosperity has been founded on greater levels of openness and engagement between nations and people.
He said in recent decades, a more open, rules-based trading system, complemented by deeper levels of cross-border investment, has helped to sustain and grow global GDP.
He said it has helped to increase employment in many countries and spur innovation and new technologies.
“Yet, the heightened tension of this moment has led to fragmentation, hostility and increasing protectionism. For South Africa, a divided world is not a good thing. We are a trading nation, with above average trade-to-GDP ratios. A significant part of our economic growth is driven by exports.
“We believe that the voices advocating greater dialogue and continued economic engagement between nations need to be strengthened,” he said.
Trade and investment agenda
Turning to the trade and investment agenda, President Ramaphosa said that they are finalising the modalities for the imminent launch of trade under the African Continental Free Trade Area.
“We expect that the first goods to be traded under this free trade pact would commence within the next six months or sooner. The AfCFTA, as it is called, will cover 1.3 billion consumers in countries possessing some of the world’s most valuable minerals and raw materials,” he said.
South Africa is working with the US Administration to make the case for the extension of AGOA to current beneficiary countries for a further period of 10 years, prior to its expiry in 2025, President Ramaphosa said.
He emphasised that the US remains a very important economic partner in trade and investment, with great potential to further expand economic ties.
Accompanying this trade agenda, the President said government has embarked on far-reaching economic reforms, including the energy market being restructured.
Economic reform agenda
Turning to the economic reforms agenda, President Ramaphosa said the country is also focusing on expanding its industrial capacity.
“The availability of critical raw materials in South Africa and in neighbouring countries is driving efforts to expand high-value manufacturing. This is a real opportunity for more US investment that can leverage off the demonstrated manufacturing base of South Africa.
“African growth rates provide a stable growth in aggregate demand over the next decade and more,” he said.
The recently published African Economic Outlook for 2023 noted: “Growth is projected to rebound to 4% in 2023 and consolidate at 4.3% in 2024, underpinning Africa’s continued resilience to shocks.”
The report goes on to say that Africa is endowed with 30% of the world’s mineral resources and 65% of the world’s uncultivated arable land, the world’s most productive forests both in timber and carbon retention resources, and ample solar, wind and hydropower.
“With this kind of potential, savvy investors will be expanding… their base in South Africa and the rest of the continent.
“Our economic reform agenda also includes targeted measures to open the market for more South Africans to participate,” he said.
The President told the business leaders that South Africa has increased its target for its investment drive to R2 trillion over the next five years.
“To appreciate the great opportunities in our economy, I invite you to the next South Africa Investment Conference, to be held in March 2024,” he said.
The investment drive includes an expansion of Special Economic Zones, the most recent of which was built around the Ford Motor Company plant in the capital city, Pretoria. Around 10 large factories now produce components for the scaled-up Ford plant.