Business Unity South Africa (Busa) is optimistic about South Africa’s economic prospects following meetings with investors and ratings agencies in London this week.
Busa is part of the South African delegation that is undertaking a week-long investor roadshow in London, Boston and New York. The South African delegation is led by Finance Minister Nhlahla Nene, Deputy Finance Minister Mondli Gungubele, National Treasury director-general Dondo Mogajane and other National Treasury and South African Reserve Bank officials.
According to Busa, recent leadership developments, along with South Africa’s strong institutions, media and political freedoms, as well as committed public servants that have maintained the integrity of National Treasury in the more recent past have all been seen as signals of a robust Constitutional democracy.
“Commitment to greater policy certainty and fiscal consolidation were regarded as vital for attracting investment. Investors reinforced the importance of continued efforts to address corruption and inefficiencies within government, and particularly in State-owned enterprises (SOEs),” states Busa.
Busa CEO Tanya Cohen, who is attending the international investor roadshow, in London, says that, as expected, policy certainty and political stability have been identified as a prerequisite for long-term investment.
“Engagement and transparency with social partners in the National Economic Development and Labour Council, where policy is developed with the benefit of evidence-based analysis, will ensure greater buy-in and contribute to policy certainty for business.”
Busa VP Martin Kingston comments that South Africa has strong representation from the National Treasury, labour and business that have addressed issues raised clearly and comprehensively. “Implementing decisions to deal with the issues and leverage our strengths will go a long way to inspiring and retaining confidence of capital.”
Moreover, the South African delegation was praised for the progress made in stabilising the country’s fiscal position.
However, State-owned power utility Eskom, along with other SOEs, did not escape the scrutiny of the ratings agencies and investors, who highlighted the importance of stabilising the financial status and governance of the country’s struggling SOEs.
Other issues raised by the investors include South Africa’s high youth unemployment rate, clarification on the process to deal with land expropriation without compensation, labour relations stability and the costing and funding of free higher education.