Davos Litmus: Zuma’s delegation (Africa’s largest) arrives – SA ‘Open for Business’

Davos looks set to be a good litmus test for South Africa following recent controversies. President Jacob Zuma and his ministry (the largest African delegation in attendance) have arrived at the 45th annual World Economic Forum, carrying the slogan “open for business”. The closed door discussions will be interesting and being a fly on the wall priceless. While the post Davos government wrap on any new investment will be a true reflection of how much damage, if any, has been done, and whether taxpayer funds spent on the trip were worth it. It also includes President Zuma’s full address to the South African delegation. – Stuart Lowman

Media statement from the SA Presidency

President Jacob Zuma has arrived in Davos, Switzerland where he is leading the South African delegation to the World Economic Forum 2016.

The President is accompanied by seven Ministers and a large business delegation of chairmen and CEOs of companies. The theme for WEF 2016 is Mastering the Fourth Industrial Revolution.

South African President Jacob Zuma speaks at the opening plenary session of the World Economic Forum (WEF) on Africa in Cape Town, June 4, 2015. Reuters/Sumaya Hisham
South African President Jacob Zuma speaks at the opening plenary session of the World Economic Forum (WEF) on Africa in Cape Town, June 4, 2015. Reuters/Sumaya Hisham

The theme of Team South Africa (TSA) is that South Africa is Open for Business. An important TSA planning session was held in Pretoria on 15 January 2016 and the team of Ministers, Chairmen and CEOs of major
companies is ready to present the many positive attributes of the country in Davos.

WEF Davos takes place in a challenging global environment for both governments and business. The deterioration of the global economic outlook in recent months has resulted in slower global growth that has
led to the weaker performance in several important developing countries, including China.

Moreover, the weakness in commodity prices is a concern for major commodity exporters such as South Africa. The fall in commodity prices is unlikely to reverse and will have a sustained impact on emerging
market economies.

President Zuma says South Africa will be able to present a strong case for South Africa in Davos despite the difficult global context.

“South Africa has proved to be a resilient economy which is the outcome of the solid economic fundamentals that have been laid since the advent of democracy. Building on this success, the National Development Plan provides a basis for collective action by all of us in the country to stabilise the economy, build confidence, raise the level of investment and return South Africa to a path of inclusive economic growth,’’ he said.

The President added; “We will also be sending a strong message that South Africa is committed to strong fiscal discipline. Government has stuck to its spending limits for the past three years and is on track to stay within the expenditure ceiling in 2015/16’’.

Team South Africa goes to Davos against the background of investor confidence that has been demonstrated by many international companies that have increased their investments and expanded their South African operations.

Government welcomes the following main investments among others:

•    Mercedes has invested R 2.4 billion, General Motors R 1 billion, Ford R3.6 billion, the Metair Group R400m, Goodyear R670 million.

•    BMW has recently increased its investment by R6 billion and VW by R4.5 billion.

•    Beijing Automobile International Corporation (BAIC) announced an investment of R11 billion in a vehicle manufacturing plant.

•    Hisense has expanded its South African operations and has recently started exporting into the SADC region from its South African base.

•    Marriot Hotels has also announced it will increase its South African footprint.

•    Starbucks, Dunkin Donuts, Krispy Kreme and Facebook have chosen to set up offices in South Africa.

The President is accompanied by the following Ministers:

•    The Minister of Finance, Mr Pravin Gordhan, the lead Minister
•    The Minister in the Presidency for Planning, Monitoring and Evaluation, Mr Jeff Radebe
•    The Minister of Trade and Industry, Dr Rob Davies
•    The Minister of Water and Sanitation, Ms Nomvula Mokonyane
•    The Minister of Economic Development, Mr Ebrahim Patel
•    The Minister of Energy, Ms Tina Joemat-Pettersson
•    The Minister of Health, Dr Aaron Motsoaledi

The WEF Davos 2016 meeting will also feature South African culture. The President is accompanied by popular band Mafikizolo, who will perform at the annual WEF soiree, the gala dinner that marks the end
of the session.

Mafikizolo wowed WEF delegates when they performed at the Soiree/Mokete in Cape Town in June last year and the founder of WEF Prof Klaus Schwab made a special request that they perform in Davos as well.

Address by President Jacob Zuma to the South African Delegation (Team South Africa) at the World Economic Forum, Davos, Switzerland

Issued by the Presidency

21 January 2016

Ministers, business leaders and Team South Africa as a whole,

Representatives of our hosts, the World Economic Forum,

Good day to you all in this beautiful Davos!

I am very proud to be part of a very strong delegation of fellow countrymen and women who are here for this year’s chapter of the annual World Economic Forum meeting.

The World Economic Forum meetings have proven to be a very important event on the international economic calendar, for us and many nations around the world.

The Forum represents a necessary platform for leaders from government, business, and civil society across the world to deliberate on challenges and most importantly to influence on opportunities that those challenges may present.

South Africa has a strong showing in Davos each year. That is because of the unity of purpose of the South African delegation. We come here very clear about what we are coming to achieve.

We come here each year to tell the story of our beautiful country and its successes.

We do so with confidence because the positive attributes and progress made by South Africa since 1994 far outweigh the challenges that we face as a developing country with a particular history of enforced inequality and exclusion.

This year’s meeting happens in yet another difficult time in the global economic environment.

Fears of a slowdown in China are fuelling concerns about global growth prospects.

Lower commodity prices have also seen prospects of economic recovery in developing countries fade. The cloud of uncertainty has resulted in volatility in capital markets.

This has also put severe strain on investments in developing economies and their currencies.

Despite a very unfavourable economic backdrop, the South African economy has been very resilient.

Although remaining short of our growth ambitions, the country’s stability in the macro and fiscal framework and a diverse economy have shielded the economy from the full impact of the lower commodity prices which has hit developing economies.

Although commodity prices remain our key export earner, growth in the services sector has provided much needed cushion.

We need, as a country, to leverage further on this diversity.

Our participation in this forum, compatriots and friends, is underpinned by clear objectives.

We want to raise the level of foreign investment in our country. Therefore, our message remains clear. South Africa is open for business.

Secondly, we want to further expand the footprint of our companies on the continent and globally.

We are here to say to investors that South Africa is where they should be, and we have very good reasons for saying so. We have a relatively diversified economic base.

We have an economy that offers world class business services in areas such as information and communication technology, transport and logistics, and financial and professional services.

Our country is becoming a frontier for new sectors of Foreign Direct Investment such as the green economy, oil and gas and ocean economy sectors such as shipbuilding.

We are investing time and money in energy security to contribute to economic growth, and efforts to expand our energy supply and sources are continuing.

We are diversifying our energy mix and have attracted substantial private sector investment in clean energy, through the Renewables Independent Power Producers Programme.

This has been a flagship programme for us. It highlights the synergies that can be generated when the public and private sector work together.

The government is currently evaluating bids for coal Independent Power Purchases from the first bid window which will total two thousand five hundred megawatts of power when completed.

The government is also preparing the procurement of three thousand one hundred (3100) megawatts of gas to power.

With regards to the ease of doing business in our country, let me emphasise that we have heard the suggestions from business at home and abroad.

Domestic and international investors have appealed to government to help ease constraints and unnecessary bureaucratic delays and make South Africa more investor-friendly.

In response, our Government will be introducing an “Invest South Africa” (InvestSA) initiative during the course of the year.

Work has already begun to establish an interdepartmental clearing house or one stop shop service which will be rolled to all provinces. I have established an Inter-Ministerial Committee on Investment to work on this important project, which I personally chair, assisted by the Minister of Trade and Industry.

Our government also offers a range of business and investment incentives across various sectors.

These programmes have yielded substantial inward investments over the years, most notable in the automotive sector, demonstrated by the expansions or new investments that we have seen in recent times in the country.

We are aware that improved communications and predictability of government policy are important to support investment by the private sector. This will be one of the key tasks of the IMC.

Government also decided that from 1 September 2015 all future legislation and regulations will be subject to a socio-economic impact assessment before being passed.

This process will promote greater policy coordination.

Let me reiterate that our National Development Plan Vision 2030 remains our blueprint for socio-economic development and we continue to implement it.

Last year, as part of implementing the NDP, we introduced a Nine Point Plan to ignite growth and create jobs.

The Plan entails intensive work in the following areas:

  1. Revitalisation of the agriculture and agro-processing value-chain;
  2. Advancing beneficiation and adding value to our mineral wealth;
  3. More effective implementation of a higher impact Industrial Policy Action Plan;
  4. Unlocking the potential of SMME, co-operatives, township and rural enterprises;
  5. Resolving the energy challenge;
  6. Stabilising the labour market;
  7. Scaling-up private-sector investment and
  8. Growing the Ocean Economy as well as cross-cutting areas to Reform, Boost and Diversify the Economy.

The cross-cutting areas are science, technology and innovation, water and sanitation, Transport infrastructure, Broadband rollout and State owned companies.

We want to continue working with you as the business sector, to ensure that our economy improves performance in these areas.

We have all the confidence, that through the partnerships formulated through WEF and other forums, we will continue to strengthen South Africa’s position as a preferred choice for investment.

Compatriots and friends,

I am sure that all of you have enjoyed the sessions thus far, and have engaged robustly in the discussions under theme of the Mastering the Fourth Industrial Revolution.

Let us continue to engage and communicate the opportunities that exist in our beautiful country.

South Africa, like many developing countries, faces challenges in the current global economic context, and also based on its unfortunate history.

The key advantage we have, is that working together as South Africans, we always find solutions to our challenges. In this way, our country will certainly prosper.

And indeed that South Africa is open for business!

I thank you ladies and gentlemen.

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