Speaking Notes for Deputy Minister Landers at Business Event Madrid, 13 November 2018
Ladies and Gentlemen
I am honoured and delighted to be here in Madrid. We just completed very successful political Consultations between Spain and South Africa, a forum which continues to contribute positively towards deepening the political and economic ties between our two countries.
Ladies and Gentlemen
South Africa’s Business and Investment Environment
Even though we have come out of very challenging decade both politically and economically South Africa today and going forward remains and has committed to being an investor-friendly and corruption -free destination. Allow me to mention some of the reasons why I can boldly make this statement:
South Africa’s prudent fiscal management and monetary policies have given rise to macroeconomic stability, which we continue to enjoy today, while my country’s institutions of governance remain robust.
The performance of both private and public sector institutions have created an enabling, low-risk environment. This is confirmed by Ernst and Young’s (EY) Attractiveness Report on Africa in 2017 which states that South Africa remains the leading foreign investment destination on the continent.
South Africa is an attractive emerging market which has experienced exponential growth in its middle class. Rising disposable incomes over the past few decades have led to an affluent consumer base.
My country also has abundant natural resources. South Africa is lavishly endowed in precious metals, being the world's leading producer of Platinum group metals and the world’s 6th largest producer of gold.
South Africa also has the most diversified economy in Africa. It is the regional manufacturing hub and the most industrialized country on the continent with the largest presence of multinationals in Africa.
South Africa’s mature accessible legal system, progressive Constitution and independent judiciary, provides certainty and respect for the law. Its sound regulatory framework, protecting investors and commercial and legal practices, is on par with the best in the world.
South Africa is considered to be Africa’s top destination when it comes to the protection of both multinational as well as minority investors. This was confirmed by the Business Monitor International’s Trade and Investment Risk Report for 2017, which situates South Africa at the forefront within the region in terms of comparatively low levels of investment-related risks.
South Africa is a financial services hub in Africa. South Africa’s advanced financial services and sophisticated banking sector also has a major footprint in Africa.
South Africa, the most industrialised country on the African continent, has world class infrastructure and logistics services already in place. This is coupled with world class universities and training colleges that offer the investor immediate access to excellent human resources.
South Africa also offers favourable market access to global markets.
South Africa is the largest intra-regional investor in the Southern African region, a market of more than 200 million consumers, and the African Continental Free Trade Area (AfCFTA) is expected to boost intra-Africa trade and create a bigger market of over 1 billion people with a GDP of $2.6 trillion that will unlock enormous business opportunities.
We have restarted a process to ensure that we remain committed to a country of good governance and addressing corruption both within the private and public sector.
Recently, South Africa hosted an International Investment Conference in response to an initiative tabled by President Cyril Ramaphosa. The Conference, which was held from 25 to 27 October, was aimed at “accelerating economic growth by building partnerships”. The huge number of multinational and SME investors, with thriving businesses, that were present at the event once again demonstrated international confidence in South Africa.
The International Investment Conference is part of a five-year investment drive which is part of South Africa’s long-term journey of societal transformation aimed at addressing inequality, unemployment and poverty and to build an inclusive and innovative society.
In this regard the South African Government’s intention is to also unlock the economic potential of land. By bringing more land into productive use through land restitution and redistribution, we are giving more South Africans assets and opportunities for more inclusive and meaningful growth.
It is in South Africa's interests to have commercial farmers, and this process will ensure that we have even greater numbers of successful commercial farmers. We remain committed as a country to the continuation of sound economic policies that is inclusive of all South Africans.
In order to ignite economic activity, restore investor confidence and strengthen good governance of state-owned institutions we will review legislation and policies in several sectors.
South Africa’s new National Energy Plan will make provision for ensuring energy security, environmental obligations, infrastructure capabilities, the cost of technologies and demand and supply options. South Africa’s dependence on coal for electricity generation will be reduced by increasing the amount of low-carbon nuclear and renewable technologies, especially wind and solar power.
In this regard, allow me to mention that Windows 3.5 and 4 of our Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) is on track and the Department of Energy has recently signed agreements with preferred bidders of the REIPPP. These 27 projects combined have attracted an investment of about R58 billion. The projects will be located in various parts of the country in mainly rural areas and are expected to unlock many jobs. These projects are mainly dominated by solar and wind power and are anticipated to reach commercial operation closer to 2021.
South Africa is ranked among the 5 top mining countries in the world. To ensure that opportunities in the mining sector grow, the South African Department of Mineral Resources issued a new Mining Charter in September 2018, with new guidelines which will reduce policy uncertainty and boost investment in the sector.
The long-term goal is to mobilise R1.2 trillion (US$100 billion) in new investments over the next five years. This drive will provide massive investment opportunities that need to be explored by Spanish companies.
Spain and South Africa
South Africa is open for business. It is essential to unlock the full potential of the bilateral relations between Spain and South Africa, securing win-win cooperation and synergies between our countries and companies.
In this regard I am pleased to note that Spanish interest in South Africa has increased exponentially over the past few years. Our trade today has finally surpassed our figures prior to the 2008 financial crash. Spain toady being one of the main investors in South Africa. It’s Foreign Direct Investment (FDI) stock in SA is +- 821 million euros and more than 150 Spanish companies have invested in South Africa. More than 20,000 jobs have been created, largely in the following FDI sectors: Infrastructure Development; Renewable Energy; Financial Services; Tourism; Textiles; IT & Software; and, Metals and Mining.
Spanish companies have especially contributed to the renewable energy sector in South Africa and have brought to South Africa the latest technologies.
I would like to call on Spanish companies to continue to pursue future opportunities within the context of South Africa new National Energy Plan and the Renewable Energy Independent Power Producer Procurement Programme.
Apart from the Green Economy, other key priority sectors in which there is a great potential for Spanish investment in South Africa are Water management and Waste management, Agro-processing, Transport, Infrastructure, Mining and Mineral beneficiation, Manufacturing and Boat building & associated services (the Ocean Economy).
Allow me to welcome you to my beautiful country and invite you to continue exploring all the business opportunities available in South Africa. The South African Embassy in Madrid stands ready to assist Spanish companies to identify potential partners in South Africa.
Your presence here today reflects the high value you place on our strong, friendly and growing relations.
I Thank you.
Deputy Minister of International Relations and Cooperation, Republic of South Africa
ISSUED BY THE DEPARTMENT OF INTERNATIONAL RELATIONS AND COOPERATION
OR Tambo Building
460 Soutpansberg Road