Pre-Investment Conference Briefing by Minister Naledi Pandor to the South African Heads of Missions Abroad on 05 November 2019 at the Sandton Convention Centre
Excellences, Ambassadors and High Commissioners
Senior Management of the Department
Ladies and Gentlemen
Welcome home for this brief visit and thank you for the work that you have done in identifying potential investors for the Second Investment Conference. I am pleased that we have found time to have a brief investment conference briefing.
The 2nd Investment Conference takes place in the context of declining and inadequate job creation. The government has been implementing an economic stimulus package that is targeted at sectors that could give us improved growth and job creation.
The investment conference is linked to government’s economic strategy. It is directed at achieving the President’s objective of securing $100bn dollars in Foreign Direct Investment and doing so in job and business creating sectors.
The inaugural South African Investment Conference was hosted in October 2018. At the Inaugural Investment Conference, international and local investors pledged R300-billion worth of new investments. It is envisaged that a select number of private sector investments will be announced at this conference, and updates provided on the progress of the commitments made at the Inaugural Investment Conference of 2018.
For DIRCO, the strategic importance of this Conference is at the heart of our economic diplomacy work as highlighted in the White Paper on South Africa’s Foreign Policy (2011).
Economic Diplomacy is an essential part of DIRCO’s collective efforts to help South Africa meet national development objectives, as set out in the National Development Plan (NDP) as well as in the seven priorities of the 6th Administration. It is essential for DIRCO, as a frontline key enabler and partner, to mainstream and coordinate the economic objectives of South Africa into its programmes and processes (both at Missions and at Head Office).
Our focus on economic diplomacy means using the full spectrum of tools at the disposal of the state to pursue our national interests. As you are aware, DIRCO is not an implementing or delivery Department in the common meaning of this term. However, its ability to create and identify partnerships places it in an excellent position to promote trade and investment. This potential means we in DIRCO must provide effective support to you to ensure we successfully use the opportunities you identify. Our mission can host trade events and seminars, attend local trade shows, visit potential investors and proactively market the attributes of our country. Success in this endeavour requires knowledge of the business process, our needs and strategic interests, the economy of the country in which you serve and continuous interaction with relevant institutions.
South Africa has many positive attributes that make us an attractive investment destination:
- South Africa is one of the most sophisticated and promising emerging markets, offering a unique combination of highly developed first world economic infrastructure with a vibrant emerging market economy;
- South Africa is one of the world’s 26 industrialized nations;
- South Africa has one of the largest economies on the African continent, accounting for approximately 25% of the continent’s GDP;
- Advanced financial markets infrastructure, with the JSE Securities Exchange being Africa’s largest and most developed Securities Exchange and one of the world’s top 20 exchanges;
- South Africa has the most advanced Information & Communications Technology (ICT) infrastructure in Africa;
- Internet and personal computer penetration is the highest in the region;
- South Africa’s internet infrastructure is the best in the region, with upload and download speeds much higher than other regional economies;
- This helps to make South Africa an ideal location for investment in Software & IT, data centres, creative Industries and other activities involving high internet usage;
- South Africa has the highest number of secure internet servers in the region; and
- South Africa has by far the largest road and rail transport system in Africa. As a result, the country hosts the largest cluster of air transport and water transport companies in Africa.
According to Ernst and Young’s 2017 Africa Attractiveness Index, South Africa ranks 2nd in the African continent (tied with Kenya) and ranks 61st out of 137 countries in the World Economic Forum’s (WEF) Global Competitiveness Index 2017/18, ranking relatively well in business sophistication (37th) and innovation (39th). In addition to this, the cost of doing business in SA is a significant “pull factor”, underpinned by factors such as:
- Availability of key inputs (e.g. skilled labour, electricity supply);
- Logistics (e.g. time to import/export etc.);
- Supportive operating environment (e.g. sound banking sector)
If we are to succeed in what we are doing, we must always take into account these factors. We should also include the region of SADC and our entire continent in conceptualising an appropriate strategy for exploiting these advantages.
I am aware there are several missions where such an economic focus is vigorously pursued and that we have secured progress in investment, business creation, and jobs growth through the efforts of our ambassadors. We are considering improving our ability to support you in your efforts to ensure we take up opportunities speedily and liaise more closely with DTI and related economic departments. Since you are at the coalface it would be helpful to hear your thoughts on proposed future improvements so we derive maximum value from your presence in different countries.
In conclusion, the Investment Conference provides a great opportunity for networking with both the private and the public sector. The Investment Conference also provides for investors to interact with the President and Ministers on issues such as policies, accessibility of our markets etc. Heads of Mission will be strategic in facilitating meetings/introductions of investors to relevant Ministers at the conference.
Beyond the Conference I request the Heads of Missions to provide support to investors by regularly engaging with them and encouraging them to expand the investments. I encourage Heads of Missions to continue to attract and source new investors for future Conferences as this is a five-year initiative.
I thank you!
ISSUED BY THE DEPARTMENT OF INTERNATIONAL RELATIONS AND COOPERATION
OR Tambo Building
460 Soutpansberg Road