SA in no position to take advantage of World Economic Forum

While South Africa’s geographic location gives it a strategic edge over the rest of Africa, failure to ensure domestic stability – energy, logistics, ports and rail are in crisis – remains an impediment in a campaign to woo potential investors at the World Economic Forum in Davos, Switzerland, according to experts.

The five-day annual forum, which opened yesterday, is attended by political, social and economic heavyweights.

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The SA delegation is led by Finance Minister Enoch Godongwana, accompanied by the ministers of trade, industry and competition, higher education, science and innovation, communications and digital technologies, electricity and health.

Social Policy Initiative executive director Isobel Frye says government must effectively address the energy crisis “swiftly, ensuring domestic stability…

“We have some months until winter bites, with more industries set to close, leading to fewer jobs. We need to be able to say we have a viable solution to the energy [crisis] and to the logistics crises around rail and ports.

“With heightened anger due to poverty, unemployment, lack of progress on prosecutions following the Zondo commission, a plethora of new political parties vying for positions and no new policies, there is little to attract investment to SA,” said Frye.

The country’s economic malaise has led to the unemployment crisis and lack of growth in gross domestic product (GDP).

“SA’s position is bleak in many ways, but so is the global canvas. “The country can still hold space on green energy initiatives. As part of the Brics formation, SA can be seen as a facilitating party to other blocs we also have historic ties with,” she added.

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“Our location is important from a shipping logistics [point of view] due to the increase in maritime piracy.” Despite the many economic opportunities to explore, independent political analyst Sandile Swana said the lack of a credible political and administrative leadership in government had contributed to the SA crisis.

“Opportunities are many, but the capacity in terms of political and administrative leadership is highly questionable, [so SA is] unable to take advantage of existing opportunities.

“Among prerequisites for investment are a relevant, competent workforce and reliable infrastructure, which includes water and electricity,” he said.

“There should also be updated regulations relevant to specific industries and tax incentives.

“Africa has a six percent target for GDP growth and there are three nations identified by the African Development Bank as the ones pulling the average down.”

One of these is SA, he said. The other two are Ghana and Nigeria. “We are still to get to one percent and it is unlikely we will get two percent in the next five years.

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“In terms of investment, the president and the ANC have not been able to offer anything to potential investors.

“Although the money is there, there is no social compact for investment.”