South Africans, as shareholders in South Africa Inc, have a vested interest in promoting the country, writes Rob Davies* in a newspaper report.
That South Africa has become an investment destination of choice to the world’s biggest companies is not by mere chance. We have consistently remained on the radar of international big business due to deliberate action on the part of government that can be traced to interventions such as the New Growth Path and the Industrial Policy Action Plan.
Recently, the single biggest investment in the local automotive sector was made by German car maker BMW to produce the new-generation BMW X3. The company will invest R6 billion in its Rosslyn plant in the north of Pretoria to manufacture the vehicles for the South African and export market.
Through the Automotive Production Development Programme government has created the environment that makes the country one of the best places in the world to manufacture vehicles.
BMW’s investment follows a string of other manufacturers who have shown confidence in the country. Japan’s Nissan Motors indicated that it planned to build a new model bakkie at its local plant which will increase its production to 80 000 vehicles a year.
In 2014 Chinese company First Automotive Works invested R600 million in a truck assembly plant in the Eastern Cape. To attract more manufacturers in this segment, the government is working to establish an Investment Support Programme for medium and heavy vehicles.
But it does not stop there, similar plans that turned the motor manufacturing industry sector into an investment hub are being rolled out across other sectors of the economy.
Through Operation Phakisa government is unlocking the economic growth potential in marine transport and manufacturing, offshore oil and gas exploration, aquaculture and marine protection. We have also recently extended this to include the mining sector.
South Africa is becoming a frontier for new sectors of investment such as the green economy, oil and gas, shipbuilding and the ocean economy. Through our Renewable Energy Independent Power Producer Programme the country has emerged as one of the biggest markets in the world for renewables.
These various sectors offer companies opportunities to invest and partner with South Africa. Our foreign direct investment numbers show that many companies are already doing so.
Speaking during a state visit to Germany in December 2015, President Jacob Zuma said: “Inward flows also continue to grow and over the last five years South Africa accounted for the bulk of new investment projects in Africa with investment arriving from the US, European Union, China, India and other Asian countries.”
Foreign direct investment in South Africa accounts for about 42 percent of our gross domestic product.
Investors looking to invest in the country are encouraged by the 2015/16 World Economic Forum’s Annual Global Competitiveness Report in which South Africa climbed up seven places from 56 to 49 countries of 140 countries.
South Africa’s biggest improvements were recorded in the areas of health and primary education, efficiency, technological readiness and innovation.
Furthermore, the country boasts a stable democracy, sound financial system and highly regulated banking sector. We are also supported by world-class infrastructure, exciting innovation, research and development capabilities and an established manufacturing base.
South Africa offers investors the stability of a developed country along with the lucrative opportunities of a vibrant emerging market.
Importantly, these investments significantly contribute to our national goals of socio-economic development as they create sustainable jobs and the opportunity for skills development and training.
In the tough local and global economic conditions, government is doing all it can to draw in more investors so that it can grow employment, reduce poverty and turn the economy around.
However, the responsibility to create the environment that attracts inward investment is not the government’s alone. South Africans as shareholders in South Africa Inc have a vested interest in promoting the country in a globally competitive environment.
We all have a patriotic duty and responsibility to build and promote our country.
*Rob Davies is the Minister of Trade and Industry