Hardly 24 hours after Finance Minister Malusi Gigaba tabled what was a difficult medium term budget, a leading United States investor has announced plans to invest over $1 billion in South Africa over the next few months.
Ambassador Harold Doley, Jr, the Governor of the African Development Bank, said as an international investor, the medium term budget, which gave a frank assessment of the state of the fiscus and the economy, has signalled for investors to commit resources to South Africa.
“We think that what you have done is tabled a watershed budget and as an international investor, you have sent a signal to a group of investors that I represent as a lead investor that we are going to invest over the next several months. We are committing over $1 billion to invest in the South African economy in technology, education and agribusiness. Technology is the future to train young people, to employ young people and we want to be your partner.
“I am going to tell you something you will seldom ever hear: we want to come here and pay taxes, we want to make money so we can help you with your deficit,” Doley said.
His remarks come after Minister Gigaba tabled a difficult budget, which saw National Treasury announcing a revenue shortfall as a result of a number of factors – from the recapitalisation of the SA Post Office and the SA Airways to low tax compliance that eroded the tax revenue base.
Doley’s announcement came during a question and answer session facilitated by SABC Morning Live anchor Leanne Manas on Thursday.
During the conversation, Minister Gigaba said South Africa’s economic growth can be turned around if a number uncertainties are addressed to boost investor confidence.
The Minister also urged the private sector to get more involved and partner with government to stimulate the economy on a positive trajectory.
He said this during a breakfast conversation hosted by Business Report under the banner BR Ignite in Cape Town.
In his medium budget, the Minister announced a downward revision of the projected economic growth to 0.7%.
He also announced measures to avoid an expenditure ceiling breach and to arrest the widening of the budget deficit.
The Minister also announced a package of measures aimed at stabilising government debt, including the formation of a Presidential task team to come up with proposals to achieve this target.
During the breakfast conversation, the Minister said the economy has not grown at desirable levels and that the situation can be turned around.
“The 0.7% growth that we projected for this year can be changed by us. If government increases the scale and pace of structural reforms and we resolve a number of uncertainties around the telecommunications issues – the spectrum policy – if we resolve the deadlock around mining, if we resolve and implement even the SOE reforms and reduce the debt of the SOEs,” he said.
He also called for the private sector to get more involved and partner with government to stimulate growth and create jobs.