President Ramaphosa Reinforces Economic Ties with USA

President Cyril Ramaphosa has reiterated his commitment to strengthening South Africa’s ties with the United State.

Speaking during a virtual business and investment roundtable on Tuesday, President Ramaphosa began by congratulating the Americans for their successful elections held last week, which saw Joe Biden projected to win. (Read President Ramaphosa’s congratulatory message to Joe Biden here.)

Among the attendees of the engagement were three major organisations, Business Council for International Understanding, the Corporate Council on Africa, and the US Chamber of Commerce.

President Ramaphosa described the United States as a longstanding and valued partner of South Africa.

“We look forward to further strengthening our ties of friendship and cooperation with the incoming administration,” he said.

Trading partners

“It is now more important than ever for South Africa and the US to deepen our strategic partnership conducted through a number of political and economic forums,” said Ramaphosa.

He also revealed that:

• The US is SA’s third-largest trading partner.
• Last year, South Africa was the largest source of African imports to the United States followed by Nigeria, Egypt and Algeria on the continent.
• SA is a leading recipient of United State foreign direct investment in Africa, and the largest African investor in the United State.
• South Africa is home to 600 American companies, which are key to economic growth and job creation.

“It is this firm foundation that we want to build upon as we prepare to host the third South Africa Investment Conference in a week’s time,” he said.

He said the government is fast-tracking measures to reduce the cost of doing business and lowering barriers to entry.

Economic Reconstruction and Recovery Plan

The President believes that the Economic Reconstruction and Recovery Plan launched last month is one of the key drivers to restart the economy. The plan identifies four priority intervention areas including infrastructure build programme, expanding energy generation capacity, employment stimulus through social and public projects, and accelerating industrialisation through local production.

“As we say in the plan, there is ‘a ruthless focus on implementation’,” he added.

“We have developed a robust pipeline of projects with an investment value of R2.3 trillion – or around $150 billion – that will transform the landscape of our cities, towns and rural areas,” he said, adding that sustained growth depends to a large extent on the ability to give all South Africans a meaningful stake in the economy.

Meanwhile, he said broad-based black economic empowerment is vital not only to correct the injustices of the past and overcome the inequalities of the present but also to ensure the economy can realise its full potential.

He has welcomed support received from the many United States firms that operate in South Africa in advancing empowerment, including using innovative and transformative equity equivalent schemes.

“There are many new opportunities for US companies to participate in our economy as we seek to increase investment in our productive capacity.”

Vaccine and manufacturing

President Ramaphosa also mentioned recently concluded deals involving Aspen Pharmacare, and two subsidiaries of Johnson & Johnson to manufacture a COVID-19 candidate vaccine locally.

“This is yet another demonstration of the partnership between South African and American business, making use of our world-class manufacturing capacity to answer a pressing global need.”

He told delegates that growing domestic manufacturing is a key component of the country’s recovery plan and that much work is underway.

“We have, for example, already finalised master plans in the automotive, clothing and textile, poultry and sugar industries.”

He said the country received R60 billion – or around $4 billion – in investment pledges from vehicle and component manufacturers.

“We are working with the respective industries to finalise master plans for the digital economy, forestry, aerospace and defence, renewable energy and a host of other important industries.”

African trade

He said African Continental Free Trade Area (AfCFTA), coming into operation in January, will have a massive impact on African economies, on trade and investment.

President Ramaphosa cited a World Bank report estimating that the AfCFTA could contribute to an increase in real income gains for the continent of 7%, or nearly $450 billion, by 2035.

“With its relatively developed industrial base and the measures underway to expand manufacturing capacity, South Africa is well-positioned to benefit from the opportunities that the Continental Free Trade Area will provide.”

The President also predicts that Africa’s export sectors will need more international trade agreements to access market opportunities and global value chains.

“We must strengthen collaboration on skills transfer, training and information sharing.”

Meanwhile, he said impediments to trade, both tariff and non-tariff related, must be reduced.

“Let us continue to work together to strengthen the trade environment and investment climate in our respective countries,” President Ramaphosa added.

Get the entire Economic Reconstruction and Recovery Plan here. – SAnews.gov.za