A conducive investment climate is essential for a country to achieve inclusive and sustainable growth. It plays a decisive role in attracting national and foreign investments. As the most advanced, broad-based economy on the continent, South Africa offers EU investors a diverse economy with a mature financial sector and highly developed transport infrastructure. President Ramaphosa has repeatedly stressed the need to improve the conditions for domestic and foreign investors.
The EU remains South Africa’s first trading and investment partner, accounting for 25% of South Africa’s trade and 75% of its foreign direct investments (FDI).
South Africa could dramatically improve investor confidence through a set of measures enhancing investment protection.
- A re-shaping of certain B-BEEE requirements would trigger increased FDI flows; especially from smaller EU companies and at the same time promote skills and technological transfers into SA.
- A re-calibration of procurement policies should be considered to achieve the intended policy goals related to transformation without hurting productivity and South Africa’s competitiveness. If EU businesses have a level playing field they can boost local manufacturing capabilities all along the value chain.
- Skills constraints can be tackled through a combination of short-term solutions such as the easing of immigration regulations and long-term reforms in education.
- South Africa should remove regulatory hurdles for the benefit of Independent Power Producers (IPPs) and Public Private Partnerships (PPPs) to resolve infrastructure constraints.