OK, Tell Me More?
The United Arab Emirates (UAE) plans to invest ~R135 billion into the South African tourism and mining space.
Hmm, Go On?
You may remember that President Ramaphosa set out to bring in over R1 trillion in investments into South Africa over the next five years. The initiative aims to help achieve his vision for SA economic growth of 4.5% per year – more than double the growth rate estimates for 2018. The investment seeks to combat unemployment, creating between 1 – 1.5 million new jobs. This will be a godsend to the locally unemployed population of ~10 million.
Where’s The Money Coming From?
The President and his team traveled to Nigeria, UAE, and Saudi Arabia last week. UAE committed the funding during this visit and also complemented South Africa on its internal peacekeeping efforts. Continued travels to different nations will see the team selling SA as “an investment destination with unrealised potential”, according to Ramaphosa.
The president went on to say, “Economic conditions in our country are changing. We are encouraged by the growth in business confidence over the last few months, the strengthened Rand and improved growth estimates.”
What’s Hampering The Process?
Things are turning around slower than initially expected. Unemployment remains an issue with constrained job growth in SA. The Rand and local stock exchange are suffering due to global investors moving their capital to less risky nations off the back of the trade war between the US and China. And finally, significant concern around land expropriation without compensation continues evoking panic within the market.
On the latter point, commentators are afraid of SA becoming the next Zimbabwe, to which Ramaphosa has promised that this won’t be the case and an economically sensible land expropriation programme will be set up. Only time will tell, but we’re another step closer to that ~R1 trillion target.