27 JUNE 2022
“SOUTH AFRICA: ECONOMIC RECOVERY POST-COVID”
Programme Director, Mr Paulo Ramalho, City Councillor for Economic Competitiveness
Ambassador Mmamokoena Gaoretelelwe, Head of the South Africa Embassy in Lisbon
Mr António Silva Tiago, Mayor of the Municipality of Maia,
Mr Luís Ribeiro, President, Associação Empresarial de Portugal
Mr Antonio Schneider, former Honorary Consul of South Africa in Porto
Mr Carlos Mendes, President, Associação Empresarial da Maia,
Mr Filipe Moutinho, Executive Managing Director, Sodecia
Mr David Schneider, new Honorary Consul of South Africa in Porto
Ladies and Gentlemen
I wish to thank you, Mr Mayor and the people of Porto for the warm reception and hospitality extended to the South African delegation since our arrival. Indeed, it is a great honour to be present in Porto where we can work toward further strengthening South Africa and Portugal relations in the fields of trade and investments in various sectors.
Thank you for this opportunity to share some insights on a partnership between South Africa and Portugal that has great potential to transform the lives of our citizens and the fortunes of the businesses represented by the leadership gathered here in person and online.
We are grateful for the warm hospitality accorded to us during this visit and sincerely hope that we can reciprocate when you visit the beautiful shores of my country. South Africa and Portugal share a rich history, with approximately 500,000 South Africans of Portuguese descent and about 200,000 Portuguese nationals who reside in South Africa permanently.
Ladies and Gentlemen
I had the honour to co-chair the 7th Bilateral Consultations between South Africa and Portugal, which took place last Friday, the 24th of June in Lisbon. During my discussions with the Secretary of State of Foreign Affairs and Cooperation, Mr Francisco André, we covered several important areas including education and training, science and technology, tourism, oceans and most importantly, trade and investment.
Earlier this year in March, South Africa concluded its 4th Investment Conference. President Cyril Ramaphosa’s investment drive to attract R1.2 trillion over a period of five (5) years has thus far achieved 95% of its ambitious target. Since the 1st Investment Conference, South Africa has attracted investment commitments across a broad range of economic sectors, including, mining, manufacturing, agriculture and the digital economy. Through today’s seminar and platform, I am convinced that we can find ways of increasing trade and investments between South Africa and the Republic of Portugal, which would be to the benefit of both our countries’ citizens.
I wish to reiterate that as Government, we remain committed to promoting our national priorities through our National Development Plan (NDP) to address and overcome the triple challenges of unemployment, inequality and poverty. In addition, the Economic Reconstruction and Recovery Plan (ERRP) forms part of extraordinary measures that the South African Government is undertaking to restore the economy to inclusive growth following the devastation caused by the Covid-19 pandemic.
Currently, our trade with Portugal is governed through the EU-SADC Economic Partnership Agreement (EPA), which makes it easier for people and businesses to invest in, and trade with each other, and to encourage development across Southern Africa. The flow of goods and services between South Africa and Portugal has grown steadily over the last few years, even amid the Covid-19 pandemic. From 2012 to 2021, total trade between South Africa and Portugal increased from approximately R2 billion in 2012 to approximately R7.5 billion in 2021. The trade balance is currently skewed in favour of Portugal and we are hopeful that events like this will assist us to address this imbalance.
It is important as we strive for a mutually beneficial trading relationship to intensify cooperation in value-added sectors such as agro-processing, infrastructure, minerals beneficiation, services, technology and skills transfer, health care, automotives and aquaculture. As the drivers of our commercial agenda, the onus is upon business to seek a more balanced trading portfolio.
Ladies and Gentlemen
We wish to applaud the significant investments that Portugal has made into South Africa over the years.
Investment is critical for the economic growth and development in an economy and the South African government is amplifying its efforts to attract quality investment that will assist in achieving our economic goals and objectives of enhancing the country’s industrial capacity.
South Africa remains an attractive and lucrative investment destination, where the return on investments are high, opportunities abound for both foreign and domestic investors.
We would like to mention, in particular, the R200 million investment by Sonae Auraco in the forestry sector in the province of Mpumalanga and the partnership between CR Moulds Portugal and MCR Plastics in the Eastern Cape (Gqeberha) and Gauteng (Silverton), a black owned company in South Africa to service the automotive sector. The latter project is significant because it aligns with our government’s priority to transform the automotive industry and to make it more inclusive.
The growth in the Portuguese business community in South Africa is a great demonstration of confidence in the South African economy and in the country as an attractive destination for significant investment. South Africa is a thriving democracy with an advanced and diverse economy, a sophisticated and well-regulated financial sector, and extensive transport, telecommunications and energy infrastructure. As Government, we are working hard to create a dynamic and enabling business environment that will promote greater productive investment in our economy.
S&P Global announced that it had upgraded South Africa’s economic outlook to “positive” from stable” due to improvement in the country’s fiscal position, boosted by an increase in prices of commodity exports, which, in turn, improved tax revenues. This piece of positive news came on the back of S&P Global’s peer, Moody’s, making a similar move in April when it upgraded South Africa’s outlook from “negative” to “stable”. Moody’s earlier this year revised South Africa’s economic outlook from negative to stable.
This upward revision is attributed to the decisive steps taken by our Government towards more predictable and transparent policies. This signals that South Africa’s macroeconomic and political fundamentals are in place, reinforcing our position as a credible investment destination.
It is within this context that we have embarked on this visit to Portugal to convey the message that South Africa is open for investment. We invite our Portuguese friends to follow the lead of the many EU companies that have already invested in the country.
Understanding that the key to economic growth and job creation lies in much greater levels of investment. As mentioned earlier, South Africa has embarked on an ambitious investment drive, which aims to raise $100 billion in new investment over five years. We have already achieved 95% of this target in investment commitments over the last 4 years. Next year will be the last instalment of the Presidential Investment Conference and we hope to see more announcements from Portugal at the event.
As part of the investment drive, we are intensifying efforts to improve the business environment.
We have put in place a very attractive package of incentives administered by the Department of Trade Industry and Competition and access to these incentives are facilitated by Invest South Africa. This institution has been established to assist potential investors in identifying opportunities and facilitating a seamless investment process.
Mr Rui Fragaso of the South Africa – Portugal Chamber of Commerce has joined us today and will focus on specific areas for the interest of Portuguese business. He will also be available later to address any queries you may have. Aligned to our investment drive, ten (10) Special Economic Zones (SEZ) have been designated in different parts of the country, each with their own particular advantages and focus. Companies that invest in SEZs benefit from a reduced corporate tax rate and the employment tax incentives. The support measures that South Africa offers in these SEZs are comparable to our global competitors, if not better.
In 2021, Africa witnessed the launch of the African Continental Free Trade Area (AfCFTA), the world’s largest common trading area since the establishment of the WTO. The Free Trade Area, encompassing 54 states of Africa, seeks to boost intra-Africa trade, eliminate tariffs and facilitate investments. This landmark agreement by African leaders creates a continental free-trade zone with a combined Gross Domestic Product (GDP) of USD$2.6 trillion and a market of over one (1) billion people. This makes South Africa an even more attractive investment destination as a gateway into our Continent.
As the most industrialised and diversified economy on the African continent, South Africa provides an ideal gateway into this vast continental market.
As I conclude, I am encouraged by the enthusiasm of Portuguese and South African businesses.
I sincerely believe that the strong ties of goodwill between our countries will indeed translate into economic gains for all our people. As the South African government, we remain committed to creating a business environment that is conducive towards supporting trade and investment.
As the world prepares for a post-Covid era, we are aware of the responsibility we have to realise a vision of global peace, prosperity and equality. We are aware that it is only through effective and meaningful partnerships between countries like Portugal and South Africa that we will be able to advance this cause.
We look forward to welcoming you to South Africa to see for yourself the great opportunities that South Africa has to offer.
I thank you
Content Credit: Dirco
Photo Credit: Dirco