Reading Time: 3 minutes
Brand South Africa says the aim of South Africa’s participation at the World Economic Forum (WEF) in Davos, Switzerland, was to shift the mindset of investors from uncertainty to confidence.
As the WEF comes to a close, South African attendees say ensuring policy certainty was top of the agenda. Team South Africa says the big questions from investors were around energy security and logistics which are currently the major challenges facing the country.
Climate change and geopolitical tensions affecting the global community were also major topics at this year’s Forum.
Brand South Africa says efforts to sell the country as an investment destination were anchored by a detailed commitment to deal with the country’s challenges. Acting Brand SA CEO Sithembile Ntombela told SABC News that transparency topped the agenda for South Africa going to Davos. The aim was to acknowledge the challenges the country is facing, and also assure investors of interventions to overcome these difficulties.
The conference of global leaders in politics, business, academia and civil society wraps up on Friday.
The local economy is battling structural challenges such as electricity supply constraints and logistics inefficiencies that are hindering business activity and dampening investor confidence.
Brand SA says this situation is not unique to South Africa.
The organisation says with 2024 being an election year in South Africa, investors also want to know what to expect on the political front.
Acting CEO of BRAND SA Sithembile Ntombela says, “They have been asking about the energy crisis, what are we doing about it, but they also understand that it’s a situation or rather a challenge that is not peculiar to SA.
“Countries like us, India as well, they are all going for elections and investors are looking to see the volatility of these economies as we proceed towards that,” Ntombela explains.
Exxaro, a player in the mining sector, says 2024 holds the promise of better economic performance, which can happen if structural reforms are implemented and there is policy certainty.
CEO EXXARO Resources Dr Nombasa Tsengwa says “We also expect Eskom will move, they have a new CEO. We expect stability and then the legislation that follows. We expect that to come, from a Transnet perspective. Same thing we expect to see movement from the government, from a policy point of view, protecting investments that we want to make, making sure that the concessions that we have talked about with the government on the rail, making sure that as the private sector, because we know the state is choking at the moment from a financial perspective, we need to take responsibility that is not risky to our investors to makes sure that if there is an agreement, or clarity between myself and the regulator when I invest, what am I investing? For how long am I having rights over the rail? Sharing mechanisms are going to work.”
Climate change, characterised by extreme weather patterns, has also been a topic of interest.
CEO of Old Mutual Iain Williamson says, “We’ve certainly borne the impact of bigger claims, particularly from the flooding. So if you think back a couple of years ago, the floods in KZN, and the two biggest weather risks are the flooding and the hail. So hail damage and floods, all we’ve seen is the increase in claims and the question. We are starting to ask ourselves whether that is a cyclical thing which is normal or are increasing prices because this is going to cost more. But the world is thinking about this, and the reinsurers that we share the risk with are also thinking about this, there is a lot of very technical work that we are working on around forecasting ….. claims in the future.”
Experts say they are not declaring victory just yet, even though inflation is seen to be moderating. This is because global markets are expecting interest rates to start falling this year. This follows an aggressive cycle of rate hikes over the past two to three years due to high inflation during this period.
Addressing delegates at WEF, Deputy Managing Director of the International Monetary Forum, Gita Gopinath says she expects inflation to start coming down in the second half of the year.
“What is uniformly true is we have households and corporations with stronger balance sheets, and we’ve seen effects, but we’ve also seen resilience. Labor markets are slowing, but at a much more gradual pace, which is why, you know, I think that we at the IMF feel like a soft landing scenario probabilities have gone up quite a bit because we’ve had inflation come down without needing that much of a loss in terms of economic activity.” -Additional reporting by Naledi Ngcobo
Source: SABC News (sabcnews.com)