Ramaphosa says state-owned firms to re-invest billions

Rajesh Jantilal | AFP | Getty Images

South Africa’s President Cyril Ramaphosa (second left) speaks with workers during a visit to a Volvo assembly plant in Durban on May 19, 2018.

According to Ben Payton, head of Africa at risk analysis firm Verisk Maplecroft, the speech signified Ramaphosa’s most important parliamentary appearance since his State of the Nation address in February. “It came just before the president’s 100th day in office, with Ramaphosa eager to demonstrate momentum in his drive to implement badly-needed reforms,” Payton added.

In the State of the Nation speech, Ramaphosa spoke of the need to “confront the reality” that South Africa’s state-owned enterprises simply were not making enough money to cover their costs.

Ramaphosa was sworn in as South African president in February after former leader Jacob Zuma stepped down amidst political pressure. He has pushed a pro-business agenda.

Land reform and implementing a national minimum wage are among the economic issues on Ramaphosa’s agenda as South Africa, the continent’s most industrialized economy, struggles with below-average economic growth ahead of elections in 2019. Ramaphosa has tasked himself with attracting investments worth 1.2 trillion South African rand.

Major investment from public companies is not unexpected, Payton explained, given South Africa’s need to upgrade its infrastructure. “But Ramaphosa provided very little detail around SOEs’ investment plans, suggesting that the headline figure has come before a credible plan to determine its realism.”

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