LOAD SHEDDING or not, Mzansi remains one of the best investment destinations.
This is according to Finance Minister Enoch Godongwana who was speaking at the Union Buildings, where President Cyril Ramaphosa was hosting his Chinese counterpart Xi Jinping ahead of the start of BRICS Summit on Tuesday, 22 August.
Godongwana, who chairs the BRICS (Brazil, Russia, India, China and South Africa) finance stream, addressed the importance of the summit and its potential economic benefits for Mzansi.
”Investors look at South Africa comparatively to other emerging markets. When you look at South Africa compared to other emerging markets, it is still one of the best investment destinations,” he said.
The minister said that there was still a lot to do to close the gap of uneven trade between BRICS members.
“You will see in the resolution today – which is not part of the BRICS debate, but is part of the bilateral discussion we are having – among other things is to say how do we close that gap,” he said.
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Godongwana said that he was not keen on being drawn into the "de-dollarisation" debate – moving away from trading with the US currency between BRICS partners and aligned states – and whether Mzansi was ditching the West.
He said the South African trade as it stands, is skewed in favour of the West.
“The current debate is how do we finance projects in each of the BRICS member states in their currencies. In other words, you must have seen the NDB (New Development Bank) has raised about R1,5bn. They are going to finance South African projects with that R1,5bn, although I believe it’s small. There is a huge gap because the pipeline is bigger than the R1,5bn. So, their finance still remains in dollars,” he said.
On Eskom debt, Godongwana said companies owned by the state usually apply for a guarantee from National Treasury.
He said that institutions such as the International Monetary Fund had already “pencilled in” the power utility as part of South Africa’s debt because the National Treasury had guaranteed R250 bn to Eskom.
