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Godongwana commits to reforms and removing red tape to boost economy  

Says local investment must come first, before trying to attract foreign investors.
Finance Minister Enoch Godongwana wants to make the country attractive to local investors. Image: Moneyweb

New Finance Minister Enoch Godongwana says topping his “to-do list” to bolster SA’s economic growth includes reforming the country’s electricity supply, addressing spectrum issues and improving logistics infrastructure and capacity at ports.

He reiterated government’s commitment towards addressing major structural economic issues, effectively backing his predecessor Tito Mboweni’s Operation Vulindlela reform plan, in a speech on Thursday at the Sunday Times National Investment Dialogue virtual event.

Godongwana struck a pragmatic tone, saying that an inclusive economy led by local investors is central to the country’s economic recovery plan.

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He added that this is key to addressing the high unemployment, poverty and inequality challenges the country faces.

“The [reform] plan envisages new investments in energy, water and sanitation, roads and bridges, human settlements, health and education, digital infrastructure, and public transport,” he said.

“We need investment, particularly domestic investment,” Godongwana stressed.

The minister acknowledged that the country has increasingly become unattractive to investors, citing never-ending red tape as the common deterrent. He said there needs to be a move to remove the regulatory burden that comes with investing in the country for an increase in the appetite for investment.

Grow local

Godongwana said the country’s economic recovery should prioritise attracting local investors and making the investment environment conducive for them before looking to global investors.

“One of the things we’ve got to do is to deal with the practical [ways] of making sure that business[es] that want to do business in South Africa can do it before we can travel and go and invite other people from overseas.”

“People in South Africa want to go about their business and invest and we must allow them to invest and then we can tell others they must come and invest in South Africa,” he added.

Fellow panelists offering a business perspective during the webinar concurred that government is not short of good ideas and policies, but fails at implementing them. This they agreed had contributed to the country’s continued sluggish economic growth.

Stimulus central to growth

Colin Coleman, co-chair of the Youth Employment Service (YES) and board member of retail giant TFG, said providing stimulus to the unemployed and to small businesses – and improving competitiveness, productivity and the cost of doing business – are necessary to stimulate economic growth.

“I have personally echoed the voices of countless others in civil society calling for income support for the 12 million unemployed,” Coleman added.

“This is not a radical, socialist idea; this has been trotted out by just about every western democracy – centrist or social democratic party – around the world.”

According to Coleman, these proposed cash interventions will be redirected back into the economy, supporting the unemployed and businesses, and stimulating growth.

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“If we don’t grow, there will be nothing to share, no nation to transform and our national debt will be the least of our problems,” he added.

However, Alexander Forbes chief economist Isaah Mhlanga held a different perspective, saying that further investment is the only way to generate growth and boost job creation.

“Social welfare cannot be achieved through cash transfers such as the basic income grant – we need savings and investment as the more sustainable way to actually achieve social welfare and that is the discussion we need to have,” Mhlanga said.

Another key sentiment expressed at the event was that an accelerated vaccination programme will remain a key driver of economic growth and that South Africa’s programme is just not moving at the desired pace.

Seven months into its vaccination programme, only 14.5% of the country’s adults are fully vaccinated. This is significantly lower than fellow Brics (Brazil, Russia, India, China, SA) members Brazil and India.

Brazil has reportedly fully vaccinated 42.2% of its adult population, while in India the figure stands at more than 17%.

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“The truth remains that vaccines are the single most important weapon we’ve got right now to combat the virus and to return to some form of normality,” said Dr Stavros Nicolaou, senior executive at Aspen Pharmacare.

“There’s no doubt that the vaccination programme of our country is at the centre of our economic recovery aspirations.”

Nicolaou added that South Africa needs to capitalise and build on the country’s vaccine manufacturing capabilities to remain attractive to global investors.

“We have strong technical capabilities in this country that can be harnessed to solve not only local and continental but also global problems,” he said.

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I’m in favour of reducing red-tape for foreign investors, but not at the detriment of our laws and regulations.

Foreign investors must ensure to meet BEE targets and they must be willing to invest in the long term future of SA.

There is money to be made in SA and with 30% of the population under the age of 14, there is a demographic dividend to be reaped.

The future is bright if we can get the right leaders to run SA. Unfortunately, the current ANC government continues to take their instructions from Stellenbosch.

Effy — the demographic dividend you speak of is the wholesale looting as in Durban and Joburg recently ne !!!

North Korea school of economics graduate I see.

But, comical and entertaining AF! Great way to start the weekend.

Is there any other country in the world that dictates that a potential investor has to onboard x amount of a certain racial demographic, whether the necessary skills are available or not, and still expect to attract this investment?
And lets suppose this savvy investor can see very well that BEE is merely a ticket for the well connected, and will offer nothing in redressing past imbalances?
It’s at THIS point our investor takes his money elsewhere.
Simple as that.

The current and planned new BEE regulations are one of the biggest deterrents to investment. I can almost understand that the ANC cannot totally abolish these as that would be political suicide, but they must at least reduce the targets substantially. No foreign investor or local investor of the incorrect hue wants to build or invest substantially into a business in which they are the minority owner.

The least this government can do to stimulate investments is to reduce the targets to let’s say 10% employee ownership and 10% black owned. Also the BEE regulation should at least be changed to PBEE or more fairly PEE (replace black with poor). But this will not happen as the black elite are too eager to keep all the riches of BEE to themselves while leaving the majority of blacks behind.

So where are you investing your 30%? What businesses are you growing Mr EFF?

Foreign Investors! Be careful of the ANC, EFF… and their tax machine SARS

Instead of investment… we need sanctions just like before 1994!

At least the so-called Stellenbosch mafia are:

1) South Africans based in South Africa and have the best interests of our country at heart
2) Pay (not steal) huge taxes that benefit all South Africans
3) Run huge companies that employ the majority of our people
4) They’ve educated (through bursaries and the like) and upskilled thousands of South Africans
5) They don’t shout RET and then steal the very opportunities/funds meant to uplift our people.

Please tell me then Commissar, would you rather we get instructions from:

a) Stellenbosch
b) Dubai
c) Luthuli House

I await your revolutionary response.

I think you have completely misunderstood the concept of a “demographic dividend”

South Africa very much missed its demographic dividend window and we failed to entrench the benefits it would have created. Partly due to the ANC looting state pension funds to enrich individuals to billionaire status all in the name of BEE….what a joke

And you propose that we turn away foreign investment for racist ideologies when it is exactly those ideologies that is stalling our economy, enabling looting and handicapping companies?

Julius aka EFF Commissar ….BEE is simply put “Bugger all effort and enthusiasm”

BEE/AA is the RED TAPE that needs to be cut! (How does the ANC/EFF put it…”must”). Must be cut.

AA/BEE is apparently needed, because govt believes Africans cannot compete on equal footing / or are unable to uplift themselves, and thus needs artificial help. AA/BEE indicates that blacks cannot achieve anything, unless they’re helped.

Why are you afraid to remove AA/BEE? (Africans are better than that, and are able to achieve success on their own).

BEE is very simply White Economic Exclusion (WEE) There will never be any economic growth of this country when you continue to practice discrimination, it’s just that simple!

If the ANC would only listen to Stellenbosch (and to Other South-Africans truly wanting SA to succeed), things might just be a bit different….

Any person that invests his hard earned money into this collapsing economy must face the fact that he WILL lose money !!!

Don’t forget about the risk of having your hard earned money expropriated without compensation – the amendments to the constitution apply to all property. So after the racist ANC have run out of land to expropriate guess what will be next? Mines? Businesses? The first salvo has already been fired through the expropriation of mineral rights, which was packaged as custodianship to get it to pass constitutional muster.

And don’t forget that “our people” may decide to riot and torch the investment (after looting).

Can someone, anyone stop saying “let’s reduce redtape” and just do it. Announce exactly 1 x change and implement. I vote for a non contentious one.
1. Extend drivers licence so that it lasts 40 years.
Or maybe a contentious one
2. Drop this FICA rubbish that banks renew every 5 min even though it legally never needs to be renewed

Although I fully agree, there is just one problem. All this redtape is just so lucrative. Imagine the billions of rands “earned” by just enforcing compliance of all the arbitrary laws, bylaws and municipal ordinances

Lose your driver’s license card? No, problem. Just come stand here in the queue, fill out these few forms – oh yes, and go get four ID photos for R80 – from those photographer-entrepreneurs across the road in their Caravan, and come back and pay another R260 so we can employ these five other municipal staff members to process your application – we only need one employee to do the job, but what the heck, if we can create a few extra “jobs”, why not?

You together with the 1000 other who lose their cards per month make it very much worth our while

If Godongwana can reduce red tape, great, but the ANC CITIES, like Joburg and Durban, are gidongone already.

Just ask any developer about trying to get approvals or Rezoning through in these cities, and they will tell you the difficulties.

It’s a toxic combo of ANC corruption meeting ANC mismanagement, entitlement and cadre deployment.

It’s hopeless.

Whenever I see an anc headline like this I read it in the inverse and then asks myself if it’s more probable. This headline is a prime example.

Yip and not a single red tape strand was mentioned, typical lip service for the clueless governing party.

Wants local investment first, surely he knows that SA completes on a global level for investment both from local and foreign…

BEE has never lifted the anyone out of poverty, the man and woman who stay in the shantytowns have never benefitted from it only a few politically connected have.

The problem with BEE and similar policies is that they are based on Equality Of Outcome, that’s like driving a car from JHB to CPT then one you hit Western Cape change course that DBN.
What we need is Equality of Opportunity that will ensure that everyone starts at the same/similar point and where ever the final destination maybe it will be their choosing.

Start with Family Planning, the Pre School then Primary School and final High School.

Our 5 year old son is given so much opportunity in Sports, Academics, Travel, Music and pretty much ever imaginable category so that he can build a future of his choosing. The total monthly cost is about R25,000 a month, he is home schooled and takes parts in countless activities.

Every Parent needs to put as much effort into their children so that they are given highest possible chance of being successful.

But here the anc does not care, they only provide lip service to keep voters, nothing else really matters, not even paining their own staff. This article is more free advertising and lip service

BEE has lifted the connected ANC cadre out of poverty (well relative poverty – as defined by the ANC, i.e. anyone who is not a billionaire!) and Cyril who is seen to be a businessman by the journalists?

I disagree sadly, the anc still has a victim mentality which will always lead to poverty.

They are power drunkards who think that drinking more will sober them up , it never works.

So what’s happened to Cyril’s “envoy’s”? The one’s that was supposed to get him to his $100 billion target??

Sitting at home on full pay??? Last year FDI came to &3.9 Billion. A clear indication that there is not much interest or trust in this lot.

So Godongwana here has realized this and therefor thinks concentrating on the locals is lekker!!

Out comes the terminology again. Inclusive, Inequality etc. etc.

Well Godongwana I for one invests nada in this country. Reason????

Locals should own the economy in particular blacks. So own it and invest in it!!!
BEE is used to fleece those who dare invest in this country.
The country is run by thieves and has a FAKE justice system.

So good luck in finding the locals to “invest” or is it “fund” like in donate???

What these buggers are after is pension funds. That is the local that is lekker!!! Be careful. Take your money and run!!!

US recently introduced a basic income grant. Now all the low paid jobs like McDonalds can’t get workers as they would rather sit at home and live off their grants. Our lot will be no different. There has to be an incentive to work and hunger is a good one.

I’m not for a universal basic grant, but now that you mention it may make the likes of McDonald’s and Burger King go belly-up, I’m seriously considering saying, “Sign me up!” Anything to see them go is worthwhile considering.

Give this man a Bells!

I am not sure the USA as a whole has introduced the Universal Basic Income system (although I know some states have a form of it). This is not to take issue with your statement; I simply would like a reference for my own edification. And I agree with the general gist of what you are saying.

I am a firm believer of UBI and the pros outweigh the cons, the proof is there and it’s the reason more and more states/countries are experimenting with it.

UBI hardly discourages people from working, infact people tend to invest in educating them selves and that allows them to find better paying jobs. With the 4th Industrial Revolution taking place jobs like Cashier; Driver; machine operator and cook will will be replaced by robots.

Other positive results of UBI includes: people leaving abusive relationships, helping recipients pay off debts, healthier eating, career changes, pursue activities which bring about happiness… Actually there are so many that I would rather encourage people to read Raising the Floor.

minister even before talking about “removing red tape” please spell out / define clearly what is understood as “red tape” in your speech.

“red tape” is covering such a wide field especially in the current anc setup that it must be spelled out clearly what one has in mind when it comes to “red tape”. my main “red tape” is for sure bee

on top of it: just by making the statement “to get rid of the red tape” the minister is actually admitting that there is red tape – question is: for what is there admitted red tape whilst it is actually strangling sa’s economy to its death – who is getting sideline money from some cra??y red tape laws??? or is it there just to be spiteful towards the private sector???

The problem since the “new dawn” has been that where the government has had good ideas they have only stayed at talking and have not implemented anything of significance. And where they have had bad policies they have held ground and are hell bent on implementation. One example is the spectrum issue which has been talked about since the mid to late 2000’s yet we are in 2021 and nothing has really been implemented, yet regarding EWC which needed to be scrapped it is instead being rushed through parliament with the ANC so keen to get the EFF’s support to implement this.

I remember Pravin Gordhan saying the same thing since his first stint as FM.

“Godongwana struck a pragmatic tone, saying that an inclusive economy led by local investors is central to the country’s economic recovery plan.”

What he actually means is that we cannot attract foreign investors but we have locked in 60-70% of local investments through forex control on retirement savings.

The party that got us in this mess has got no hope of leading us out of it. Vote for anyone excepting the ANC-EFF partnership.

Cut our tax brackets with 10% and see the investments and savings taking place. There will be a lag, but the taxes will come back in other forms like VAT etc. in months afterwards.

Stop this stupid double taxation rule when working overseas!!! The guys working overseas are putting their money to use in SA, obviously not all of it, but a lot goes back to SA.

Candidate for “Mamparra of the Week” award? Mind you, being a cANCer card-carrying member, maybe “Mamparra of the Hour” instead?

Yes because foreign investment is only here for the slave labour. Amazon here to steal indigenous land and employ engineers for way cheaper than silicon valley. I don’t hear Microsoft paying their engineers any more than the it company down the road. Foreign IT actually set the precedent of minimum wage for engineers. Maybe tesla would actually pay people proper wage their cars are more expensive. Plus you think the red tape was going to be a bargaining chip but these investors decided not to play ball and would rather loose shareholders then to play to the tit for tat sound track.

Stop ignoring the BEE elephant in the room! You talk of an inclusive economy, what a cheek! An inclusive economy is where all races of a nation can participate in the economy on a fair playing field, where there is fair trade for all regardless of skin colour! An exclusive economy is where legislation is put in place to give the majority an unfair advantage over a minority!

The whole debacle of BEE is what’s causing all the red tape for foreign investors. Why would they want to set up business in a country with so much BEE red tape when they can set up in anyone of our neighboring states and not have to deal with that headache!

Wake up, BEE is killing our economic growth!

White Monopoly Capital is neither a slogan nor an abstract academic concept. It is the greatest driving force of all aspects of life in S.A. since 1652. Your Sandton blinders are so sad. Go to Alex.

How about focusing on increasing the competence of local authorities. I am having constant billing issues and it has taken the municipality five months so far to sort out my bill on a property I sold and still nothing is sorted out. So I have to go stand in a queue to try and get them to attend to it for the third time. I don’t have much hope that Cyril’s speech will deliver any positive results.

What the man is saying is beautifully simple and totally market-orientated. Seems the blinkered nationalists can’t process and onboard it. So..In a nutshell:

Enable and encourage the average citizen to improve their savings rates, this will translate into exponential growth in local investments.

This scenario will then enlighten government as to what the priorities in areas such as Infrastructure, Energy, Environment, Industry and Society are according to the private citizen consensus voting with their investment ronds.

These will be market-driven channels of investment that can be supported and encouraged by third party organisations and corporations, such as the government and these multinational interests et al.

A lot wiser position than yesterdays article in which leading SA banks suggest we should stop saving so much and start borrowing and spending mindlessly again.

In short, let the citizens money talk, and the bs will walk… QED.

The way I see it: if you can entice foreign investors to invest in SA, the local investors will be eager to invest locally for the simple reason that the local investors will come to the conclusion that SA must be a good place to invest.
It is a folly to believe local investors alone will make SA prosper and only the foolish will invest all their money locally, if at all.

Sigh …. is there an election coming up?

Here’s an idea, remove the RED from YOUR communist ideology and politics along with your manic determination to take South Africa down the road of economic ruin, oppression, tyranny and poverty such as the likes imposed on the people and citizens of cuba and venezuala!

Your anc elite live high on the high of free market taxes but fail to en join the citizens to whom you promised “a better life for all” under marxist leninist thuggery.

PS After 27 years of protected and sheltered employment and appropriation by your “our people”, your bee laws are now nothing short of racist and evidence of the anc’s intentions to perpetuate their own brand of racially determined apartheid, which the world nations still recognise as “a crime against humanity”!

After killing the economy over the last 25 years with onerous policies like B E E and red tape (creating “gubment” jobs, he now has the answer????????? Hey look hell froze over :-)Junky, unemployed, uneducated, and racist. That’s what the ANC brought. Enjoy

End of comments.

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