China would invest $14.7 billion in South Africa President Cyril Ramaphosa said on Tuesday after talks between the two countries, news that sent the rand 1% firmer.
Speaking at the same event, Chinese President Xi Jinping said the world’s second-biggest economy would take active measures to expand imports from South Africa to support development in Africa‘s most industrialised economy.
Ramaphosa, who has promised to revive the economy since becoming president in February and after winning the leadership of the ruling African National Congress last year, said “Xi has indicated that China is ready to invest and work with South Africa in various sectors.”
The rand firmed after Ramaphosa’s announcement, spurred by offshore demand for the currency, traders said.
South Africa‘s struggling state-run power firm Eskom, which swung to a full year loss on Monday, received a $2.5 billion loan from the China Development Bank.
Ramaphosa has focused on revitalising Eskom, Africa‘s largest public utility, which was embroiled in corruption scandals under former president Jacob Zuma and narrowly avoided a liquidity crunch early this year after banks halted lending. Zuma has denied wrongdoing.
South Africa‘s logistics utility Transnet also received a cash injection, as well as other sectors of the economy, officials said.
Xi said China and South Africa were important emerging economies with similar perspectives on many global issues.
“Hence the need to strengthen cooperation,” Xi said.