September 4, 2019 / 5:13 PM / 3 months ago

Business leaders urge South Africa's Ramaphosa to reform faster

CAPE TOWN (Reuters) - South African business leaders on Wednesday urged President Cyril Ramaphosa to push through reforms faster to boost the economy and curb investment outflows, as executives and policymakers gathered for a continental economic summit.

FILE PHOTO: South African President Cyril Ramaphosa attends the opening day of the International Labour Organization's annual labour conference in Geneva, Switzerland June 10, 2019. REUTERS/Denis Balibouse/File Photo

Frustration is building in Africa’s most industrialised economy. Ramaphosa has promised sweeping reforms, but growth remains below 1% a year and investors dumped 63 billion rand (3.4 billion pounds) of its assets this year.

Ramaphosa and his senior ministers are hoping to use the World Economic Forum’s Africa summit starting on Wednesday in Cape Town to change investor attitudes to South Africa.

“We have to get the pace of delivery in a different mode,” Absa Chairwoman Wendy Lucas-Bull said on the sidelines of the WEF summit. She urged government to stabilise the country’s fiscal position more quickly and fire officials who had been implicated in serious wrongdoing.

“If individuals have been caught with their hands in the till they have to go,” she said.

South Africa was in a perilous position after this year’s investor outflows, which compare to inflows of around 20 billion rand in the same period last year, said Aarti Takoordeen, the Johannesburg Stock Exchange’s chief financial officer.

“Investment follows the narrative, and where the narrative is sound and predictable, investment will flow naturally,” Takoordeen said, adding that South Africa was competing against other emerging markets for the same investment flows.

“Any investor wants to see action,” she said.

Central bank governor Lesetja Kganyago said separately that South Africa needs to remain focussed on structural reforms to lift potential growth and reduce unemployment.

Unemployment surged to its highest in a decade in July.

“We should remain focussed on structural reforms to lift potential growth rates so you can bring down structural unemployment,” Kganyago told Reuters.

“I keep on saying this to my fellow countrymen, you can’t beat an economy that is not growing, and beat it up and expect it to create jobs, it can’t happen. Jobs are an outcome of growth,” he said.

Ramaphosa said earlier that stimulating growth and restoring the credibility of state institutions was an arduous task, given the country’s apartheid past and problems inherited from his predecessor, Jacob Zuma.

“Implementation is my second name, and I want to see implementation all around,” Ramaphosa said. “There is a great deal of impatience in our country, we understand that.”

Ramaphosa, who is on a drive to attract $100 billion of new investment, said he was focussed on moving the country into the top 50 on the World Bank’s ranking for ease of doing business.

Reporting by Alexander Winning and Wendell Roelf; Editing by Larry King and John Stonestreet

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