US Treasury is bullish about SA economy

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Cooperation between the government and business is boosting South Africa’s prospects, despite the myriad challenges the economy faces, US Deputy Treasury Secretary Wally Adeyemo said. Adeyemo, who spent five days in South Africa meeting government and business officials, noted that the nation’s economy is growing despite obstacles including an electricity shortage and dysfunctional ports and freight-rail lines. That, he said, is partly due to companies collaborating with the state to fix the problems.

“Coming to South Africa has left me more bullish on the South African economy than before I was here,” he said in an interview in Bloomberg’s Johannesburg office on Friday. “If they’re able to reduce those headwinds, which they have the capacity to do, there’s real opportunity for them to grow beyond expectations,” he said of the country. 

Adeyemo’s visit comes as the US and South Africa try to mend relations strained by Pretoria’s refusal to condemn Russia’s invasion of Ukraine and allegations — denied by the government — by the US ambassador that the African nation may have supplied arms to Russia. South Africa is also part of the BRICS political bloc alongside the US’s geopolitical rivals, China and Russia. 

The US is a major investor in South Africa with more than 600 of its companies supporting 230,000 jobs in Africa’s biggest economy, according to Adeyemo. US firms including Ford and WalMart have invested in South Africa. America is the country’s second-biggest trade partner after China. 

Investors have been concerned that the diplomatic spats would disrupt that relationship. Adeyemo said that given ongoing talks between the two nations and the depth of US investment, those concerns are unfounded.

South African businesses “want to do more with the United States, more with the UK, more with Europe,” he said. “Both sides recognize the importance of the value of relationship given our shared values and the importance of South Africa to the United States.”