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Fight corruption, sort out SOEs, investors tell Nene's delegation

Mar 14 2018 05:45
Carin Smith

Cape Town - The importance of a continued fight against corruption and addressing inefficiencies in government was emphasised by investors and ratings agencies during meetings with a high-level SA delegation in London, according to Business Unity South Africa (BUSA).

Commitment to greater policy certainty and fiscal consolidation were regarded as vital for attracting investment.

BUSA is part of the SA delegation, led by Finance Minister Nhlanhla Nene, that is undertaking a week-long investor roadshow in London, Boston and New York. The purpose of the roadshow is to continue developing relationships with international investors and to provide them with an update after Budget 2018.

BUSA said in a statement on Tuesday that investors and ratings agencies would especially like to see corruption and inefficiencies at state-owned enterprises (SOEs) addressed. They highlighted the importance of stabilising the financial status and governance of SA’s struggling SOEs, like Eskom.

Moody’s Investor Service will decide on SA’s credit rating on March 23 after placing the country on a 90-day review for a downgrade in October. It is the last of the three large ratings agencies to still rank South Africa as investment grade.
 
SA’s high youth unemployment rate, clarification on the process to deal with land expropriation without compensation, labour relations stability and the costing and funding of free higher education were among the other issues raised by investors.

“As expected, policy certainty and political stability have been identified as a prerequisite for long term investment. Engagement and transparency with social partners in Nedlac, where policy is developed with the benefit of evidence based analysis, will ensure greater buy-in and contribute to policy certainty for business,” said BUSA CEO Tanya Cohen, who is attending SA's International Investor Roadshow in London.
 
BUSA vice president Martin Kingston said Team SA, with its strong representation from National Treasury, labour and business, has addressed issues raised clearly and comprehensively.

"As business, we remain committed to play our part,” said BUSA president Jabu Mabuza, who is also chair of the board of Eskom.

The delegation also includes Deputy Finance Mondli Gungubele; Treasury director general Dondo Mogajane; Business Leadership South Africa CEO Bonang Mohale and Dennis George, general secretary of the Federation of Unions of SA as well as officials from National Treasury and the SA Reserve Bank.

George told Fin24 by phone from London that bondholders and other investors want to hear it straight "from the horse’s mouth", from business, labour and government. He said there is a sense of “Ramaphosa euphoria” in meetings, but there’s also an acknowledgement that SA faces huge problems.

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