Tuesday, April 19, 2011

South Africa targets $17bn investment bonanza

South Africa expects 115 billion rand ($17 billion) worth of investments flowing into Africa's biggest economy over the next three years, the trade and industry minister said on Tuesday.

Rob Davies told parliament the figure was a “realistic target” and the deals would come from the emerging market BRICS powers as well as Japan, Germany, France, the United Kingdom, the United States and countries in the Middle East.

“We anticipate that this work programme will translate over the next three years into an investment pipeline of projects valued at R115 billion,” he said.

The past year saw investments worth 28 billion rand flow into South Africa, creating approximately 13,000 jobs.

Foreign investors have been cautious about sending capital because of growing concerns over corruption and the country's rigid labour market, which makes producing goods more expensive when compared to other emerging economies.

Turning to international trade, Davies said the stalled Doha Round of talks could collapse. “Renewed efforts to conclude the Doha Developmental Round this year appear to have come up against major, and perhaps fatal, obstacles,” he said.

Major stumbling blocks include bigger economies wanting greater access to developing countries in the areas of industrial tariffs and services, while emerging states are wary of acceding to this demand without reciprocity.

South Africa recently joined the BRICS grouping that also includes Brazil, Russia, India and China.

Source: Reuters