Remarks by Deputy President Shipokosa Paulus Mashatile at JP Morgan, London

Managing Director, Andre Ross;
Ministers and Deputy Ministers;
Executive Director Head of Subsidiary Banking Sub-Saharan Africa, Hemisha Lakhoo;
JP Morgan executives;
Distinguished guests;
Ladies and gentlemen;

I am delighted to welcome you all to this JP Morgan-hosted event, where we come together to discuss the crucial topic of collaboration to improve the financial sector.

In today's rapidly evolving landscape, collaboration is not just an option but a necessity for driving innovation, fostering growth, and ensuring the sustainable development of the financial industry.

As we look around us, we see how interconnected and interdependent the global financial ecosystem has become. No longer can any single entity, whether it be a bank, a fintech company, a regulatory body, or a government, hope to address the complex challenges we face on its own. Collaboration is the key to unlocking new opportunities, mitigating risks, and delivering better outcomes for all stakeholders involved.

As Government, we firmly believe in the power of collaboration. By working together with our industry partners, regulators, and stakeholders, we have been able to drive positive change, innovate our products and services, and create value for our customers. However, we acknowledge that we still have a significant amount of work ahead.

Today, I urge all of us to commit to a more collaborative approach in tackling the pressing issues facing the financial sector. Whether it is enhancing cybersecurity measures, promoting financial inclusion, or developing sustainable investment strategies, we must be willing to share knowledge, resources, and expertise to achieve our common goals.
 
Let us remember that collaboration is not just about working together; it is about leveraging our collective strengths, embracing diversity of thought, and building trust and transparency in everything we do. By fostering a culture of collaboration, we can drive positive impact, foster innovation, and create a more resilient and inclusive financial sector for all.

This engagement is aimed at strengthening bilateral trade and investment relationships between UK and South Africa, focussing on growth opportunities. The global economy is rapidly evolving; therefore, adapting and innovating are crucial to seizing these opportunities. 

The focus is on understanding the potential for growth in the global economy. It is our responsibility as leaders in our various regions to cultivate an environment that promotes entrepreneurship, stimulates innovation, and propels inclusive prosperity.

South Africa is committed to creating an enabling business environment that attracts investment, spurs economic development, and creates the much-needed job opportunities. We understand the significance of collaboration with countries like UK, which share our values and aspirations for a better future.

As a country, we want to enhance our exports of valuable goods and services to UK. It is admirable that the two countries already trade in food and beverages. However, I must admit that the global pandemic has hindered our trade partnership, leading to only modest progress. We must identify measures to expedite international trade and investment. I firmly believe that we have the potential to significantly boost the volume and value of various products, including those produced.

Ladies and gentlemen,

One of the many reasons to invest in our country is the fact that we have had political stability and peaceful elections since 1994. We emerged from a peaceful election and formed a Government of National Unity.

All parties in the Government of National Unity pledge to uphold the 10 fundamental principles of respect for the Constitution, non-racialism, social justice, human dignity, nation-building, peace and stability, accountability, evidence-based policy, professional developmental public service, and integrity. 

We further consider the following factors as key drivers for investing in South Africa: quality infrastructure and logistics, the largest presence of multinationals in Africa, a well-developed and diversified manufacturing base, a lucrative emerging market, favourable market access to the global market, an innovation and technology hub, abundant natural resources, Africa’s leading financial hub, a young labour workforce, and excellent quality of life.

Ladies and gentlemen,

South Africa has adopted the Economic Reconstruction and Recovery Plan, prioritising spending across infrastructure, providing employment stimulus to sustain jobs, and implementing measures to deepen local industrialisation. South Africa's Economic Recovery Plan is underpinned by a social compact between the government, business, and labour, as well as sector representatives.

In order to facilitate a rapid economic recovery, South Africa prioritised policies and initiatives designed to stimulate industrial development, such as Operation Phakisa and Operation Vulindlela. The Presidency and National Treasury initiated Operation Vulindlela, a collaborative effort to expedite the implementation of economic and structural reforms, thereby stimulating job creation and development.

Initiatives like this provide investors like yourself with opportunities to get involved in a variety of projects.

In terms of industrial growth, we are backing massive growth in local production to make South African exports more competitive.

A vital part of growing the industrial base is through the development of master plans for industries such as agriculture and agro-processing, renewable energy, and aerospace and defense. The securement of new investments announced at the annual South African Investment Conference further expands the industrial base.

To ensure the rapid expansion of energy generation capacity in South Africa, the government has announced various interventions. Eskom will divide into three distinct units for generation, transmission, and distribution.

The Department of Mineral Resources and Energy in South Africa has announced the procurement of an additional 6800 MW of solar PV and wind power through Bid Windows 5, 6, and 7. Future windows will provide an additional 3000 MW of gas and 513 MW of battery storage. The government has boosted private sector participation in energy generation by removing the 100 MW NERSA license threshold, a game-changing announcement for the industry.

Researchers have identified the hydrogen economy as a potential game changer for South Africa. The hydrogen economy is key to a just transition of the economy in 2050, with the potential to decarbonise various value chains and provide energy supply security. Investors are currently identifying various projects for potential future investments.

In addition to the investment opportunities in the energy space, South Africa wishes to explore cooperation for investment projects in sectors such as food technology, global business services, film, financial technology (fintech), and infrastructure in UK.

South Africa can benefit from UK’s expertise in the tech sector. South Africa is currently attracting a lot of back-office service operations from foreign companies. However, foreign companies from UK have been slow in relocating operations to South Africa. This engagement presents an opportunity to reverse this trend.

Regarding Fintec, UK possesses a substantial amount of capital that could significantly enhance South Africa's innovative Fintec sector. Furthermore, enhancing cooperation in the film space could benefit both countries' film industries. We urge UK to assist South Africa with the successful implementation of the projects, particularly the provision of requisite skills in these sectors.

Ladies and gentlemen,

There are real signs of early-stage entrepreneurial growth in SA, and there is already a lot of awareness of the potential partnerships and benefits to both countries.

Already, there are large numbers of foreign companies setting up service operations in South Africa. We're hoping to see more UK companies in our country.

Ladies and gentlemen,

South Africa and other African countries recently concluded the Africa Free Trade Agreement, which came into effect in January 2021. This agreement has created the world's largest free trade area, connecting 1,3 billion people across 55 countries with a combined gross domestic product value of US$ 3.4 trillion.

As South Africa, we are encouraging foreign companies to invest in South Africa and benefit from the free movement of goods, services, and people from South Africa to other parts of Africa. This is indeed a game-changer development for Africa.

Therefore, I encourage UK businesspeople to contribute to this development by establishing their presence in South Africa and conducting business with the rest of Africa from our stunning country, often referred to as a "gateway to the African market".

Ladies and gentlemen,

As you may gather from my address, South Africa offers several economic opportunities. I officially encourage UK businesses to visit our lovely country for business objectives as well as tourist to appreciate the beauty of our country.

I am confident that this visit will forge new partnerships, and unlock new opportunities for collaboration between UK and South Africa. Together, we can build a stronger, more prosperous future for our nations and contribute to the economic prosperity of our regions.

Let's work together to get the most out of our partnership and leave children and grandchildren a legacy of shared success and wealth.

I thank you.