South Africa and the World Bank have signed an agreement that will boost the local business environment while also helping to enhance foreign direct investment into the country.
Signed on Monday in Johannesburg, the Advisory Services Agreement was signed between the Department of Trade and Industry (dti) and the World Bank Group.
The partnership is aimed at improving the business environment for domestic entrepreneurs and undertaking policy and institutional reform to enhance foreign direct investment inflows.
Business regulation, investment policy and promotion, and market regulation and competition policy are the focus areas of the partnership.
The advisory agreement formalises the partnership between the Government of South Africa and the World Bank Group to support the national reform effort led by the dti, the Department of Economic Development and National Treasury.
World Bank support to South Africa will be provided in partnership with the Swiss State Secretariat for Economic Affairs and the Prosperity Fund of the UK’s Foreign and Commonwealth Office.
The project will deploy a Country Private Sector Diagnostic, a standard World Bank Group tool to identify industry sectors that can attract significant domestic and foreign investments and deliver positive development impacts in the near term.
Director General at the dti, Lionel October, said the department will gain insight into best practice from the partnership.
“Support from World Bank Group and its development partners promotes South Africa’s growth agenda. The dti and InvestSA hope to gain insights into best practice from the partnership.
“I would like to assure you that we are committed to addressing the employment deficits that we face, and this will start with providing the right environment for the private sector to flourish. The four-year programme will be led and coordinated by InvestSA,” said October.
Delivering the State of the Nation Address (SONA) in February, President Cyril Ramaphosa committed government to ensure business competitiveness and an enabling business environment as a cornerstone of the drive for both domestic and foreign direct investment and the jobs that they are expected to generate.
Government has set the target of improving its current rank of 82/190 in order to be, within three years, among the top 50 economies in the annual Doing Business Report published by the World Bank Group.
The International Finance Corporation (IFC), which is a member of the World Bank Group, expressed its commitment to help South Africa in its efforts.
“IFC is committed to working across the World Bank Group to help South Africa achieve best practices and real impact in its reform efforts. The target set by President Ramaphosa of generating investment of $100 billion within five years is important. It sets the tone for the policies needed to attract foreign direct investment,” said Kevin Njiraini, IFC Regional Director for Southern Africa.
Early deliverables under the support programme will be inputs into South Africa’s Investment strategy.
Meanwhile, British High Commissioner to South Africa, Nigel Casey said the UK is keen on supporting South Africa to attract an additional $100 billion of investment into South Africa.
“The UK is the largest investor in South Africa, but we’re determined to build on that here and elsewhere in Africa. We also strongly support President Ramaphosa’s ambition to attract an additional $100 billion of investment into South Africa.
“Today’s announcement is part of how we are going to support government’s ambitions and deliver on our own ambition about the role that UK investors should play.”
The UK, Casey said, will make use of its R900 million Prosperity Fund in South Africa.