The cash keeps rolling in. China has pledged $14.7bn towards President Cyril Ramaphosa’s $100bn target for new investment in SA.
This follows $20bn from Saudi Arabia and the UAE, and $10bn from a Mercedes investment in London.
So in just a few short months, President Ramaphosa has received pledges amounting to almost half of his target. A key question is whether they will be followed through with actual, real investments.
Ceremonies and pomp abounded. Tuesday, as the Chinese Leader President Xi Jinping marked the latest stage of an Africa tour with a State Visit to SA, on the eve of the BRICS Summit.
“We have signed several agreements and memoranda of understanding that are intended to further deepen our relations, including investment commitments to the value of US$14.7 billion.
“President Xi Jinping has indicated that China is ready to invest and work with South Africa in various sectors, such as infrastructure development, the ocean economy, green economy, science and technology, agriculture, environment and finance,” said President Ramaphosa after the talks.
Some of the agreements signed are in trade and industry, agriculture and science and technology, including a visa agreement.
Several South African State-owned companies also benefitted. These include Transnet and power utility Eskom, the latter bagging a $2.5 billion loan agreement with China's Development Bank.
Eskom CEO Phakamani Hadebe said that the $2.5 billion loan agreement is strategic for both investment and capital growth.
"At the beginning of the year, we indicated we need to borrow R72 billion to operate efficiently. Since January, we have raised R57 billion. Today we signed $2.5 billion. This amount moves our funding from 22% to 66%,” he said.
Total trade between South Africa and China has been growing since 2009, moving from R118 billion to R271 billion by the end of 2013.
However, while there is a trade imbalance between China and South Africa, both countries have implemented various mechanisms to address these discrepancies, President Ramaphosa said.
Both South Africa and China hope that these newly-signed agreements and investment commitment will help balance the trade between Pretoria and the Asian giant.
“We also recognised that although trade figures have grown steadily over the past few years, bilateral trade has not reached its potential. We have thus explored avenues for increasing trade, identifying sectors for future investment and promoting tourism,” said President Ramaphosa.
President Xi described South Africa as a “good brother and comrade. South African is on a new journey for national development. China and South Africa relations are at a new historical departure point.
”Just now, President Ramaphosa and I had a very productive discussion on how to take our Comprehensive Strategic Partnership (CSP) to new heights,” he said.
The two countries also committed to further increase development cooperation in infrastructure, trade, technology and financial cooperation to unlock collaboration potential.
“We support the proposed investment summit and we will be taking active measures to support the government of South Africa in achieving its developmental agenda,” said Xi.
President Xi called for strengthened collaboration and strategic coordination in international organisations such as the UN, G20 and BRICS, in order to promote the reform of the global governance system in a joint effort to advance the fundamental interests of African and other developing countries.
This was echoed by President Ramaphosa, who said both countries will continue to advance the centrality of the UN and other multilateral fora in resolving issues of global concern.
“In 2019, South Africa will commence its two-year non-permanent seat on the United Nations Security Council. South Africa and China will continue to work together in full accord over the need for the reform of the structures and modalities of the work of the UN,” said President Ramaphosa.
SAnews contributed to this piece
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