Finance Minister Enoch Godongwana
Photo by: Creamer Media's Donna Slater
Ahead of the departure of South Africa’s government delegation for Davos, Switzerland, to take part in this year’s meeting of the World Economic Forum, Finance Minister Enoch Godongwana said South Africa’s electricity crisis and high crime rates are chief among the challenges faced by the country, requiring urgent attention so the country can attract more investors.
Other areas of focus include balancing focus between the macro and microeconomic environments and appropriate policies and decisions thereto, as well as reducing the amount of burdensome “red tape” for foreign companies wanting to invest in South Africa.
Godongwana stated that government has been clear about its efforts to rebuild investor confidence and mobilise invesatment opportunities in South Africa.
However, he noted that, without dealing with Eskom and its related electricity generating and distributing issues, and crime, policies will fail and investors will stay away.
“You can have the best policy on paper, [but] if you can[not] provide electricity it is useless. [We also have to] deal with crime, [or the] policy will not work,” he says.
Government is pinning its hopes to address these challenges on its Operation Vulindlela – a joint initiative of the Presidency and the National Treasury to accelerate the implementation of structural reforms and to support an economic recovery.
According to government, Operation Vulindlela aims to modernise and transform network industries, including those supplying electricity, water, transport and digital communications.
Godongwana said that although “a lot of work has been done” in government structures to remedy South Africa’s challenges, government wants to resolve the Eskom issue “as soon as possible”.
Part of fixing Eskom is to ensure the utility has a healthy balance sheet, the Minister noted.
He also said Eskom needs to focus on using and enhancing what it has, and not what it does not have.
Godongwana added that a priority for Eskom is to ensure that, of its total generation capacity of 48 GW, at least 32 GW is producing electricity at any given point.
“That is why it is critical for us to clear [Eskom’s] balance sheet,” he said, adding that an announcement in this regard will be made on February 22.