The Department of Trade and Industry (DTI) and the World Bank have signed an advisory services partnership that is aimed at improving the business environment for domestic entrepreneurs.
The agreement, concluded last week, is also aimed at undertaking policy and institutional reform to enhance foreign direct investment inflows.
DTI director-general Lionel October said at the signing ceremony the partnership would focus on three key reform areas: business regulation, investment policy and promotion, and market regulation and competition policy.
“The advisory agreement formalises the partnership between the South African government and the World Bank Group to support the national reform effort led by the DTI, the Department of Economic Development and the National Treasury.
“The World Bank Group’s support for government will be delivered in partnership with the Swiss State Secretariat for Economic Affairs and the Prosperity Fund of the UK’s Foreign and Commonwealth Office,” said World Bank Group sister organisation International Finance Corporation (IFC) Southern Africa regional director Kevin Njiraini.
The project will deploy a Country Private Sector Diagnostic, which is a standard World Bank tool used to identify industry sectors that can attract significant domestic and foreign investments and deliver positive development impacts in the near term, if key inhibitors are addressed.
“Support from the 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.
“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,” noted October.
Commitment to the national reform programme has been articulated at the highest level within government structures. President Cyril Ramaphosa, in his State of the Nation address on February 7, committed to ensuring 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.
To this end, the South African government has, besides others, set a target to improve its current rank of 82 out of 190, to being among the top 50 economies in the Doing Business Report that is published each year by the World Bank.
“The 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 to generate investment of $100- billion within five years is important. It sets the tone for the policies needed to attract foreign direct investment,” said Njiraini.
Early deliverables under the support programme will be inputs into government’s investment strategy, which is expected to address not only horizontal barriers to private sector investment but also sector-specific enablers for growth and employment creation.
“The UK is the largest investor in South Africa, but we are determined to build on that here and elsewhere in Africa. Our Prime Minister set an ambition to make the UK the number one [Group of Seven] investor in Africa by 2022.
“We also strongly support Ramaphosa’s ambition to attract an additional $100-billion in investment into South Africa. [Monday’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. We intend, to this end, to make use of the UK’s R900-million Prosperity Fund in South Africa,” British high commissioner to South Africa Nigel Casey said in a statement.