Will Africa cut much ice in Davos this year?

PUBLISHED: Mon, 22 Jan 2018 07:45:53 GMT

You have to hand it to the South African delegation that will head to the freezing slopes of the Alps in Davos, Switzerland, this week for the World Economic Forum. Their optimism in the face of a difficult task as steep as a Davos ski slope, verges on bravery.
Even the theme of this year’s WEF “A shared future in a fractured world” sounds more like a conundrum than a rallying call. Africa, where South Africa shares the bugbear of low growth with a score of fellow nations, will have to labour to impose itself on the agenda at Davos 2018.

To make matters worse, Europe is more concerned about the fall-out from Brexit, income inequality, the crumbling of public services, fading leadership and the rise of extremism plus the question of refugees from Africa fleeing poverty and hunger. Television reports say African refugees are even limbing the Alps, not too far from Davos, in their desperation to escape penury.

Investors at WEF are likely to be sceptical about the meagre growth of a South Africa that just over a decade ago was cooking along at 5%. It is worth pointing out that many economists agree that 5% is merely enough to absorb the annual flood of school leavers and graduates onto the job market.

At the very least South Africa’s president elect Cyril Ramaphosa, who will lead his country’s delegation to Davos, has made bold promises aimed at putting the country’s house in order before taking the plane to Switzerland. He has taken a big stick to corruption and the sloppy state owned enterprises – from Eskom to Denel – who cost state coffers millions every year.

Ramaphosa , as a statesman waiting, is trying to put down his marker as a future leader of the country and at a pre-Davos breakfast in a Johannesburg hotel pledged to bring more and more people to justice – a process that has begun in recent days with the launch of investigations and the freezing of assets. It’s a move that would cheer up the taxpayer as much as foreign investors, who fear corruption for its uncertainty and power to inflate the costs of running a business.
“The NPA (National Prosecuting Authority) is beginning to move. We want it to increase the tempo. The freezing is good but we need to see much more,” says Ramaphosa.

Fine words, but until there are high-profile convictions and billions returned to state coffers, these words are not going to cut much ice among investors. It could be a cold Davos for the South African delegation, but with one of the continent’s most robust economies at stake you would be very hard hearted indeed not to wish them the best of luck.

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