Pharmaceuticals group Aspen strategic trade development executive Stavros Nicolaou has confirmed that the Government of National Unity’s (GNU’s) efforts to accelerate economic growth in South Africa are already bearing fruit, as more foreign companies are looking to invest in the country.

Speaking during a panel at the Southern Africa & Indian Ocean – France Business Forum on October 15, he said the “new dawn” in South Africa’s governance presents opportunities to enhance bilateral relations between South Africa and countries such as France.

He stated that the two countries had many complementary and synergistic factors in their favour.

Nicolaou explained that while South Africa still needed to reach GDP growth of more than 3% to meaningfully create jobs, lower its debt-to-GDP ratio, ensure competitively priced energy, further reduce the ports backlog and improve high crime and corruption rates, investors stood to gain more than they did to lose by investing in South Africa.

He added that the GNU’s efforts to effect structural reforms in problem areas in the country had already resulted in a stronger rand, more foreign direct investment and buoyant equity and stock markets.

Industrial Development Corporation research and information head Pamela Mondliwa said the GNU’s efforts were evidenced in accelerated reforms having been implemented and more impactful industrial policy coming to the fore at all government levels. “Government is demonstrating commitment through actions,” she confirmed. 

Ambassador of France to South Africa, Malawi and Lesotho David Martinon agreed, stating that South Africa stood out as a beacon of hope and opportunities, particularly as the GNU was expected to improve economic stability and create a favourable environment for investment.

The forum, which is organised by Business France and the French South African Chamber of Commerce and Industry, is meant to strengthen collaboration between French, Indian Ocean and Southern African companies in response to increasing demand for technological solutions and services, which are growing across multiple sectors.

South Africa still faces significant challenges of high unemployment, inequality and structural difficulties, and more investment will be a critical step toward overcoming these issues.

“The country is emerging as one of the most stable and promising markets in Africa,” Martinon stated, adding that its legal system and banking sector were already sufficient, which French companies had long recognised.

He highlighted the energy, water, manufacturing and rail sectors as those with the most prominent opportunities for more French investment.

About 80 000 South Africans are employed through the more than 300 French companies that are invested in South Africa through subsidiaries, including Air Liquide, Alstom, Dassault Systèmes, TotalEnergies and Engie.

Over the past four years, French firms have invested more than R100-billion into the South African economy, as well as provided training and upskilling of the local workforce, and fostered local supplier development initiatives.

Some of the newest investments in South Africa stemming from French companies include that of Stellantis opening an automotive assembly plant in the Eastern Cape, Canal+ merging with Multichoice to form one of the world’s largest entertainment companies and ClubMed building an all-inclusive beach resort on the coast of KwaZulu-Natal.

Small Business Minister Stella Ndabeni-Abrahams said the GNU was premised on strong partnerships and focused on inclusive economic growth in South Africa, particularly in fostering more value-added services development since these could create jobs at scale.

She stated that there was potential for South Africa to become a more prominent trading partner for France, since it is currently its twenty-eighth-largest trading partner.

 There is also more scope for small- and medium enterprise (SME) development, the Minister pointed out, especially as South Africa aims to create 11-million new jobs by 2030 – 90% of which need to stem from SMEs.