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HOST OF PROBLEMS

For South Africa, the World Economic Forum is a chance to change the narrative

Reuters/Philimon Bulawayo
It’s all good. Really.
By Bobby Ghosh
Published Last updated This article is more than 2 years old.

Jacob Zuma has three tough days ahead of him as he tries to persuade Africa’s biggest gathering of investors that they should invest their money in his country. South Africa’s president may shake off scandals with ease—the latest involves the spending of public money on one of his homes—but it’s a lot harder to shrug off the parlous state of his country’s economy.

Barely a year after losing its status as the continent’s largest economy to Nigeria, South Africa is a hot mess. Unemployment—at 26.4%—is the highest it has been in over a decade. Economic growth slowed to a feeble 1.3% in the first quarter of 2015. There’s a terrible drought. Unsurprisingly, consumer confidence has plunged.

To top it all, a recent wave of violent xenophobia has stained the country’s reputation as the Rainbow Nation. Although the violence was directed mainly at poor immigrants, it will give many potential investors some pause.

So the World Economic Forum’s Africa summit, which starts in Cape Town today, gives Zuma a platform to try and change the narrative about his country. (It’s also an opportunity to grab some attention in the absence of the the man who will dominate the event.) With over 1,250 delegates from 75 countries filling the cavernous Cape Town International Conference Center, the host nation is keen to reassure investors that all is well—or will be soon. South Africa “offers a sound investment destination for savvy investors,” cabinet spokesperson Phumla Williams claims, in an article in today’s Business Report.

The delegates at WEF—the majority of them businessfolk—will have plenty of opportunity to test that claim. The South African government is flooding the zone: Zuma is bringing a dozen of his ministers to the WEF event. This means potential investors can put some fire to the feet of finance minister Nhlanhla Nene, or minister for economic development Ebrahim Patel.

But the officials who will come under the greatest scrutiny will be energy minister Tina Joemat-Pettersson, and Zethembe Khoza, chairman of Eskom. South Africa’s power utility is in crisis, having announced rolling power cuts starting tomorrow. This is especially bad timing, not only because of the WEF, but because winter is just around the corner.

In her article, spokesperson Williams talks up South Africa’s “dynamic and stable economy.” Over the next three days, Zuma and his phalanx of ministers must make world’s top business professionals believe that.

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