dtic, IFC pact to boost investment, job creation

Tuesday, February 27, 2024

The Department of Trade, Industry and Competition (the dtic) and the International Finance Cooperation (IFC), part of the World Bank Group, have signed the 2nd Phase Cooperation Agreement aimed at stimulating investment and job creation.

The agreement outlines areas of co-operation in the form of technical advisory services.

The IFC, in partnership with State Secretariat for Economic Affairs (SECO), has over the years, collaborated with the dtic, the Presidency and various public and private stakeholders on a range of reform initiatives to improve the business environment, enhance private sector competitiveness and support investment generation in South Africa.

Speaking at the signing ceremony held in Pretoria, IFC Regional Director: Southern Africa, Claudia Conceicao, said the signing of the cooperation agreement represents another milestone between the South African government, the IFC and the World Bank Group.

“This partnership has grown through a broad investment climate programme between the IFC and the government with funding from the dtic, IFC, SECO and the UK’s foreign Commonwealth and Development Office,” Conceicao said.

Conceicao said the agreement has resulted in real outcomes, including investments and job creation, and not just changes to laws and regulations.

“We welcome the decisive actions that government has taken to address the energy crisis and ongoing reforms in the electricity sector. The steps taken to alleviate burdens and unlock potential investment are significant.

“We look forward to continuing to work with all the partners to systematically address the bureaucratic hurdles that investors face, including in the area of licensing for independent power producers,” she said.

Conceicao said the new phase of the Cooperation Agreement will further support South Africa’s initiatives, particularly in the renewable energy sector, creating a more conducive environment for private sector investment and contributing to sustainable economic growth and development.

Mirko Manzoni, the Ambassador of Switzerland to South Africa, said South Africa is a strategic partner for Switzerland.

“The free trade agreement between the European Free Trade Association and the Southern African Customs Union (SACU) signifies close bilateral relations between the two countries,” he said.

Manzoni said investment climate reforms are essential drivers of economic growth and tax revenue.

“A well-functioning investment climate, characterised by clear and transparent regulations, fosters a level playing field for businesses, promotes competition and stimulates innovation,” Manzoni said.

Cooperation Agreement

In March 2019, an agreement of the same nature was signed between the dtic and the IFC.

The first phase Cooperation Agreement entailed a mutual collaborative effort towards South Africa’s reform agenda towards the improvement of the business climate. 

This included technical information pertaining to the development of granular action plans, communications strategy and the promotion of peer-to-peer learning.

Upon conclusion of the agreement on 30 June 2022, the dtic received advisory services spanning across investment promotion, investment strategy and investment climate reform.

The programme demonstrably yielded quantifiable investments and tangible results such as the flagship development of Bizportal and the City of Johannesburg’s online permitting system.

The agreement signed today cements a long-standing relationship and encompasses critical areas of cooperation on renewable energy licensing, Country Investment Strategy and a more investor friendly regulatory environment.

To date, investment generation into the local component manufacturing capacity for renewable energy generation, as well as the establishment of a one-stop shop assigned to streamline the licensing regime for renewable energy independent power producers are notable initiatives that have culminated from initial technical support emanating from the long-standing dtic-IFC relations.

The 2nd phase entails technical advisory support for:

  • Delivery on the Country Investment Strategy and coordinating Mechanism for its operationalisation.
  • The enabling eco-system for foreign direct investment (FDI) generation into renewable energy.
  • The streamlining of licensing for independent power producers, and supporting investors through one-stop-shops by supporting the establishment of the energy one-stop shop in a bid to alleviate South Africa’s energy crisis.

The signing of the Cooperation Agreement is a welcomed step in the dtic’s drive to promote inward investment, job creation, localisation and economic growth and development. – SAnews.gov.za