China Pledges $14.7 Billion in Investments to South Africa
London, July 24, 2018 (AltAfrica)-The rand, South Africa’s currency, climbed 1.2 percent after news that China would invest $14.7bn in the African country.
“China is ready to invest and work with South Africa in various sectors, such as infrastructure development, ocean economy, green economy, science and technology, agriculture, environment and finance,” President Cyril Ramaphosa told reporters.
The commitment follows similar promises from Saudi Arabia and the U.A.E. and bolsters President Cyril Ramaphosa’s campaign to lure $100 billion in investment to South Africa over the next five years, as he seeks to boost a flagging economy ahead of elections next year. The investment pledge and loans, the biggest yet from the Asian nation to South Africa, were announced after a meeting between Ramaphosa and his Chinese counterpart, Xi Jinping, in Pretoria on Tuesday.
“China is ready to invest and work with South Africa in various sectors,” Ramaphosa, who took office in February, told reporters. “We also recognized that although trade figures have grown steadily over the past few years, bilateral trade has not reached its potential.”
Xi is on an official state visit to South Africa ahead of the 10th summit of the BRICS nations — Brazil, Russia, India, China and South Africa — that begins in Johannesburg on Wednesday and will also aim to bolster trade and political ties. China is South Africa’s biggest trading partner.
These are some of the other deals that were announced:
- Master agreement of $983 million for Industrial and Commercial Bank of China with Standard Bank of South Africa Ltd.
- Framework agreement of $3 billion on financing and insurance cooperation between China Export and Credit Insurance Corporation and Standard Bank
- Special facility agreement of $500 million for the development of small and medium enterprises in South Africa and other African regions
“China and South Africa relations are at a new historical departure point,” Xi, who visited South Africa twice before, told reporters. “President Ramaphosa and I had a very productive discussion during which we discussed further taking forward our strategic partnership. We need to build closer high-level engagement.”
China will support an investment summit that the African nation is hosting in October, he said.
The rand climbed after Ramaphosa announced the investment pledge, and was 1.2 percent stronger at 13.3006 at 5 p.m. in Johannesburg, the best performer after Brazil’s real of 16 major currencies tracked by Bloomberg.
“The rand is firming because our president is making it rain,” said Wichard Cilliers, a trader at Pretoria-based Treasuryone Ltd. “He has just secured another big investment, this time from China. That means new FDI inflows.”