South Africa is already implementing various reforms to improve the performance of State-owned enterprises like Eskom and Transnet and, thereby, drive higher growth rates.

With progress evident in areas such as a reduction in loadshedding, there must now be a focus on ensuring that inclusive growth is pursued by government and business partners alike, Planning, Monitoring and Evaluation Minister Maropene Ramokgopa stated in a keynote address at the fifth France-South Africa Business Forum, in Sandton, on September 29.

She said South Africa was working to strengthen its position in a changing global environment, with the country’s development agenda guided by the National Development Plan and the Medium Term Development Plan.

“Our priorities are very clear. We want to drive inclusive growth, as well as create jobs. We want to reduce poverty and tackle the high cost of living, and we also want to build a capable, ethical and developmental State . . . Without a capable State, we will not be able to create an enabling environment for businesses and industries to thrive,” she added.

Ramokgopa highlighted that the priorities were interconnected, as poverty and inequality could not be addressed without growing the economy and creating more jobs.

“Equally so, we cannot sustain economic growth without reliable infrastructure, investment and productive industries, and we cannot achieve this objective without a capable State that can coordinate and implement effectively,” she averred.

Ramokgopa cited France’s work in introducing reforms that had helped to grow its economy, noting that South Africa could leverage this expertise in implementing its own reforms, domesticating it as necessary.

“Our focus includes accelerating economic growth and industrialisation, improving infrastructure delivery, strengthening governance and public institutions, enhancing service delivery through digital transformation, expanding employment opportunities which includes skills development, particularly for young people, and advancing a just transition towards a low carbon and climate resilient economy,” she emphasised.

Embassy of France to South Africa, Lesotho and Malawi interim ambassador Benjamin Cabouat outlined the importance of the reforms under way in South Africa and France’s support in these efforts.

In terms of Transnet, which had opened up the network to private operators, France was supporting this at an institutional level, he said.

Cabouat noted that Transnet signed a €300-million (R5.8-billion) agreement with France’s Agence française de développement (AFD) to support its transition to a low-carbon operating model a few months ago.

“The objective is to help make the country’s logistic system more efficient, resilient and sustainable,” he pointed out.  

“In the rail industry, the French industrial presence is particularly visible through Gibela Rail, as it is delivering 600 commuter trains to the Passenger Rail Agency of South Africa, manufactured through a substantial South African industrial base,” Cabouat added.

He also outlined French companies’ support for water infrastructure delivery, with companies providing expertise in wastewater treatment, reuse, leak detection, network management and industrial water efficiency.

“A very concrete example is the Durban Water Recycling Project, developed by Veolia in partnership with the eThekwini municipality. In practice, this project means less pressure on drinking water resources, less wastewater discharging to the environment, and a reliable source of water for local investments,” Cabouat averred.

He also stressed the importance of investment that created productive capacity locally, trained workers, developed suppliers and connected South African companies to larger markets.

Cabouat said new projects continued to be launched, with Soufflet Malt having started production on a R2‑billion malting facility in Midvaal, Gauteng, earlier this year. The facility is expected to produce about 100 000 t/y of malt, sourcing 100% of barley from local growers.

He emphasised the need to also build on the entrenched French footprint in the country, with focus on how to move from renewable-energy generation to the transmission infrastructure needed to connect, turning improvements in rail reforms into globally competitive freight corridors, transforming water technology into bankable infrastructure projects, processing more critical minerals locally, and creating stronger regional supply chains, all while ensuring that those new investments produced skills, suppliers, technology and jobs.

He pointed out that there were over 480 French companies and subsidiaries already operating in South Africa, representing about €4.3-billion in French foreign direct investment stock and employing over 65 000 people across sectors including energy, transport, logistics, manufacturing, pharmaceuticals and financial services.

Cabouat acclaimed that, at the sixth South African Investment Conference, held in Johannesburg, in March, 30 French companies announced R20.7-billion in new investment commitments.

“This was the largest foreign investment commitment announced by any single country at this year’s conference,” he emphasised.

Moreover, this builds on ongoing work, he said, noting that since 2019, French companies had announced about R166-billion of investment in South Africa.

“France is not simply exporting products to South Africa. French companies are producing here, employing here, training here, investing here. Over the past two years alone, French companies have trained nearly 25 000 South African workers, transferring skills and helping develop the next generation of local talents,” Cabouat highlighted.

He outlined the importance of this especially in the country’s energy sector, which was focusing on rolling out the Transmission Development Plan, and providing an opportunity for energy producers, financiers, engineering companies, equipment manufacturers and technology providers, and was an ecosystem in which French companies were “deeply involved”.

The France-South Africa relationship had evolved into a broad-based economic partnership spanning trade, investment, industrial development and innovation. French businesses continued to play an important role in sectors that were critical to South Africa's growth ambitions, while South African businesses were increasingly looking to international markets to support expansion, diversification and competitiveness," said Standard Bank Group Business and Commercial Banking international trade head Luthando Vuba.

Key sectors expected to drive future collaboration include energy, infrastructure, manufacturing, logistics, skills development, technology and innovation as businesses strengthen supply chains, build industrial capacity and pursue new growth opportunities.

Cabouat outlined a broader opportunity, noting that South African’s economic potential was not limited to its local market.

“For many French companies that are present here, Johannesburg is already the headquarters from which they operate across Southern Africa. The country has the region’s deepest industrial base, sophisticated financial markets, major logistics infrastructure, and an extensive network of companies capable of operating over cross border, and the wider region, brings complementarity to these strengths.

As implementation of the African Continental Free Trade Area Agreement progresses, stronger trade and investment relationships are expected to support regional integration and economic development.

Cabouat posited that South Africa could increasingly act as an industrial platform for companies seeking to serve the wider continent.