US companies in SA are keen to invest more and to hire more people, but SA needs to speed up its decision-making if it wants to attract more capital, US treasury deputy secretary Wally Adeyemo says.
Adeyemo paid SA a five-day visit this week. More than 600 US companies have a presence in SA, employing 230,000 people and Adeyemo said these companies had told him they wanted an easier path to make investments in the SA economy.
“These firms are thinking about allocating capital ... and if I know it’s going to take six to 12 to 18 months for a decision to be made before I know if that capital can actually be used, I’m going to move it to another jurisdiction where it can be made faster,” Adeyemo said in an interview with Business Day after he addressed a gathering of business people in Johannesburg.
Adeyemo is Janet Yellen’s number two at the US treasury. His visit to SA follows Yellen’s visit last January, continuing the high-level engagements between the US and SA that have taken place since the US took SA to task over the docking of Russian ship “Lady R” in Simon’s Town in December 2022. While tensions over SA’s stance on the Israel-Gaza conflict have added to the tensions it already had with the US over its stance on Russia’s invasion of the Ukraine, Adeyemo was firm these were simply “robust” conversations between partners.
“We have areas of disagreement, but we also have a lot of areas of agreement,” he said. “We agree that Russia is in violation of Ukraine’s sovereignty and in violation of international law. On Gaza, we both agree that what Hamas did on October 7 was a heinous act of terrorism. We both agree that more humanitarian assistance needs to get into Gaza. We both agree that there needs to be a ceasefire,” Adeyemo said.
“We’ve taken different approaches to both those situations, but ... we’re both democracies and where we disagree ... we’re going to work towards finding each other,” he said. “And fundamentally one of the places where we need to work together is in deepening the economic relationship.”
SA’s foreign policy stance last year prompted some members of the US Congress to call for it to be excluded from the African Growth and Opportunity Act (Agoa) if Congress renews the trade deal after it expires in 2025. SA is one of the biggest beneficiaries of Agoa, which provides duty-free access to the US market for about $3bn of SA exports.
Adeyemo emphasised that while the decision was up to the US Congress, President Joe Biden had made it clear that he was in favour of renewing Agoa “because we think it creates real benefits for the 32 countries that participate, but also for the US”.
Adeyemo, who will also visit a platinum mine this week, called for a less restrictive environment for mining investment in SA, to enable investment in the minerals needed to support the energy transition that would also “lift up parts of SA that have been left out and left behind for too long”.
He urged SA to make decisions on the just energy transition plan to which international partners including the US have now committed $9.3bn.
“We want to see SA take advantage of those resources. Ultimately they’ve got to make a set of decisions that allow them to do so, but we stand ready to be their partners,” he said.
None of the $1bn guarantee the US committed to its Development Finance Corporation to back just energy transition plan investments by US and SA companies has so far been drawn, and much of the $63m of grants it has committed remains unspent.
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