President Cyril Ramaphosa on Tuesday made an announcement that Chinese President Xi Jinping has committed to invest $14.7 billion in South Africa.
The Chinese president is on his third state visit to South Africa ahead of the Brics Summit which kick off on Wednesday in Johannesburg.
Managing Director of Emerging Markets & Africa at Deloitte, Dr Martyn Davies says at this point South Africans should not confuse loans with investment unless the loans are converted into equity.
Any amount committed to South Africa it's obviously positive and it improves confidence which is something we desperately need.— Dr Martyn Davies, Managing Director of Emerging Markets & Africa at Deloitte
But I think we are getting a little bit too hopeful in that lets not confuse loans and investments. If those loans are converted later into equity then of course we can call it FDI (Foreign Direct Investment)— Dr Martyn Davies, Managing Director of Emerging Markets & Africa at Deloitte
A bulk of this money is going into Transnet and Eskom. This is of course the consequence of poor governance in recent years...— Dr Martyn Davies, Managing Director of Emerging Markets & Africa at Deloitte
To hear the rest of the conversation with Dr Martyn Davies, listen below:
This article first appeared on CapeTalk : China commits to invest $14.7 billion in South Africa