Pretoria: The Department of International Relations and Cooperation recently presented its Annual Report to Parliament which showed it is in talks with National Treasury to develop a property acquisition strategy.
“The Department is engaging the National Treasury in the development of a property acquisition strategy, which would, amongst other things, guide the government in its decisions to either lease or buy properties abroad to house South African diplomatic missions. The review is currently underway,” said the department on Friday.
The department said the international trend appears to be leaning towards buying as opposed to leasing or renting.
One analyst recently questioned whether South Africa’s foreign missions demonstrated value for money.
The analyst accurately observed, said the department, that post-apartheid South Africa had broadened its presence in the world by opening new diplomatic missions from 34 diplomatic missions in 1994 to 126 currently.
It said the result was that the image of the country abroad was of a stable and maturing democracy, supported by strong institutions of political and economic governance with a well-capitalised banking system and abundant natural resources.
“This positive outlook of South Africa’s image is in no small measure a result of the hard work of our diplomats. In the work they do, they continue to centralise economic diplomacy in their programmes,” said the department.
With South Africa’s growing footprint in the world, the country’s international trade has escalated thereby contributing towards job creation and poverty eradication.
“South Africa is the second largest and most dynamic economy on the continent, accounting for 24% of Africa’s gross domestic product (GDP) in terms of purchasing power parity. Ours is also the second-largest developing country investor on the continent. In 2013, 29% of our exports were destined for Africa. In 2012, 12% of our dividends came from Africa.”
Despite global Foreign Direct Investment (FDI) falling by 16% in 2014, South Africa was able to attract over R140 billion in the 2013/14 financial year. FDI inflow to South Africa was registered at $3.31 billion from January 2015 to July 2015 with 5 037 jobs created.
Additionally, the department informed Parliament about the effects of the continuous depreciation of the Rand against major currencies.
For the years 2007/8, the Rand/US Dollar exchange rate averaged at US $1 = R7.50. For the years 2014/15, the exchange rate stands at US $1 = R12.50, representing a 66.7% depreciation of the Rand.
“In the report, the department revealed the cost of maintaining the missions for the year 2014/15 as standing at R3.2 billion. The amount represents a nominal increase, which takes into account the depreciation of the Rand against the currencies that missions transact in.”
The department has since embarked on a process to review its Head Office Organizational Structure, which was then approved by the Minister Maite Nkoana-Mashabane on 30 March 2015.
The department said this has resulted in certain branches being merged, money saved and operations streamlined. The next phase is to revisit the establishment across all missions.
Contrary to international trends, gross domestic fixed investment into South Africa has been growing steadily since the global financial crisis.
“Multinationals continue to find South Africa an attractive investment destination. To underscore the point, some of the multinationals from the most developed economies in the world who currently have operations in South Africa include: 700 from the USA; 600 from the UK; 600 from Germany; 280 from Japan; 185 from France and 120 from India.”
Recently VW committed an additional R4.5 billion to its investment into the South Africa market.
Since 1996, South Africa’s GDP has almost tripled to $400 billion and foreign exchange reserves have increased creating a growing and sizable African middle class.
South Africa also continues to experience exponential grown in international tourism and this is enabled by the role played by missions around the world, which not only facilitate visas but are also involved through various initiatives in marketing and promoting the country.
South Africa is playing an increasing role in world economic and political affairs having served twice in the United Nations (UN) Security Council and is currently on the UN’s Economic and Social Council and Human Rights Council.
SOURCE: SOUTH AFRICAN OFFICIAL NEWS