The Congress of South African Trade Unions (COSATU) welcomes the €11.5 billion (Rands 229 billion) Global Gateway Investment Package in South Africa announced by European Commission President Ursula von der Leyen and South African President Cyril Ramaphosa.  This is a welcome boost to our economy, jobs, local businesses, infrastructure, including energy generation capacity. 

COSATU appreciates that the package commits to raising European investments in South Africa with approximately R173 billion in a Just Energy Transition, R24 billion in the Just Component, R20 billion in infrastructure and connectivity, and R6 billion in building the pharmaceutical value chain. 

These will be invaluable boosts to local jobs and communities, businesses and value chains.  They will be an important investment to boosting our energy generation capacity, reducing carbon emissions and expanding critical economic infrastructure. 

Whilst welcoming this progressive announcement by the European Commission and South African government, it is important that these financial commitments be in the form of investments and grants, not loans.  South Africa needs to manage our debt trajectory very carefully and avoid further indebtedness, in particular foreign currency denominated debt that threatens to place us in a dangerous debt trap.  Foreign currency denominated debt needs to be particularly tightly managed given the appreciation of the Euro and other currencies against the Rand and political conditions lenders may attach.

It is equally critical that the various relevant departments, municipalities and State-Owned Enterprises, vigilantly ensure that these funds are used to capacitate Eskom and other critical SOEs and municipalities, as well as support local jobs, communities, businesses (in particular manufacturing) and value chains.  They should not be used to merely import jobs and materials. 

This Investment Package is a positive vote of confidence in South Africa as the leading industrial economy in the African continent and a strategic partner for the European Union.  It is a welcome boost for the African National Congress led government’s efforts to capacitate the state and its SOEs, stimulate economic growth and create jobs.  It is a progressive endorsement of South Africa in a year when we have been subject to endless baseless attacks on social media and other platforms by political vandals at home and abroad.

Issued by COSATU

Matthew Parks (COSATU Parliamentary Coordinator)

Mobile: 082 785 0687

Email: matthew@cosatu.org.za