The Minister of Trade and Industry, Dr Rob Davies has reiterated that there is no correlation between the Bilateral Investment Treaties (BITs) and attracting investments. He was speaking in Addis Ababa, Ethiopia where he was moderating the Africa Trade Week Panel Discussion on the Continental Free Trade Area (CFTA) and Foreign Investments Regulation for Africa

The Panel noted that African investment regulation is marked by a myriad of Bilateral Investment Treaties and Double Taxation Treaties which favours foreign investors over their domestic counterparts. This session, therefore, considered how the proposed Pan-African Investment Code and the prospective African investment agreement in the CFTA could contribute to levelling the playing field and boost intra-African investments for Africa's transformation agenda. 

Minister Davies indicated that bilateral investment treaties do not necessarily translate into increased investment.

“South Africa receives FDI from investors in countries with whom it has no BITs and often little or no FDI from others where a BIT was in place. After we cancelled our BIT with Germany, BMW announced its biggest investment in South Africa. What is important is that South Africa provides strong protection to investors in terms of the framework provided by the Constitution and other relevant legislation. Also the rights of all investors are guaranteed in accordance with our Constitution;” said Minister Davies.

Minister Davies added that in order to attract investment, African countries need to identify and package investment opportunities, facilitate investment and provide for balanced protection to investors.  He stated that Invest South Africa has been established as a one stop shop to assist investors in terms of identifying and assessing investment opportunities and to facilitate investment by improving the efficiency of regulatory processes. Minister Davies also emphasised the importance of targeted incentives to attract investments in certain sectors. It is important for Africa to develop a continental framework for investment that includes the facilitation of investment.

The panel commended South Africa’s leadership on investment reform and emphasised that it can be considered as a best practice for African countries. South Africa was also commended for its Guidelines for Good Business Practice in Africa, which further encourages the alignment of business operations of South African investors in Africa with the development integration agenda.

Earlier the week the Secretary General of United Nations Conference on Trade and Development, Dr Mukhisa Kituyi, commended South Africa for leading the global debate on Investment Policy Reforms saying it has helped to create the movement towards the right direction for global investment policy making.

Issued by Department of Trade and Industry