Chinese President Xi Jinping promised $14.7 billion of investment on Tuesday during a state visit to South Africa, where President Cyril Ramaphosa is on a mission to kick-start economic growth after a decade of stagnation.
The rand firmed more than one percent after Ramaphosa announced China’s investment pledge, which takes the amount overseas economies have committed to invest in South Africa to $35 billion since the start of the month.
Those commitments will help ease worries about the health of the South African economy, which has performed poorly despite investor optimism when Ramaphosa replaced scandal-plagued Jacob Zuma in February.
“We have agreed that we must work as partners to improve the lives of our peoples by elevating our business, commercial and trade ties,” Ramaphosa told a joint news conference with Xi.
Xi said China would take “active measures” to expand imports from Africa’s most industrialised economy.
Ramaphosa will host Xi and the leaders of Brazil, Russia and India at a summit of the BRICS group of emerging economies in Johannesburg later this week, where he will be looking to secure further investment pledges.
Among agreements signed on Tuesday, Chinese banks lent a combined $2.8 billion to struggling South African state power utility Eskom and logistics company Transnet.
Ramaphosa has focused on revitalising Eskom, which received an injection of $2.5 billion from China Development Bank and reported a $171 million full-year loss on Monday.
Transnet, one of a handful of state firms accused of irregularities in the awarding of state contracts under former President Jacob Zuma, received $300 million from Industrial and Commercial Bank of China. Zuma denies wrongdoing.
South Africa’s Trade and Industry Minister Rob Davies said other investments planned by China included an expansion of electronics firm Hisense’s local operations and a metallurgical complex in Limpopo province.
“We are looking to promote investment-led trade,” Davies said. “The same is what we are looking for from our BRICS partners. More investment and less outright pushing of products into a market.”