On Tuesday, 28 November 2017, the South African Embassy hosted a high-level Conference on Financial and Economic Matters at the headquarters of the Italian Banking Association in Rome.

It was the first bilateral initiative of this nature where leaders from the Ministries of Finance, top bankers and economic actors from Italy and South Africa gathered to discuss recent developments in their respective financial and economic sectors as well as possible areas of collaboration.

The Conference provided a platform for robust and open discussions on pertinent matters in the aforesaid sectors. Topics for discussion focused on, inter alia, improving the integrity, productivity and efficiency of the banking sector; preventing and combating financial crimes; investment and financing of public sector projects as well as public-private partnerships.

The outcomes of the Conference were enhanced not only by the participation of representatives of Italian Think Tanks and academics of some Universities in Rome, but also by the presence of students in relevant faculties, who were afforded the  unique opportunity to engage speakers on recent financial and economic developments in Italy and South Africa. Moreover, the Conference was preceded by a closed workshop which aimed to provide a forum for open and frank discussions between high-level speakers and participants.

Bank of Italy Governor Ignazio Visco, who was the first to take the floor, said  South Africa is a "privileged partner" for Europe and Italy, being a country with great potential for growth. "As a member of the G20, South Africa is a privileged partner for Italy, having a very diversified, similar and complementary economy to that of our country, and an integrated banking system in line with the international standards," he said. As for bilateral relations, "they are good but can be improved" thanks to new trade agreements. "The EU is the main trading partner of South Africa, the three-quarters of exports to South Africa are intermediate capital goods and in 2015 80 billion euros were invested there," he went on, underlining the good levels of cooperation between Italy and South Africa in the pharmaceutical and chemical sectors and reminding participants that major renewable energy tenders have been won. "There are conditions to increase the Italian financial presence in South Africa, which is becoming a 'hub' financially important", having adopted a specific banking framework. However, Governor Visco concluded, there are several challenges facing the African country, including the need to strengthen competition, boost innovation, reduce inequality, reduce public debt, strengthen financial stability. "To meet these challenges - concluded the governor - cooperative solutions are needed".

South Africa’s Deputy Minister of Finance Sfiso Buthelezi, for his part, pointed out that apartheid is a "burden" still to be overcome and that’s why in the next three years he the South African Government intend to invest in infrastructure, precisely  to bridge the gap caused by this burden. In fact, Government spending is also based on what has happened in the past and "South Africa is a young democracy, being only 23 years ago that the country could get rid of the apartheid regime that hit 80 percent of the population”. Even though “now our economy has reached a very good level, which enables us to invest in areas inhabited by the black population", he noted, apartheid "remains a burden on our shoulders and it is important to understand this past to understand why half of our population is still unemployed".

Cooperation between Italy and South Africa, as recalled by the Deputy Minister, is currently equal to 3.1 billion euros, "but more can be done". Italy exports predominantly machineries and pharmaceuticals, while South Africa exports raw materials and minerals, added the representative of the Pretoria government, who then announced that the first direct flight between Italy and South Africa would be  inaugurated "as soon as possible".

The Deputy Minister’s words were echoed by the Governor of the South African Reserve Bank Lesetja Kganyago, who said that the economy of South Africa "is small but open" and history has shown us that the costs of the past "were extremely high". It took eight years for South African companies to recover from such a burdensome past, he stressed, and then there was the crisis in 2009, but now the recovery has finally begun after so many years. “When the global economy is in crisis, the recovery becomes difficult", said the governor.

Now, however, "the situation is very different: wellbeing has improved, there has been an acceleration of growth and unemployment has returned to pre-crisis levels". In this context, "the Reserve Bank of South Africa has done a lot in the post-crisis stage, thanks to a change in fiscal policies, adopting interest rates close to zero. Obviously, the normalization of economic policies has had costs such as increased price volatility and decreased access to credit", noted Kganyago, reminding that steps have been taken to reduce the deficit from 7.5 to 5 percent of the GDP. "In South Africa there is a confidence crisis" which, according to recent studies, costs up to one percentage point for the growth of our economy”. The goal, he concluded, is to regain investor confidence in our country".

Among the invited speakers was also Italy’s Minister of Economy, Pier Carlo Padoan, who was unable to come, but nevertheless addressed a message to the participants highlighting that the partnership agreement between the European Union and the Southern African Development Community, which entered into force on 10 October 2016, offers "interesting perspectives" for the further development of bilateral relations between Italy and South Africa.  "Italy ranks at the 19th place as country of destination of the South African export and is the 11th exporter to South Africa”,

reminded Padoan in the message read out by his councillor for tax policies, Vieri Ceriani. Both countries are members of the G20, which is a further opportunity for cooperation, as demonstrated for example by the G20 initiative on international transactions, which aims to repatriate the taxation of corporate profits. “Italy in recent years has made important efforts to promote foreign investment and to encourage the internationalization of her companies”, concluded Padoan, and  “the hope is for today's event to contribute to further strengthen bilateral cooperation between the two countries".