South African President Cyril Ramaphosa said he’s been “overwhelmed” by the level of interest in an investment summit he opened on Friday and that his plans to lure $100 billion over the next five years are well ahead of target.
With elections due to take place next year, Ramaphosa needs to show he’s delivering on pledges to revive an economy mired in recession and create jobs for the 27 percent of the workforce that’s unemployed. Since announcing the investment drive in April, China, the U.K., the U.A.E., Saudi Arabia and Daimler AG’s Mercedes-Benz unit have pledged $35.5 billion.
Companies pledged to invest more than $8 billion on Friday, including a $6 billion commitment from Anglo American Plc, although not all the money is new. Further announcements are expected later in the day.
“We are making enormous progress,” Ramaphosa said in an interview with Bloomberg Television at the investment conference in Johannesburg, which attracted more than 1,000 delegates. “I think we are ahead of the track, we are way ahead, and I am overwhelmed by the level of interest in the South African economy.”
The summit comes two days after Finance Minister Tito Mboweni unveiled a mid-term budget that slashed economic growth forecasts and showed government debt peaking later and at higher levels than previously anticipated. The gloomy outlook triggered a sell-off in the rand and the nation’s bonds, and raised fears the country could lose its sole investment-grade credit rating from Moody’s Investors Service.
“After this, things get better because we know we are able to wrap our arms around what needs to be done,” said Ramaphosa, who expressed confidence that another ratings downgrade could be avoided. “We are repositioning our economy and beyond this, I am confident that we will have done a pretty good job to put South Africa on a winning path once again.”
Ramaphosa, a 65-year-old lawyer and former labor-union leader, took office in February, after the ruling party forced Jacob Zuma to step down following an almost nine-year tenure that was marred by scandal, policy missteps and inappropriate appointments.
“We now know how serious and how deep the problem was,” Ramaphosa said. “We now know what needs to be corrected. We now know the type of skills that we need and the type of people that we have to put in place to repair the damage that has been done in the past nine years, and it is huge damage, but we are repairing it.”
These are the investment commitments announced on Friday:
Mining company Anglo American intends spending $6 billion by 2022 on maintaining and expanding its mines in South Africa.
Naspers, Africa’s largest company, intends investing about $314 million in new and existing technology companies.
Sappi, the world’s biggest producer of dissolving wood pulp, is planning a $526-million upgrade and expansion of its Saiccor Mill, while packaging company Mondi will invest $544 million in expanding its capacity.
Vedanta Resources has completed a feasibility study for a $350 million investment in a zinc mine project and processing plant. It is also considering spending $700 million to $800 million on a smelter and refinery complex. About $306 million is being invested in the Ivanplats platinum project, owned by Ivanhoe Mines, a Japanese consortium led by Japan’s Itochu Corp. and local community groups.
Bushveld Minerals Ltd. intends allocating as much as $170 million over the next three years expanding its capacity to produce and process vanadium.
Telecommunications company Rain Telecom plans to spend $68 million on a 5G high-speed network Mara Corp, a Rwanda-based company, has earmarked $100 million for establishing a plant that will produce smartphones in South Africa.