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SA investment drive: Ramaphosa’s claimed pledges now stand at R663bn

President says the SA Investment Conference is no talk shop, as the half-way mark of his investment target of R1.2trn is surpassed.

President Cyril Ramaphosa announced that government has secured international and local investment commitments to the tune of R363 billion in his closing address at the second SA Investment Conference in Sandton on Wednesday night.

Following pledges by business to invest around R300 billion in the country at last year’s inaugural investment conference, this effectively brings total commitments thus far to the president’s high-profile SA investment drive to R663 billion.

Read: Ramaphosa opens Mara Phone plant, punts SA’s SEZs

Ramaphosa first announced his ambitious target to attract $100 billion in new investment into SA over a five-year period (to 2023) back in February last year, when the rand was trading at around R12 to the US dollar. This investment target, aimed at boosting SA’s flagging economy, translated into R1.2 trillion at the time.

The initial R1.2 trillion target still seems to be the investment figure government has in its sights, even though $100 billion now equates to around R1.5 trillion based on the weaker rand/US dollar exchange rate.

Read: Trudi Makhaya: Hope for SA despite junk-status red flags

The targeted total investment of R1.2 trillion by 2023 was mentioned several times at the second annual SA Investment Conference this week. This means that Ramaphosa is past the half-way mark in terms of secured investment commitments, however, it remains to be seen how much of this will translate into actual investments that boost economic growth and jobs.

Just last week during his Medium-Term Budget Policy Statement (MTBPS) in parliament, Finance Minister Tito Mboweni reduced the anticipated 2019 growth outlook for the SA economy to a mere 0.5%. This is down from the 1.5% expected GDP growth forecast in March.

Read: National Treasury downgrades 2019 growth forecast

“The total value of investment commitments made today at our second SA Investment Conference is R363 billion. I repeat: R363 billion,” Ramaphosa declared at the Sandton Convention Centre last night.

“We have received indications of a further R8 billion in planned investments that are subject to either regulatory or company board approvals and therefore we have not named the companies here today. This commitment of investments amounting to R371 billion if you add the R8 billion that is still subject to regulatory and board approval processes is 17% higher than the commitments that were made last year [R300 billion],” he added.

Ramaphosa said this was “a clear vote of confidence” in the South African economy. “More importantly it is a sign of confidence in the future of our country and the belief that the South African economy is poised for growth going into the future.”

Major investments announced include R14 billion by paper and pulp giant Sappi; R50 billion by telecoms heavyweight MTN; R6.5 billion by Rio Tinto in Richards Bay Minerals; R14.7 billion by Coca-Cola; a R6 billion Automotive Industry Transformation Fund under the umbrella of the National Association of Automobile Manufacturers of South Africa; R2.4 billion by Toyota SA in its Durban plant; R20 billion by mining group Exxaro; and R1.48 billion by brewing giant Heineken, among others.

Moneyweb is aware of some of the other investments on the cards, however, the groups did not want to speak about the planned investments until all approvals are in place. This includes the development of SA’s first Club Med beach resort on the KZN North Coast, reportedly valued at R1 billion.

Ramaphosa projected that the new investments announced at this year’s conference will “conservatively lead to the creation of around 412 000 direct jobs over the next five years”. He noted that “this does not include the hundreds of thousands of indirect jobs” that will be created through allied linkages to these investments.

Speaking ahead of the conference at the launch of the Tshwane Automotive Special Economic Zone (SEZ) in Pretoria on Tuesday, Ramaphosa said more than 16 000 direct jobs have been created since the government last year announced its intention to mobilise more than R1.2 trillion in new investments over the next five years.

Read: 16 000 jobs created following SA’s R1.2trn investment bid

Meanwhile, speaking earlier to the more than 1 500 local and international business and government leaders at the opening of the conference, the president was firm in his comments that “this is not a talk shop, it’s serious business”.

Reporting back on last year’s secured investment pledges of R300 billion, Ramaphosa said between the 31 projects announced, eight have been completed and 17 are in the “construction or implementation” phase. He noted that this means that 80% of the projects announced last year have either been completed or are being implemented. 

“In total this represents R238 billion of [the] investments announced last year. It is pleasing to see that investors continue to consider South Africa as a country with much to offer and [as a] viable and profitable investment destination,” he added.

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With a similar amount of money invested last year it created 16000 jobs. How does it now create over 400000 jobs?

Most of the money “pledged” is from local companies. I thought the $100 billion target was for FDI “Foreign Direct Investment”

I am not sure about the “confidence in SA” our man is talking about. Most of these companies have to invest to stay in business. They always have.

This is a con. They got it wrong when they set the target and are now trying to pull the wool over everybody’s eye’s.

We are not all ANC voters that believe anything they are told.

Agree…it’s all ANC window-dressing to tell their voters “we the ANC” have got this under control…

It wasn’t all necessarily invested last year I would think, these investments are pledged over a period of time.

I am not sure how committed this funding is but I can’t see how this hurts, crowding in business and reform policy is not a bad starting point to trying to turn things around.

Complete con – most of this is in fact ordinary operational costs that businesses would have incurred anyway. Very little new investment. Don’t be fooled.

R300bn just to cover the zar movement from 12 to 15. That’s currency volatility and how investors like Walmart, Barclays all lost most of their USD when they invested 15 years ago.

You also have to laugh at the photo.

Not a single local except our man in the picture.

Those who were there know that over 80% were locals “tenderpreneurs” and maybe that’s why they are excluded from the picture.

It seems to be a concerted effort to hide the fact that there is very little FDI.

Yip-does not reflect the demographics of SA. Maybe Human Rights Comm can investigate and send somebody to jail for this.

it was all about the snacks, tea, coffee etc that comes along with the meeting / conference

We as readers are flooded with offers from institutions that want to do business with us on a daily basis. Hundreds of advertisements are aimed at us daily. Banks call us and offer to invest in us. There is such an abundance of businesses that want to business with us, that we have to ignore 99% of them.

Why does the government have to plead with entrepreneurs to invest in the country? Why are businesses interested in doing business with you and me, and not interested in doing business with the government? The answer is quite simple. We are bound by a legal framework. The rule of law determines our behaviour. Entrepreneurs have trust in the system that regulates us. Therefore, they are not only willing to business with us, but they are also fighting each other for the opportunity to provide products and services to us.

We have a socialist government. This means that we have the rule of man, not rule of law. Laws, regulations, agreements, contractual obligations and performance constantly change under the rule of man. The system cannot be trusted. The word of the president has no value at all because it is arbitrary, and delivery on his side depends on his popularity in a populist party.

It is a sign that there is a major problem with your political system when your president constantly holds investment summits in an effort to save his own skin.

Interesting logic.
Let me take a stab, but don’t confuse this for to mean I’m in love with the current government, just taking a stab!

When I wanted a car, I called banks. When I wanted a house I called the bank. When I wanted a loan to … I called the bank.
During all this, some banks rejected me and others approved me for 80% of the amounts I needed.

Basically, I’m saying your logic is flawed.

I appreciate your point.
How many ads do you see per day? How many banks call you to increase the amount on your credit card? How many banks advertise home loans and car loans? If you are not credit-worthy, then they won’t bother. The point is – South Africa is credit-worthy. We sit on the largest mineral wealth on earth and a huge labour force, but government policy prevents it from being extracted.

The president has to send special envoys to look for investments. International investors don’t “advertise” here. They don’t call to offer credit or investments. They sit on billions to invest, but they sidestep and ignore the ANC. They go to jurisdictions where their property rights will be respected.

Follow the trend. Last year money was pledged, received and applied across various sectors. How has this helped us ? Unemployment has increased, the economy has stagnated even further and the SOE’s have hemorrhaged more than ever. So, if we got pledges last year and things got worse, please tell me how this years pledges will be any different. Getting the pledges and money is good, don’t get me wrong but without addressing the elephants in the room (unions, NHI, BEE, EWC, etc etc), we will never turn the ship around in a meaningful way. Begging for money is merely going to enrich a few at the top yet again. Hang on, isn’t this the exact strategy of the ANC ?

This is not so much an investment drive but a statement of what would be the future investment of Corporate SA should the environment be stable and enabling.

Club Med is lovely Cyril but couldn’t we just have a few decent, efficient and literate cops, prosecutors, magistrates and correctional service officers in my province? Thank you

Club Med don’t really create jobs and would actually just replace some of the jobs lost by the closure of places like the Beach Hotel on the Golden Mile in Durban.

The ANC led government spent Billions on the Durban promenade seemingly in vain as the paying tourists have gone elsewhere.

The problem is not lack of capital here in broken South Africa-it is stealing and incompetence. Capital will find a place where the risk/return ratio is correct.

But when NHI is proposed with a budget deficit that is growing and a weak and misguided ex judge is drafting EWC legislation, capital can find better places. Add on the SOEs and the commie clown of a pharmacist running them into the ground and the money cannot be much help.

Then add on that the VBS looters are free, as is my friend Shabir Shaik( in his 10th year of death), the Eskom debacle and an incapable NPA and captured judiciary then the down grade is clearly a when not if -with an inevitable IMF bailout.

Unions, unions, unions,unions, unions,unions, unions,unions, unions,unions, unions,unions, unions,unions, unions,unions, unions,

Thats all I am going to say!

Yeah right….business leaders eagerly fly across the globe to visit a small country’s presidential drive for investment “pledges”.

Pledges = mere promises (with a vague way of measuring)

When a country BEGS (sorry, more PC-correct “raise funds”) for FDI, you know there’s something wrong!

Why not create the political conditions to make SA attractive for investments in the 1st place?! (Mauritius a simple example..)

The ANC govt is in this dire position as a result of decades long CONSEQUENCE of anti-business rethoric from their pro-socialist stance / Red-tape interfering with the private sector / Radical Econ Transformation / EWC / WMC.

Many SA businesses made huge foreign acquisitions to get their accumulated capital out of SA (if the foreign venture turns into a profit is a secondary aim….the main aim is to get capital out fast). SA experienced a corporate investment ‘strike’ the past few years, punishing ANC govt for its hostility towards business community. So much capital left SA, that the JSE All Share went sideways for the past 4-5 years!

Remember still some years ago when our previous tribal-chief Mr Zuma uttered “Corruption is a western concept”?
Well well…to Zuma’s followers I reply: “The resulting POVERTY is an African concept!”

Jacob Zuma would have never been able to achieve this. We have many problems but we can tackle them one by one… Let’s be positive and give our best!

These “pledges” comes with conditions. The government can’t deliver these conditions.

I’m looking at a business acquisition here in SA. Payback 2-3 years. But I just cant seem to pull the trigger on this. The risk/reward relationship is broken for me.

Should be enough to see Eskom and SAA through for another month or so !!!!

How can you lure investors when eskom isn’t sorted out and with all of this crime in SA?
N1 at De Doorns is closed because of cars being stoned and trucks being looted, and this incident today is just one of many.

Crime will increase, there’s nothing that can be done about unemployment, SA is overpopulated. Finish en klaar!

Ja, and that’s in DA-run Western Cape, which has martial law in large parts of its capital.

But let me, as a simpleton, do some analysis on these investments.

SAPPI. It is happening but only because SA allows a plant and process that no one else in the 1st world (and I guess some of the 3rd world) would allow due its polluting the environment – the ocean where its untreated effluent is dumped. Great for tourism, er, not.

The automotive “industry”. This is all subsidised by the taxpayer and car buyer so the investment is really just squandering taxpayers’ funds giving them to overseas companies and local unionised, overpaid workers. The SA car industry will never compete on a global scale; it will just be a drain on tax income.

That probably eliminates 50% of the “investments”. Dream on SA.

Just look at the picture again and ask yourself where WMC comes from.

Who is at the front of it.

People need to see this guy for what he really is.

TSK!

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