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.
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.
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.
“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.
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.