The President of South Africa, Cyril Ramaphosa, has today revealed that his administration is coming good on attracting USD 100 Bn worth of new investment within five years. The South African President also said more than USD 16 Bn is already in the bag and many more projects are set to follow.
The last one year has been far from rosy for South Africa — the economy has stalled, the unemployment rate has surged, and the country is currently in a precarious position where it risks kissing its sole investment-grade credit rating goodbye as state finances continue to be eroded.
All these have necessitated the injection of fresh capital to propel economic growth. Ramaphosa’s new capital injection campaign got off to a good start a year ago when he hosted an international investment conference that secured pledges which helped push capital inflows to their highest in five years.
According to Ramapahosa who spoke at the opening of a follow-up investment summit in Johannesburg on Wednesday, of the 31 projects that were previously announced, eight have been completed and 17 are under construction or at the implementation stage.
“We are clear about what we need to do, and we are marshaling our every resource and our every capability to do it,” he told delegates. “We are on a path of removing impediments and constraints to inclusive growth.”
The president also said the government is doing the most in meeting promises to eliminate obstacles to investment, provide greater policy certainty and make visa rules more flexible.
Although investor interest appears to be on the rise in South Africa, Africa’s most-industrialised economy is projected to grow by an average of just 1.5 percent over the next 3 years.
This is no thanks to electricity shortages which have shrunk output and lower-than-expected growth which has curbed tax revenue, while also causing debt and deficit levels to soar.
However, Ramaphosa said the government is committed to taking the necessary measures to stabilize its ratio of debt-to-gross domestic product, and restructure and modernize struggling state power utility Eskom Holdings SOC Ltd.
“An immediate priority is appointing a CEO and strengthening governance through revamping the board, which we will do in the next few days,” he said.
- Pulp and paper maker Sappi Ltd. said it will spend ZAR 14 Bn (USD 944 Mn) in four of its plants over the next five years.
- Toyota Motor Corp. intends investing ZAR 2.4 Bn on building a new hybrid model passenger car in South Africa from 2021.
- The New Development Bank will earmark a minimum of USD 1.6 Bn for infrastructure development projects next year.
- Clothing retailers including Woolworths Holdings Ltd., Foschini Ltd., and Edcon Holdings Ltd. committed to spending ZAR 6.5 Bn on new manufacturing capacity that will create 20,000 jobs.
On the sidelines, CEO of Anglo American Plc, Mark Cutifani, said his company invested ZAR 15 Bn in South African mining projects in the past year and is committed to expanding output at its key platinum mines.
Additionally, Phuthi Mahanyele-Dabengwa, the recently-named CEO of Naspers’ South African unit, said her firm also sees scope to invest and expand more in the country but regulatory hurdles continue to frustrate the company’s best efforts.
Featured Image Courtesy: TheCitizen