When the cents come marching in: 50 firms pledge to invest in SA
Ramaphosa promises reforms at gremlin-beset investment conference, but some experts remain dubious
More than 50 companies will be pledging new investments at the third SA Investment Conference, President Cyril Ramaphosa said on Wednesday in his opening address to the event, which emphasised the reforms SA is implementing to attract foreign and local funds, in spite of the devastating effect of the coronavirus pandemic.
“We have embarked on a mission of economic reconstruction and recovery, building on the successes of attracting investment we have achieved over the past two years,” the president told delegates.
Despite the effect of the pandemic, Ramaphosa said there was “still strong appetite for new investment” in SA’s economy.
The conference is intended to sell SA as a preferred destination for investment — despite the damage done by Covid-19 and in the face of SA’s long-standing structural impediments, such as strained electricity supply.
The annual event at the heart of the state’s R1.2-trillion drive to attract investment over five years is focusing on securing the R664bn pledged at the 2018 and 2019 events, Ramaphosa noted at the 2020 event.
It is also the first opportunity government has had to communicate its economic reconstruction and recovery plan directly to investors since it was released in October.
Ramaphosa highlighted that in line with the recovery plan, the state is “pushing ahead with critical reforms”. These included restructuring power utility Eskom, overhauling the energy sector and the planned allocation of high-demand spectrum by March 2021, along with other measures such as addressing corruption and the capability of government.
Ramaphosa acknowledged that the pandemic had affected about 10% of the pledges made at the past two events. Nevertheless about R172bn of the committed amounts made at past conferences had been spent on projects to date, he said — or just over a quarter of previous pledges.
“Despite the severe disruption of the last few months, the vast majority of projects are making steady progress,” he said.
The all-virtual leg of the event, held on Tuesday, was marred by technical glitches, however, which overshadowed the discussions held in various sector panel discussion.
The first day — which was expected to have 1,000 virtual attendees listening in to sector discussions — experienced digital difficulties that left the livestream to the talks “unavailable”, causing the event to start late.
Though organisers sent separate links to the panels, a number started late, while others experienced severe connectivity and audio problems for speakers and participants. The experience was described as by one attendee as “your worst Zoom call during Covid-19 on steroids”.
The GCIS did not responded to queries about what led to the difficulties or how this may have soured investors experience of the event.
Day two however, ploughed ahead with reduced in-person attendance due to social distancing protocols. An estimated 1,700 delegates, locally and internationally, were expected to tune in virtually.
The conference follows the medium-term budget policy statement (MTBPS) in which finance minister Tito Mboweni laid bare the plight of SA’s finances. Given the state’s constrained resources, it is looking to private investors to help drive growth.
Ramaphosa stressed the importance of the private sector in efforts to shift the country’s economic trajectory, particularly in the state infrastructure programme, which is a key leg of the recovery plan. Operation Vulindlela — the joint unit between the Treasury and the presidency reporting directly to Ramaphosa — will help promote high-impact economic reforms in network industries, Ramaphosa said. That would include areas such as energy, water and telecommunications, as well as in attracting critical skills and streamlining the visa regime.
But many observers have warned that the success of the conference will ultimately lie in what government actually implements, given that it has yet to make good on many of its previous promises.
Despite previous years’ pledges, gross fixed capital formation — an indicator of fixed investment in the economy — has declined since 2017, according to the most recent GDP data from Stats SA.