President Cyril Ramaphosa woos business leaders to invest in SA
President Cyril Ramaphosa on Thursday turned on the charm as he called on global business leaders to join SA on its journey of economic reconstruction and recovery.
“As investors, you need to know that your investments are secure, that the operating environment is stable, and that you are supported by policy certainty and regulatory safeguards,” he said.
Speaking during the fourth SA Investment Conference in Sandton, Ramaphosa said it’s been nearly four years since the country embarked on its ambitious drive to raise R1.2-trillion in new investment over a five-year period.
“Despite the impact of the pandemic, by the time of the third SA Investment Conference in 2020, we had raised a total of R774bn in investment commitments.”
SA is two-thirds of the way to reaching its target, he said.
“Of the R774bn committed, around R316bn has so far been invested. Of the 152 investment pledges, 45 projects have been completed. A further 57 are under construction.”
A total of 15 have been put on hold, in several cases due to the impact of the Covid-19 pandemic.
“This fourth SA Investment Conference could not be taking place at a better time, just as the country is casting off the long shadow of the pandemic and embarking on a concerted and determined recovery.”
He said the government was aware of the complex challenges faced by the country, however “we are neither defined by these challenges, nor are we daunted by them”.
On Eskom’s rolling blackouts, Ramaphosa said no economy could operate without a reliable electricity supply. “That is why we have undertaken the most extensive transformation of our energy sector in nearly a century.”
He said in December last year the power utility met its deadline of establishing a separate transmission entity, and is set to complete the process of unbundling into separate entities for generation, transmission and distribution by the end of 2022.
“We are moving ahead to facilitate a competitive market for electricity generation, and the establishment of an independent state-owned transmission company. We have a deficit of about 4,000MW of energy supply.
“We are working with the private sector to fast-track investment to unlock a potential 4,000MW of embedded generation. We have increased the licensing threshold for embedded generation projects from 1MW to 100MW.”
In 2021, the country launched bid window six of its renewable energy independent power producer procurement programme, he said.
“This is going to add new generation capacity to the grid over the next two years, mainly through wind and solar power. Even as the country continues to experience intermittent load-shedding, we are moving with pace and determination to bring new generation capacity online in the shortest possible time.”
For the economy to realise its full potential, Ramaphosa said the country needs reliable railways and ports to work efficiently.
While the establishment of the Transnet National Ports Authority as a separate entity may not be transformational, the move was long overdue, he said.
“Transnet will soon start the process of providing third-party access to the freight rail network, a development that will encourage more efficient use of some of our country’s most valuable infrastructure assets.”
He told the more than 1,000 delegates in Sandton that last week SA concluded its first significant spectrum auction in close to two decades.
“This is going to unlock valuable spectrum for mobile communications that will have significant benefits for consumers and businesses, and will facilitate the deployment of broadband infrastructure across the country.”
On the country’s ailing state owned entities, the president said they had had a huge drain on the fiscus over the years and the government plans to bring that to an end.
He also reiterated the government’s commitment to establish a special unit in the presidency to deal with bureaucratic red tape, improve the operating environment for businesses and reduce the cost of doing business.
“We have established the Infrastructure Fund, with a R100bn allocation from the fiscus over 10 years, to leverage blended financing from private investors and multilateral development banks for infrastructure.”
Ramaphosa said there was a pipeline of projects in water, sanitation, energy, transport, digital infrastructure, agriculture, agro-processing and human settlements.
“Construction on a number of these catalytic projects will commence this year.”
All this work is part of the economic reconstruction and recovery plan put in place in October 2020.
“We are working to steadily reduce our deficit and debt burden. We are shifting public spending away from consumption and servicing debt towards supporting capital investment, productive activity and social development.”
He said tackling corruption would restore confidence in many investors.
“After a decade of state capture, they see a country that is confronting corruption and criminality, and that is rebuilding its law enforcement agencies and strengthening the capacity of the state.”
In SA, Ramaphosa said, business leaders would also see a well-regulated banking, financial and taxation system and a transparent budget.
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