Business

R363 billion boost for Ramaphosa

2019-11-10 19:20

This year’s investment conference pledges – largely driven by the private sector – tallied up to R363 billion. Approximately R300 billion pledged at the inaugural conference held last year in October. This figure could rise significantly as some companies had yet to seek regulatory and, in some cases, board approval, before announcing their commitments.

That the second SA Investment Conference took place following the Springboks’ Rugby World Cup triumph over favourites England was perhaps a good omen for the economy. And, Ramaphosa drew on the resilience of the local economy and South Africa’s proven ability to navigate stormy waters, to send an emphatic reminder to detractors. South Africa is open for business and anyone that writes off the country’s prospects is doing so at their own peril.

President Cyril Ramaphosa said: “Indeed, we have a lot to offer in the form of our people, in natural and mineral resources, with a young and able workforce, world-class infrastructure, a sophisticated telecommunications system and a well-regulated financial and banking sector.”

Ramaphosa drew delegates’ attention, telling them the government was undertaking far-reaching reforms to make the country a preferred choice for investment.

“We have been very clear that our priority lies in implementing policy reforms, creating policy certainty, consistency and predictability for investors to have confidence in the economy.”

To date the government has finalised the Integrated Resource Plan, an encompassing mining charter is close to finality and timelines for the stabilisation of Eskom – which now poses the biggest risk to the country’s fiscal stability – have been set among a list of other accomplishments.

We have a lot to offer in the form of our people and in our natural and mineral resources

He outlined automotive, clothing and textiles, gas, chemicals and plastics, renewable energy, oceans economy, among others, as priority sectors that the government would focus on developing to accelerate economic growth and create employment opportunities.

He also said: “We have initiated the release of the high-demand broadband spectrum, which will bring down data costs and encourage investment.”

In addition, to attract skilled professionals and grow tourism, the government has prioritised immigration reform and changes to the visa regime.

SAIC
Pledges - By the numbers

During his feedback regarding pledges made at last year’s conference, the president announced that eight of the 31 projects announced at last year’s conference had been completed; the other 17 were either in implementation phases or close to conclusion.

Last year’s biggest pledge was made by Anglo American. The company pledged to invest R72 billion in the next five years – part of which is its R28 billion investment in the Venetia diamond mine in Limpopo. This is one of the largest investments in mining in more than two decades.

The investment will ensure the life extension of the mine to 2046 and it is expected that 94 million carats will be mined through the extension. The mine employs 4 365 people.

During an interview earlier this year, Mpumi Zikalala, who heads the De Beers Group managed operations, said of the mine: “It’s really about investing in the future of mining in this country – the bedrock of our economy.”

Another big investment last year was made by Exxaro, one of South Africa’s foremost black-empowered coal companies. It recently started producing thermal coal at its new Belfast Coal Mine – six months ahead of schedule. The Belfast Implementation Project represents an investment of R3.3 billion and is part of Exxaro’s R20 billion investment until 2023 pledged at the inaugural SA Investment Summit last year.

Belfast will produce 2.7 million tons a year of high-grade thermal coal for the export market. The life of the mine for the first phase is 17 years and the potential for a second phase is there, which could take the life of the mine to 30 years, says Lazarus Ramashilabele, business unit manager.

Exxaro is the largest supplier of coal to Eskom and the fourth-largest exporter of coal in the country.

Mara Group, which has opened a smartphone plant based in Durban’s Dube TradePort, also made a notable investment. Employing more than 200 young engineers who were previously out of work – the bulk of whom are women – Mara’s production facility was opened by Ramaphosa, with Mara Group’s Ashish Thakkar.

“I have a dream that all South Africans will use proudly South African phones,” said Thakkar. The phones are now available through Mara’s own website, but plans are afoot to roll out a chain of stores in the next two years.

Echoing Ramaphosa’s commitment to enacting wide-scale economic reforms to boost growth, Toyota SA president Andrew Kirby said at this year’s conference that competing interests across the globe meant that South Africa had to fight for every investor looking for a destination worthy of their interest.

“Raising this amount in pledges – especially in this era of economic austerity – shows a lot of confidence in the reforms that the government is undertaking.”

Toyota has pledged R2.43 billion in an investment towards a new passenger car model that will go into production in 2021. This investment, which will create about 1 500 jobs, is based in KwaZulu-Natal.

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January 26 2020