“The coronavirus pandemic has severely damaged our economy, causing the greatest economic contraction in decades and driving the unemployment rate to its highest level. In the wake of this pandemic, our foremost task now is to rebuild our economy. This must be akin to how the protea germinates after the fire,” said Ramaphosa in his opening remarks at the third investment conference.
The conference started in 2018 as Ramaphosa’s ambitious plan to collect R1.2-trillion worth of investment for the country. So far, local and international investors have made contributions to the tune of R664-billion.
Because of the effects of Covid-19 and the ensuing lockdown on the country’s economy, Ramphosa said that this year’s conference would focus on the implementation of the investment commitments that have already been made. The government has been tracking the actualisation of 102 projects that were announced in the previous conferences. He said at least R170-billion of the committed amount had been spent on projects to date. This translates to just over a quarter of the commitments made in 2018 and 2019.
“These projects alone portray an economy with exciting opportunities for growth across a wide diversity of industries,” said Ramaphosa.
The sector that has seen the most significant flow of investment from these commitments is mining and mineral beneficiation, with just more than R63.6-billion spent to date.
Investment has also been made in various other sectors, including the information and communications technology sector, the automotive sector, property, hospitality, infrastructure, and financial services.
So far, 19 investment projects from the past two years have already been completed. However, 44 projects, which represent 57% of the total investment commitment, are under construction. Another 12 projects are in the early stages of implementation.
Although there has been some progress made, 21 projects, which represent about 10% of total commitments, have been delayed or are on hold as a result of the pandemic.
Ramaphosa also announced that in January 2021, the African Continental Free Trade Area would take effect. This trade area is expected to have a market of about 1.3-billion people with a combined gross domestic product in the region of $2.3-trillion.
“With its advanced infrastructure, diverse economy, sophisticated capital markets and developed manufacturing capacity, South Africa is the ideal location for any company wanting to reach the continental market with greater effectiveness from a cost and logistical point of view,” said Ramaphosa.
While investment flows in and projects get underway, Ramaphosa said it is still vital for the country to forge ahead with its economic reconstruction and recovery plan. “We are pushing ahead with critical reforms,” he said.
Some of these reforms include fixing the energy sector. Ramaphosa said that Eskom, which has struggled with keeping the lights on for years, is undergoing a “paradigm shift”. The government is going ahead with restructuring the power utility into separate entities for generation, transmission and distribution.
He said that this shift includes creating a transmission subsidiary, which will allow for a competitive electricity-supply market.
Although there is an emphasis on implementation, Ramaphosa said that this year’s conference was able to garner more than 50 companies that will make investment commitments.