Friday, January 21

Ramaphosa: SA is building a firm foundation for a sustained economic recovery

Typically this is the time of year when we bring together investors from across the country and around the world for the annual South African Investment Conference.

We held the first Investment Conference in 2018 as part of our ambitious goal of raising 1.2 trillion rand in new investments over five years. The conference was attended by more than a thousand delegates in 2018 and 2019, and in 2020 it was held in a hybrid format due to the Covid-19 pandemic.

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Together, these conferences raised just over R770 billion in investment commitments across a wide range of economic sectors.

The fourth South African Investment Conference would have been held this month, but we decided to move it to March next year due to various other events taking place at this time. These include local government elections, the COP26 climate conference, and the Intra-African Trade Fair, which starts on eThekwini next week. Another important reason to do it next year is that by then there will be much greater Covid-19 vaccination coverage, making travel and meetings easier.

Although the fourth Investment Conference has been delayed for a few months, our ambitious investment momentum continues. Even amid the challenging economic environment caused by the Covid-19 pandemic, which was compounded by the violence and destruction that occurred in parts of KwaZulu-Natal and Gauteng in July, companies continue to meet their commitments and seek other investment opportunities. in South Africa.

In the last year alone, almost R120 billion of investment commitments flowed towards the construction or expansion of the project. This means that around 38% of total investment commitments, or R90 billion, to date have entered the economy. Some investments have been delayed due to Covid-19, particularly in heavily affected sectors such as real estate development and tourism.

Just two weeks ago, I attended the launch of Toyota’s expanded production line at eThekwini, which will produce South Africa’s first locally made hybrid car. This investment was the result of a R2.4 billion commitment the company made at the 2019 South African Investment Conference. Also in KwaZulu-Natal, Tetra Pak is expanding its operations with an investment of R500 million.

The pharmaceutical industry is an exciting new growth area.

Aspen Pharmacare recently launched its R3.4 billion expansion, which it announced at the 2018 Investment Conference. This investment has turned Aspen’s Gqeberha manufacturing facility into one of the world’s largest manufacturing centers for general aesthetics and It has also provided capacity to produce more than 100 million doses of the Johnson & Johnson Covid vaccine under contract.

The World Health Organization also chose South Africa to host an mRNA vaccine manufacturing center with the Biovac Institute, which is a public-private partnership with the government. South African-born Dr. Patrick Soon-Shiong and his company NantWorks recently announced an ambitious initiative to build capacity for advanced healthcare in Africa. In addition to the investments they will bring, these developments will also contribute to our collective ambition for the continent to manufacture 60% of its vaccine needs by 2040.

Energy is another area of ​​growth. The 25 preferred bidders in the fifth round of our Renewable Energy Independent Power Producer Acquisition Program are expected to invest around R50 billion in the economy together. Raising the licensing threshold for integrated generation to 100 megawatts is likely to result in substantial private investment in electricity generation projects.

South Africa has recently secured an initial commitment of around R131 billion to finance a just transition to a low carbon economy by investing in renewable energy, green hydrogen and electric vehicles. This commitment by the United States, the United Kingdom, France, Germany and the European Union is in line with the Paris Agreement, which obliges the richest countries to support decarbonisation in the developing world.

These energy investments will help us overcome the debilitating head loss the country is currently experiencing as new electricity generation capacity is brought online.

Several new investments in data centers and submarine cables will not only generate new investments, but will provide the infrastructure necessary for the growth of the technology and telecommunications industries.

An important part of our investment drive is the far-reaching structural reforms we are undertaking in areas such as energy, telecommunications, water, ports and rail. These reforms will improve efficiency and competitiveness, reduce the cost of doing business in South Africa, and encourage more private investment in our economic infrastructure.

We now have 13 special economic zones across the country, providing investors with specific investment incentives, preferential tax rates, and export support. These provide an attractive manufacturing base for companies looking to supply local and international markets. Its value has increased further with the establishment of the African Continental Free Trade Area, which officially began trading at the beginning of the year.

While the investment rate has slowed due to the effects of the pandemic and several projects have been delayed, investment momentum is starting to pick up once again.

As we move forward with the implementation of the Economic Recovery and Reconstruction Plan, with its focus on infrastructure, industrial development, employment, and structural reform, the investment environment will improve even more.

Through the investments that are underway, the work that the social partners are doing to expand local production, and the progress we are making on key reforms, we are building a firm foundation for the success of the fourth South African Investment Conference on next year.

Most importantly, we are building a firm foundation for a sustained economic recovery that encourages more investment, creating more jobs, and providing new opportunities for startups.

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