President Cyril Ramaphosa has set a new investment target of mobilising R2-trillion by 2028.
The previous target of R1.2-trillion was set five years ago. The fourth SA investment conference last year raised R367bn in investment commitments, bringing the five-year investment target “firmly within sight,” Ramaphosa said.
These commitments do not however necessarily translate into actual projects. SA has experienced a sharp decline in the level of its gross fixed investment over the years.
However, Ramaphosa insisted in his state of the nation address on Thursday that over the last year “many of these commitments have resulted in the companies that made those commitments investing in new factories, call centres, solar power plants, undersea fibreoptic cables, the expansion of production lines and the adoption of new technologies. These investments have resulted in new jobs and new opportunities for small emerging businesses.
“The investments that have flowed into the economy to date have contributed to a substantial increase in local production. These investments have encouraged our efforts to buy local.”
The fifth investment conference will be held on April 13 and a new target to mobilise more than R2-trillion in new investment by 2028 will be set.
This investment, the president said, was essential to growing the economy and creating jobs.
While admitting that the economy had been hit hard by load-shedding, the president put a positive spin on it by saying that it was larger than it was before the Covid-19 pandemic.
The sluggish economy hit by load-shedding and logistical challenges is not growing sufficiently to absorb new entrants into the labour market, worsening the unemployment rate. The SA Reserve Bank expects the economy to grow by 0.3% this year as cripplingly high levels of load-shedding restrain business activity. Eskom CEO Andre de Ruyter expects 2023 to be a tough year in terms of load-shedding.
The underperformance of the rail freight system is also likely to continue to drag down coal and mineral exports.
Business and commentators have said that government needs to act urgently to address the electricity and logistical crises which have hit business confidence and investment.
The unemployment rate of 32.9% in the third quarter of 2022 remains stubbornly high and rises to 43.1% on the expanded definition which includes those who have given up looking for work.
Ramaphosa emphasised the importance of attracting skills for economic growth and competitiveness.
“Having completed a comprehensive review of the work visa system, we will move quickly to implement the recommendations put forward. These include establishing a more flexible points-based system to attract skilled immigration, implementing a trusted employer scheme to make the visa process easier for large investors and streamlining application requirements. We will also be introducing a remote worker visa and a special dispensation for high-growth start-ups.”
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