President Cyril Ramaphosa has urged domestic and international investors to put their money behind SA despite the country’s energy crisis, which negatively taints international perceptions of the country and dents investor confidence.
This is as Ramaphosa leads Team SA in the last leg of the R1.2-trillion investment drive where the president conceded that load-shedding, which often leaves large parts of the country without power for up to 10 hours a day, and the long-standing blockages in SA’s freight and logistics sector, leads to low investor sentiment.
“The lack of reliability in electricity supply weakens business and consumer confidence, taints international perceptions about our country and affects investment sentiment and decisions,” Ramaphosa said in his opening address at the fifth SA Investment Conference (SAIC).
“The Energy Action Plan presents a clear path to reduce the severity and frequency of load-shedding in the short term and achieve energy security in the long term... Our immediate focus is on improving the performance of our existing coal fired power stations as they continue to provide the base load of our energy.”
SA is targeting R60bn in additional pledges from domestic and international investors with the expectation that the initial R1.2-trillion target set at the inaugural SA Investment Conference will be exceeded. So far SA has attracted R1.14-trillion in pledges over four successive investment conferences, indicating that the investment target set in 2018 is not misplaced.
“Given all that has taken place in the intervening years, it is understandable that investor confidence has been sorely tested. Doubters have had reason to be sceptical,” Ramaphosa said.
“We remain convinced that SA is an investment destination with significant untapped potential. We do believe that by leveraging our unique value proposition, we have the ability to attract higher levels of investment.”
To fix the bottlenecks in the logistics sector, Ramaphosa said that a National Logistics Crisis Committee had been established “to drive the implementation of a comprehensive road map for the freight logistics sector”.
Transnet, responsible for transporting crucial minerals from rail to port, is still reeling from years of state capture and corruption under former executives. Its rail network, which covers domestic and regional corridors and is used to transport commodities for export, remains unreliable to firms in various sectors, causing harm to bottom lines and the economy.
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