Roll up, roll up. Today is Thursday, March 24. Welcome to the fourth annual SA Investment Conference. The conference will position SA as a “globally relevant player and partner in trade” and “showcase investment opportunities that will transform the economy and create employment opportunities”.
Press releases say the first three conferences raised R700bn. A huge amount, but sadly not much more than companies had planned to invest anyway. Forgive yourself if you get lost in the hype. Government officials and ministers throw numbers around like confetti.
President Cyril Ramaphosa’s target was R1.2-trillion by 2024, and he may get well past there. While the investments are being made, unemployment has continued to rise and will top 38% officially by the time the final investments counts are in. Something isn’t working.
Business will pitch up today. Local CEOs are acutely conscious of the need to be seen to be trying to help, but they know the truth about this government – it is lost in its own politics. It has no coherent economic strategy. Politics always trumps economics. The ministers who should be leading a government-wide investment drive either don’t understand what it is they have to do or actively don’t care to do it.
Ramaphosa says he wants “partnerships”, but everyone knows a partnership with the government is also one with the party that runs it, the ANC. If you want to know what’s going to happen to the money you plough into a partnership with the ANC, then read its literature and don’t say you weren’t warned.
I’m not trying to scare investors off attending today’s conference, but I have some advice for them. You can make good money in SA. No-one is going to stop you investing, and whatever you do you won’t be able to stop the government taking credit for it. But keep your eye on the money. Ignore the noise and get on with what you do. We are an agreeable people, conservative and dutiful. Pay your taxes.
Question literally everything the government tells you. Even if it is merely the time. They mean well but they’re incompetent. I read a fascinating article here by Portia Derby, CEO of Transnet, our big rail, ports and pipeline operator, on plans to get the private sector involved in Transnet’s operations. As “partners”.
One of Ramaphosa’s economic reforms is to encourage private capital into the country’s derelict and bankrupt state-owned harbours and railways. Derby wrote that: “In containers, autos and agriculture, strong partnerships are in the transaction delivery stage, with container terminal requests for proposals in the ports of Ngqura (Coega) and Durban.”
I think that means a request for proposals to big international port operators like Dubai Ports World or Maersk has been put in the post and we are awaiting an outcome. I hope there’s a queue, but my second bit of advice is that if you absolutely have to be a partner to any part of the state, make sure you have real, actual, operational control over your investment, or walk away.
Of course, even before the conference begins Ramaphosa will know how much is in the pipeline. His chief go-getter in the matter is trade, industry & competition minister Ebrahim Patel, and the man is a machine. He will have taken down every item of coming SA corporate capex with a permanent marker and the total will be the number Ramaphosa speaks next.
If he can put a number to the understanding reached between Anglo American and Electricite de France (EDF) to install up to 5GW (5,000 MW) between now and 2030 to power 100% of Anglo’s operations here by wind, solar or batteries by 2030, he will scream past the R1.2-trillion target.
This deal is just breathtaking. It is the right thing to do and a signal of intent to do business as the independent I was trying to describe earlier. And I am so happy Anglo CEO Mark Cutifani, a perfect ambassador for SA during his stewardship of the company, got to announce it before he retires.
Sadly for the ANC, there’s nothing to steal from deals like the Anglo/EDF arrangement. For that there’s the gas lobby, trying, unfortunately with some success, to place gas as the transition fuel of choice between coal and renewables. The powerful National Business Initiative backs it, though, led by Sasol. That’s to be expected. As the ANC struggles to pay staff salaries, national chair Gwede Mantashe suddenly loves gas too. Even Derby’s hand is up. She wrote here that her ports are preparing for liquefied natural gas imports. Why?
“A partnership between Transnet and the industrial development zone is proposed to do the same at the Port of Ngqura,” she wrote. “These interventions are key to changing the energy mix for SA and establishing competitive sources of energy for enhancing our manufacturing exports.”
Such confident, smooth promises. Give yourself over and you can almost touch the gas terminal and the exports themselves. Don’t ask yourself “Why gas?” Or how Anglo can do 5GW of renewables in eight years to run the country’s biggest mines and we can’t do it nationally to renewables without passing gas first.
Except it isn’t just passing gas. It’s theft. Welcome to SA. Let me take you to our leader.
• Bruce is a former editor of Business Day and the Financial Mail.
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