A commitment to build a new $100m (R1.45bn) hi-tech smartphone manufacturing plant by Dubai-based Mara Group is among the nearly R290bn in investments, including those from South African businesses, that rolled in at President Cyril Ramaphosa's investment conference on Friday.
The moves are being seen as a signal that the so-called investment strike by the corporate sector may be over. ’ ‘
The investment commitments span sectors such as mining, telecommunications and media and manufacturing. These are projects that had already undergone rigorous checks and balances and are bankable.
This is in addition to $35bn in pledges from other countries announced earlier this year, which have been earmarked for investment in state-owned companies.
— Anglo American announced a R71.5bn investment
The government has appointed task teams to work with these countries to convert these pledges into investments, though trade & industry minister Rob Davies did not elaborate on the timeline for this process during a press briefing on the sidelines of the conference.
Ramaphosa announced in April a drive to attract $100bn in investment to the economy over the next five years - two months after he became president. At the time he also hoped for a 3% economic growth rate this year but the contraction in the second quarter tipped SA into recession. The Reserve Bank and National Treasury have since revised the growth outlook for 2018 to 0.7%.
The summit was oversubscribed, with an unexpected 1,300 delegates turning up on Friday, among them local and international fund managers, entrepreneurs and other business people and a small contingent of government representatives.
Ramaphosa told investors in his opening address that the inaugural South African Investment Conference was "an expression of shared hope and a renewed confidence". It was a "bold and unequivocal statement that we are determined to put behind us the period of uncertainty and discord and embrace a future of co-operation and partnership".
"We invite you to invest in our mines and factories, farms and game parks, call centres and technology hubs, refineries and solar farms. We invite you to invest in our people, to harness their energy and unleash their latent capabilities," he told investors.
Ramaphosa called on South African companies to engage with his envoys on their investment plans and capital expenditure programmes, "so that we can have a better idea as a nation what the future portends on the economic growth landscape". He appointed Phumzile Langeni, Jacko Maree, Mcebisi Jonas and Trevor Manuel as investment envoys to meet investors in SA and abroad.
Ashish Thakkar, CEO of Mara, the telecoms group that has committed $100m for a hi-tech, affordable smartphone manufacturing firm, told Ramaphosa: "Thank you for making us come to SA earlier than planned."
South African companies that announced multibillion-rand commitments include Sappi, with a R7.7bn pledge, and Mondi with R8bn.
Mining firm Vedanta will invest R21.4bn, which includes a pit mine that will employ 3,000 people during construction. Bushveld Minerals committed R2.5bn and plans to expand its processing capacity over the next five years. IvanPlats will invest R4.5bn on constructing a mechanised platinum mine.
Anglo American announced a R71.5bn investment. Andile Sangqu, executive head of Anglo, said $6bn would be spent between 2018 and 2022 on sustaining and extending the life of mines, preserving 72,000 jobs.
Rain, which is building a 4G network, has committed R1bn, shareholder Paul Harris said. The company will increase its base stations to more than 5,000 within five years.
Naspers committed R6bn. Mercedes-Benz's R10bn investment in its plant in East London over five years was also announced.
Previously, more than R1-trillion was said to be sitting on domestic corporate balance sheets as political and policy uncertainty deterred investment. SA's business cycle is in its longest downwards phase since 1945, according to data from the Reserve Bank. In the second quarter of this year, gross fixed capital formation fell by 0.5% as the economy contracted.
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