It is always satisfying when those who are cynical and negative about our country are proven wrong.
So I was delighted to welcome President Cyril Ramaphosa to Kempton Park on September 9 for the opening of a new R350m facility for Sweden’s Sandvik engineering group.
The project is part of the $100bn in investment the president has sought for SA, all in just five years. After only four, we are 95% of the way there after a series of presidential investment conferences at which local and global companies made pledges.
This demonstrates that SA is investible.
Sandvik provides mining, manufacturing and infrastructure solutions, and the new investment will consolidate its activities on one site.
It was during one of the president’s recent conferences that Sandvik committed to investment in its Khomanani facility and after touring it, it was clear Ramaphosa liked what he saw.
He noted that it is an investment in skills, technology, capabilities, our people and productivity, and welcomed it as “an important vote of confidence in South Africa and its mining sector”.
This investment and the others that roll in demonstrate there is no shortage of opportunities in SA as we rebuild our manufacturing base and upgrade our infrastructure to improve trading links in Africa and globally.
As Ramaphosa said, investment in SA, especially in manufacturing, is vital.
A recent Proudly South African report confirmed the impressive multiplier effect of such investments. It found that a 10% increase in investment in manufacturing boosts GDP by 13%, with an 8% boost in job creation. There is also an 8.3% overall increase in investment across the economy and a 9% improvement in tax revenues.
It is, therefore, vital to revive South African manufacturing and drive the re-industrialisation of our continent.
We cannot lose the important pillars on which the SA economy has developed — mining, manufacturing, and infrastructure — but its revival will be dependent on more than these.
We must recognise the importance of our globally respected financial services and strong retail sector. Crucially, we must look to the future — to innovative industries, technologies and sectors in which SA cannot afford to be pushed aside.
Just look at the interest shown by local and foreign investors in our renewable-energy programme. Or the world-class standards of our automotive industry, which churns out hundreds of thousands of vehicles for export each year — we sent them to 152 countries last year. It won’t be long before we are obliged to manufacture electric vehicles for export markets and ourselves.
The boost to job creation from a 10% increase in investment in manufacturing.
— IN NUMBERS: 8%
We must always bear in mind that partnership with the government is the way of the future. We in industry welcome the president’s assurances that the government is now aware that it cannot do everything itself.
Other important opportunities are opening up for private-sector involvement and partnerships with the government in port and rail.
I would argue that municipalities responsible for roads and repairs of other infrastructure should also be actively attracting billions of dollars in private-sector support.
Ramaphosa recently addressed the South African Local Government Association's (Salga) Council of Mayors and it was good to see him insisting on better service from many inept, wasteful and corrupt municipalities.
He said: “When local government fails, it is not just service delivery that fails. It isn’t just that our people’s expectations are not met. The failure of local government has a direct and material impact on economic growth and jobs.”
We must decisively end red tape such as that which hampers the issuing of work permits to skilled foreigners. It is unforgivable that there are still complaints about this. It is almost impossible to win back an investor whose frustration has led them to put their money elsewhere
Amen to that. The need for energy and water security, and efficient infrastructure, cannot be over-emphasised. As the president warned, substantive economic activity can’t take place without these.
But are we doing enough to attract and keep investors here? We must not be shy in welcoming them and the benefits they bring. We need to be focused, intentional and proactive in unlocking the country’s growth potential to create jobs, alleviate poverty and reduce inequalities.
Other emerging markets, such as China and Vietnam, have been doing this for decades.
I recently visited Singapore and we can learn a lot from the way this tiny, resource-poor territory has developed into an Asian tiger.
SA has everything to offer, from world-class financial services to impressive infrastructure.
Even the horrors of the Covid crisis highlighted our ingenuity. We couldn’t get enough ventilators from abroad, so we designed and built our own. And they work! We used our existing industrial base to produce sanitisers and are now producing world-class vaccines.
However, investment is about more than just building factories. It is right that when we welcome new investors we ask them to support the transfer of skills to our people and mentor and develop SA’s black entrepreneurs in their supply chains.
Production at Sandvik’s Khomanani facility will see 60% local content. This, where feasible, will ensure the spread of wealth and job creation much further afield in the supply chain.
We must embrace our differences, parade our excellence and open our economy to overseas investors. “Proudly South African” must move from being a slogan to becoming a way of life.
We must decisively end red tape such as that which hampers the issuing of work permits to skilled foreigners. It is unforgivable that there are still complaints about this. It is almost impossible to win back an investor whose frustration has led them to put their money elsewhere.
Ramaphosa knows this. Maybe he should be more insistent, as he was with the mayors, in getting bureaucrats to do what is right.
Investments such as Sandvik's must continue to be courted, encouraged and lauded as part of building up from the ashes of the pandemic.
The fourth industrial revolution presents us with massive opportunities to reset our approach to industrialisation and for our country to attract, welcome and implement world-class manufacturing practices.
Time is not on our side. Let’s do this!
• Dlamini is chair of the board of the local division of Sandvik Mining RSA. He is also chair of Massmart and Aspen Pharmacare.
* This article is based on a speech he delivered at the opening of the Sandvik Khomanani facility in Kempton Park, opened by President Cyril Ramaphosa last week.
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