This week I had the pleasure of hosting a series of discussions with captains of industry and leaders of government at the much-anticipated 5th South Africa Investment Conference, fittingly in Africa’s richest square mile.
While this was familiar territory, this time around I was filled with a range of emotions. On the one hand, I was pleased that all the social partners — government, business, labour and civil society — seemed to have buried the hatchet and were for the first time in a long time singing from the same hymn book.
The adversarial relationship between the government and business seemed to have dissipated as the stakeholders were unanimous in the grim realisation that we face the same challenges and must therefore collaborate to get South Africa out of its morass.
I was saddened, though, by how much time — and money — we have lost to get here. It has taken an avalanche of catastrophic events — such as the debilitating blackouts, the effects of state capture, the collapse of critical state-owned entities (SOEs) and unremitting corruption — to get us to where we are.
We had to face existential challenges before sectoral interests could be put aside for the common cause. It was all so unnecessary. It seems the resilience we often pride ourselves on as South Africans only comes through when we have no alternative but to be resilient.
To be fair, it is remarkable that the government was able to meet — and in fact beat — the audacious targets it set in 2018 of raising commitments of R1.2-trillion in investment over five years.
President Cyril Ramaphosa said in his opening address: “While investment decisions often take several years to reach fruition, the investment commitments made to date have already resulted in substantial investment in the productive economy. Almost 70% of the total number of projects announced since 2018 are either completed or on their way to completion.
“To date, approximately R460bn of capital has been invested in building new factories, purchasing equipment, constructing roads, sinking mineshafts and rolling out broadband infrastructure. What really stands out is the impact of these investments on the lives of South Africans who are now able to earn a decent living and care for their families.”
Ordinary South Africans cannot see themselves in the trillions of rands. We have to do better in measuring the impact of this good work, and reporting on it, regularly and accurately
What makes this even more extraordinary is that this ambitious target was achieved despite a string of setbacks: the outbreak of Covid, which brought economic activity to a screeching halt; the war in Ukraine; the adverse effects of state capture; and the crippling energy shortages.
The ability to raise R1.51-trillion, to be exact, is cause for celebration. As South Africans, we have become so accustomed to doom and gloom that we are oblivious to important milestones. This is a win worth celebrating. And the government has now set its sights on raising R2-trillion in investments over the next five years.
The critical lesson from the Eskom debacle is that we need to be proactive and pre-empt a crisis before it snowballs into a catastrophe. The private sector had lobbied the government ad nauseam to increase the threshold for electricity generation to enable it to generate its own power and relieve the ageing national grid. The proposals made a lot of sense. The government was not going to lose anything by giving private sector investors the room to generate their own energy. Sadly, it took rolling blackouts to get us where we are today. This is a tragic chapter that shouldn’t be repeated.
While on the topic of SOEs, it is imperative the government review its financing model for third-party access to Transnet’s network. We don’t want a sequel of the Eskom drama.
The president acknowledged the critical importance of Transnet when he remarked: “We are equally focused on addressing the crisis in the logistics sector. Transnet’s railway and port constraints are significantly affecting the mining, agriculture, forestry, automotive and manufacturing sectors.”
The government is giving third parties access to the Transnet network, but it is hampering this process by granting short-term contracts to those who have invested in wagons worth hundreds of millions of rand. This financing model simply makes no sense. You can’t finance a long-term asset for a short-term concession.
Finally, I cannot emphasise enough the importance of monitoring, measuring, and reporting on the investment pledges. The overwhelming responses I have received from my numerous social media posts about the investment conference can be summarised as: “So what?”
One of my Twitter followers commented: “On my way to work I heard about this on the radio, the house clapped for this. I haven’t seen a R1.5-trillion impact in my life. Everything has actually gone up. Living expenses are at unprecedented highs. Why is this worth celebrating for me?”
Ordinary South Africans cannot see themselves in the trillions of rand. We have to do better in measuring the impact of this good work, and reporting on it, regularly and accurately. This could include the number of jobs created, the infrastructure built, capital spent and the socioeconomic implications.
The outcomes of these investment conferences shouldn’t be a conversation confined to bankers and accountants in Sandton, it should resonate with the person on the street who needs to benefit from the process.
Despite the challenges we are facing as a country, we can take solace from the fact that all the social partners are now generally pulling in the same direction — notwithstanding the pain it’s taken us to get here.
We have every reason to remain confident that the investment goals we have set for our country can be attained — hopefully at much less cost this time around.
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.