The president had fun at his annual investment conference in Sandton on Tuesday. Star of the show, he managed to pull off a slightly Trumpian format where the CEOs of companies who had made investment “pledges” were called up to greet him on a podium to publicly affirm their offering.
“Committing to R12.8bn: Vodacom!” said the MC into his mic, whereupon Takalani Netshitenzhe, Vodacom’s external affairs director and a former ambassador, rose from her seat and climbed onto the podium to shake Cyril Ramaphosa’s hand. “Thank you, Vodacom,” said the MC again as she left.
As she walked away a second MC spoke: “A huge, huge part of the South African industrial economy is the automotive manufacturing sector, in fact some say one of the best in the world, and to that end R10.4bn in KwaZulu-Natal from Toyota.”
“Well done, Toyota!” said the first MC as Toyota South Africa CEO Andrew Kirby got up from his seat to climb the stairs and acknowledge his company’s “pledge”. I’ve never met Kirby (his press people keep me away) but I’m a Toyota driver and he’s my local industrial hero, so it was very uncomfortable watching him do what was obviously a political duty.
It was impossible to know exactly what the pledging companies were promising to do. But then it dawned on me that the very inexactitude of the pledges — and the fact that since Monday the presidency has said the pledges cover both five years and three years, and then that Ramaphosa said in the middle of the event he had decided (no task team required) to change the investment target from R2-trillion (that’s two thousand billion rand) to R3-trillion ― mean that vagueness is the story.
Ramaphosa is making this up as he goes along. “It’s deliberately vague,” said an old business hand. “There’ll be some announcements saved up, but it’s mostly what companies would do anyway. There’s no FDI in there.”
FDI? Yes, foreign direct investment. And it’s true, there certainly wasn’t any greenfield FDI announced. If there had been we’d have heard about it. The Toyota R10.4bn over five years would be largely operational. The Vodacom R12.8bn almost certainly includes the R11.5bn it has just paid for a 30% stake in Maziv, the owner of Vumatel and Dark Fibre Africa.
So the conference is a marketing exercise. A lot of the money was in property development and a huge heap of it was from state agencies, which we indirectly fund in the first place. There’s nothing wrong with marketing your country like this, except that you have now convinced your man in the street that you’re doing far better attracting investment than you actually are. And you understand, surely, that you shouldn’t deliberately mislead people.
The arithmetic is easy. The gross fixed capital investment figure you’re chasing if you want to cut unemployment in this country is at least 25% of GDP. It’s arcane stuff, I know, but this number is commonly accepted.
According to the IMF, South Africa’s GDP was $426.4bn for 2025. That is roughly R7.25-trillion. Over three years the R3-trillion in fixed investment Ramaphosa is chasing would be R1-trillion a year. That in turn would be 13.8% of our GDP each year. Over five years the R3-trillion becomes R600bn a year, or just 8.27% of GDP.
So whether the president is chasing R3-trillion over three years or five years he is absolutely miles behind the curve of the fixed capital investment levels required to get this country out of bed. I accept that the news has been better lately, largely due to the fiscal discipline of the National Treasury, and that our prospects have begun to look sharper.
But then US President Donald Trump and Israeli Prime Minister Benjamin Netanyahu decided to go to war with Iran. It has been more than a month now and the world is beginning to wither under the effects. Oil, gas and fertiliser prices have risen sharply. Major Asian economies such as Thailand, Vietnam and Malaysia are working a short week. The price of literally everything in South Africa will rise with this, and it won’t go away soon.
The government, distracted by the few scraps of good fortune it has received in the past few months, is not remotely ready for the economic shock to come. Fool that he is, Trump now has more than 5,000 marines and paratroopers in the conflict zone, and the betting is he’ll try to use them on Iranian soil.
If he does, Ramaphosa’s 2027 Investment Conference is going to be a far more sombre affair than the party he threw himself this past Tuesday.
• Bruce is a former editor of Business Day and the Financial Mail.
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.