LETTERS TO THE EDITOR

Trust, not just co-ordination, unlocks investment in South Africa

Rufaro Mafinyani’s article, “SA lacks infrastructure co-ordination, not capital” (July 10), advances a persuasive, but ultimately incomplete, explanation for South Africa’s persistent investment shortfall.

The country does not suffer from a shortage of capital; on the contrary, substantial pools of domestic capital exist within companies, pension funds and institutional investors. The more serious problem is that this capital is clearly reluctant to commit itself to long-term domestic opportunities where the state is no longer regarded as a credible, competent and trustworthy economic partner.

Capital is not mobilised by exhortation, policy slogans or investment conferences. It moves when risk can be assessed with confidence, when rules are stable, and when institutions can be trusted to honour their obligations. Years of corruption, state capture, procurement abuse, administrative failure and policy inconsistency have weakened the investment environment. To describe the problem chiefly as one of co-ordination understates the extent to which public credibility has been eroded.

The private sector has already demonstrated that it will invest when credible conditions are created. The expansion of private renewable energy after regulatory reform is a useful example. Investors responded not merely because co-ordination improved but because the rules became clearer and the state ceased to be the sole bottleneck. This distinction matters. Co-ordination may assist investment, but it cannot substitute for confidence in the institutions that are expected to enable, regulate and deliver it.

South Africa’s central economic challenge is therefore not simply a co-ordination failure; it is a credibility failure. Infrastructure plans may be technically sound, but if procurement is opaque, project execution unreliable and accountability weak, private capital will either demand excessive protection or remain on the sidelines.

Rebuilding confidence requires visible consequences for corruption, professionalised procurement, capable public institutions and a stable policy environment. Financing structures and investment platforms may help, but they cannot substitute for trust. Until government is seen as reliable, accountable and predictable, much of South Africa’s available capital will continue to seek safer opportunities elsewhere.

John Catsicas

Via email

Stockpiling fuel addresses the symptom, not the root cause

Mineral & petroleum resources minister Gwede Mantashe’s proposal to require 21 days of private-sector fuel reserves, in addition to 90 days of government stock, is a reasonable response to a genuine vulnerability (“Mantashe wants oil firms to stockpile 21 days of fuel, at their cost”, July 13).

South Africa imports most of its refined fuel, and his department’s estimate that a major supply disruption could cost the economy R1bn a day underscores the need to strengthen the country’s energy resilience. However, strategic fuel reserves are ultimately an insurance policy against a risk that could also be reduced at its source.

While constructing new storage facilities and maintaining costly fuel inventories may improve short-term resilience, they will do little to reduce South Africa’s underlying dependence on imported fuel.

Electrifying transport, especially high-utilisation commercial fleets operating on major transport corridors, should be part of the discussion. Off-grid, solar-powered charging infrastructure allows transport energy to be generated where it is needed, reducing reliance on imported fuel and insulating parts of the transport system from shipping disruptions, geopolitical conflict and currency volatility.

If the objective is long-term energy security rather than short-term crisis management, the government should complement strategic fuel reserves with policies that accelerate transport electrification and local energy generation. Incentivising these alternatives would reduce future dependence on imported fuel, alongside investments in storage and emergency reserves.

Building resilience in this way will ultimately be far more sustainable than relying solely on large fuel stockpiles.

Joubert Roux

Co-founder and chair, Zero Carbon Charge (CHARGE)

Reward companies supporting early childhood development through BEE

I am on the board of trustees of the Ikhwezi Educare Trust, which runs an early childhood development (ECD) school in the informal settlement of Xolanaledi in Grabouw, Western Cape.

The school is an oasis of safety, nutrition and learning for 164 children aged three to six years old. Forty percent of our funding comes from the state and provincial education departments, and the balance from donors who are largely foreign. In January this year our principal had to turn away more than 100 children due to resource constraints.

It is widely accepted that ECD is a critical societal responsibility, as learning, safety and nutrition at this stage contribute to the formation of the child’s character and self-confidence for the rest of their lives and how they will adapt to, and contribute to, society.

My primary role is fundraising, and all my attempts at securing funding from ECD NGOs and South African companies have come to nothing. The Who Owns Whom (WOWeb) database does identify companies that currently have ECD initiatives, but my attempts at securing funding from these companies have been met with the response that funding is already committed.

Given the current review of the BEE scorecard by the department of trade, industry & competition, it should consider offering companies a bonus point on the scorecard for ECD initiatives. This is not a grudge spend, as investment in ECD does appeal to executives, and if they gained an additional bonus point, it would redirect substantial additional funding into this critical investment in the next generation.

Andrew McGregor

Ikhwezi Educare Trust

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