Investors concerned but tentatively positive about SA

President Cyril Ramaphosa’s special envoys were buoyed by the billions of rands worth of fresh pledges on Thursday made to South Africa by local and foreign companies during the fourth SA investment conference.

The African Development Bank (ADB) committed to a whopping R42.5 billion over the next five years to boost the economy. But the envoys conceded the pledges did not come without investors expressing concerns about weaknesses.

Investors were worried about policy certainty and the state of governance, especially at local government level. Presidential investment envoy Mcebisi Jonas and tourism emissary Derek Hanekom were happy about South Africa regaining business positivity, with Jonas predicting the R1.2 trillion target set by Ramaphosa in 2018 would be easily surpassed by next year.

Hanekom described the mood as being that of renewed confidence, with overwhelming support for the decisive direction Ramaphosa was taking – the appointment of Chief Justice Raymond Zondo, the swift manner in which the Special Investigating Unit dealt with crime, and happiness with the new Transnet chief executive Portia Derby.

Said Hanekom: “Some positive views articulated by businesses are very encouraging because they want to be part of the solution.

“While there is a general mood of confidence, in my engagements with potential investors I have listened to their concerns [including] the poor state of governance, especially at the local government level. “It is easy to be dismissive of a few potholes, but potholes can very soon become gravel roads once you fail to maintain roads.

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“Drain and storm-water drainage, with a lot of our towns being filthy, is a big concern.

“On the transport sector, road rail and ports all feature as concerns – with there being a big difference between national, provincial and municipal roads.

“They are also concerned about the port capacity to deal with our exports – but happy with some of the changes in Transnet, especially about the appointment of the new CEO.

“Rail is a big problem because it covers passenger and freight. “But generally, there is confidence that things are being attended to.”

Reflecting on the country’s energy challenges, Jonas said SA “a couple of years ago was strong on cheap energy, which was a big seller for investment”.

“With Eskom currently facing challenges, that cheap energy narrative is no longer there for attracting investment. Certainly, we have to fix Eskom.

“But the other issues relate to policy consistency – nut issues that are in some way being addressed.”

He said he was certain about the country “easily reaching the five-year R1.2 trillion target the president set for us in 2018”.

President Cyril Ramaphosa received a standing ovation from local and foreign delegates.

In his address at the Sandton Convention Centre, Ramaphosa said the annual gathering took place “at a moment when our country, like many others, is facing huge challenges as a result of the Covid pandemic… But it could have been far worse”.

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Ramaphosa said the reform programme SA embarked on three years ago was bearing fruit. Dr Akinwumi Adesina, president of the ADB, announced the bank’s commitment of R42.5 billion in South Africa over the next five years.

“This financing will support public and private sector investments in priority areas of agriculture, renewable energy, transport, youth employment, health, vaccines manufacturing, among others,” said Akinwumi.