The SA Investment Conference (Saic), which took place at the Sandton Convention Centre over three days earlier this week, has been described by several business delegates as a “resounding success”.
Having set a target of attracting R1.2 trillion in new investments over a period of five years, starting from last year, President Cyril Ramaphosa kicked off this year’s event by updating delegates about the commitments pledged by local and international investors at the 2018 conference.
During his opening address, Ramaphosa said a significant number of investment pledges made last year, amounting to almost R300 billion, had materialised.
“Of the 31 projects announced in 2018, eight have been completed and the money has been spent, and 17 are in their construction or implementation phase ... In total, this represents R238 billion of investments that were announced last year,” said the president.
“This is a phenomenal achievement by those who announced the investments and it is gratifying to see commitments materialising.”
Ramaphosa’s economic adviser, Trudi Makhaya, said the second conference was a success, with a reported R363 billion in pledges having been made. “It went well, if you look at our five-year target of R1.2 trillion.”
Added Makhaya: “We have three years to go and we are more than halfway there. Of course, we have to be careful because many of the projects are multiyear projects. We think we are on track, but we also have to monitor very closely how the projects progress.”
A major criticism of the conference since its inception last year has been the inclusion of state-owned enterprises (SOEs) in the process of pledge-making as they already have a legislative obligation to spend money on mandatory initiatives.
This year, a number of SOEs – including rail, port and pipeline entity Transnet, the SA National Roads Agency, Airports Company SA and the Industrial Development Corporation – pledged a combined R75.9 billion.
Makhaya said the idea behind the inclusion of SOEs was that government was trying to improve the economic environment and, as businesses, the SOEs should also play their part.
“These are SOEs that raise money in capital markets all over the world, and they would not be able to raise that money if the environment was hostile,” she said, adding that “the SOEs would not have money if funders were not willing”.
Makhaya said there was no separate financial target for next year’s event as the overall target covered a five-year term. “We just have to make sure that we keep the momentum going and remain on the right track,” she added, “but we also recognise that some investment projects for some sectors may be higher this year. For instance, last year we had a lot of mining projects pledged, whereas next year we may have more from agriculture.”
Among the investment pledges announced this week were the following: the SA Agricultural Development Agency, represented by Roelf Meyer, pledged a R12.9 billion package for 32 agricultural projects involving both first-time and established farmers; the National Association of Automobile Manufacturers of SA unveiled a R6 billion automotive industry transformation fund over 10 years; and mobile giant MTN said it would invest R50 billion in digital infrastructure rollout and property development across 21 countries over five years.
Sandile Zungu, president of the Black Business Council, said the organisation was happy with this year’s conference and the money raised as it showed that the gathering was not just a talk shop.
“We think it went exceptionally well and we are very supportive of what the president is trying to do with this conference. It is a much-needed initiative because countries like America have had to resort to a stimulus package, but in Africa we do not have that luxury,” he said.
Zungu said the inclusion of SOEs was a good idea, given the fact that they formed an integral part of the economy and sourced funds from capital markets in addition to their allocations from Treasury.
“I would be sceptical if they announced monies they got from Treasury as their budget allocations. They are committing new money and I do not see why they should not be able to participate,” he added.
Martin Kingston of Business Unity SA agreed that the conference was a resounding success, saying: “We think that this year’s gathering was well organised and well attended. And, most importantly, the president and his Cabinet ministers were clear on the key issues that need to be addressed. They acknowledged the barriers to investment that need to be addressed and provided us with some reassurance that those constraints would be dealt with expeditiously.
“We feel that there is a lot that can be done and there is an urgent requirement to implement the commitments that were made in terms of addressing those constraints, so that business can make long-term investments, as required.”
Kingston said that while SOEs were an important source of investment capital in the country’s economy, a distinction should be made between private and public sector commitments as the latter was taxpayers’ money.
“We need to clarify if the investments they pledged are maintenance in the business or capital expenditure that formed part of existing business plans,” he said.