Trudi Makhaya: R150bn is on the way

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President Cyril Ramaphosa’s economic adviser, Trudi Makhaya
President Cyril Ramaphosa’s economic adviser, Trudi Makhaya

About 20 new projects worth a total of R150 billion are set to be unveiled at government’s Investment Summit at the end of the month, according to Trudi Makhaya, President Cyril Ramaphosa’s economic adviser.

The projects will, among other things, cover manufacturing, tourism, agroprocessing, the automotive sector, clean energy, mineral beneficiation and services.

“The investment conference will provide a platform to showcase growth and investment prospects in an economy with vast potential and enormous resources. Investors will have the opportunity to hear from – and engage with – government representatives on its progress towards political and economic renewal, strengthening the credibility of public institutions, and unlocking the latent potential and innovative spirit of South Africa’s economy,” the Investment Summit website says.

The R150 billion in new projects would take pledges and commitments towards Ramaphosa’s target of $100 billion (R1.3 trillion) in investment over five years to more than $45 billion, Makhaya told City Press on Friday.

Achieving the $100 billion investment target remained a “tall order” as “pledges needed to be converted into investments,” she added.

This $45 billion-plus in pledged investment is made up of the R150 billion in new projects to be announced, $10 billion pledged by Saudi Arabia, $10 billion pledged by the United Arab Emirates and $15 billion pledged by China.

The Investment Summit will be held from October 25 to 27 at the Sandton Convention Centre in Johannesburg. The summit is being organised by a steering committee of 22 government departments
Trudi Makhaya, President Cyril Ramaphosa’s economic adviser

About 1 000 people from more than 20 countries are expected to attend the event.

Europe, the US, China and Japan were all set to be well represented at the Investment Summit, Makhaya said. India is also likely to have good representation at the event.

“Our one blind spot is Latin America,” Makhaya said.

The Investment Summit would like to “achieve synergies” with the African Investment Forum, which is being organised by the African Development Bank at the Sandton Convention Centre.

Representatives of key economic sectors will be present at the summit, including agriculture and agroprocessing, mining and minerals beneficiation, manufacturing, transport infrastructure, energy, water infrastructure, information and communications technology, tourism, business process outsourcing and film, venture capital, and entrepreneurship.

Makhaya said that, while about $45 billion in investment had been pledged, only R49 billion, which includes the R10 billion Mercedes-Benz invested in its manufacturing plant in East London, had “definitely been invested” out of the R1.3 trillion target.

Then there is R97 billion in “firm commitments”, R472 billion “has been pledged” and there is R230 billion that is “in the project book”, which leaves a gap to the R1.3 trillion target of R452 billion.

“A lot of the work after the conference would be around converting commitments and pledges into investments and closing the gap [to achieving the ultimate target],” Makhaya said.

“There is work that is being done by the World Bank into InvestSA [a unit of the department of trade and industry] that is about helping them develop their strategy for investment mobilisation. The work on the InvestSA strategy will be key to sharpening how we do investment mobilisation and promotion.

There is a lot of work to be done to reorient investors to South Africa as an investment destination. I think we have fallen off the radar
Makhaya

On the Investment Summit website, there is a 23-page document that makes the “case for investment in South Africa”.

This document also lists the policy reforms that government has initiated, including the gazetting
of the new Mining Charter last month, the move to address land reform across the country and the issuing of the draft Integrated Resource Plan.

“We have been banging the message that this is actually a very sophisticated emerging market, which has a very young population and has access to the continent. That allows companies to invest here and take advantage of the location advantages and the continental opportunity. I think that message has been well received,” Makhaya said.

She added that government’s measures to improve policy would be highlighted at the summit. These measures include improvements to the rules around visas, the new Mining Charter and progress on allocating a better telecommunications spectrum.

The conference would also highlight the R50 billion stimulus and recovery package that reprioritises “high impact” activities; fixing municipalities, “which are a big headache for business”; and consolidating infrastructure spending into vehicles, “which is very important for the investment community to see where we hope some of the financing will come from”.

In April, Ramaphosa announced that he had appointed four investment envoys – former finance minister Trevor Manuel, former deputy finance minister Mcebisi Jonas, and businesspeople Jaco Maree and Phumzile Langeni – to support his plan to raise $100 billion in investment within five years.

There is a team of 10 people at the Industrial Development Corporation (IDC) who are “supporting the whole investment mobilisation”, she said.

Makhaya said that the four investment envoys had different styles and utilised resources differently.

“They certainly have administrative support here [at the IDC]. There are also people working towards the investment conference itself among the 10 people.

“The envoys ... I suppose they are messengers or ambassadors for the president. They have given him quite a bit of reach in terms of taking meetings and engaging with investors. A lot of what they have gathered is specific complaints on particular projects that aren’t moving, which are then channelled to InvestSA.”

The proposal to amend the Constitution to make it easier to expropriate land without compensation had come up as a key issue among investors.

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