SA Inc needs to up its game if it wants to attract much needed investment at the South Africa Investment Conference (SAIC) on Thursday.
South Africa needs investment to boost its moribund economy. Last month the SA Reserve Bank’s forecast for gross domestic product growth was lowered slightly to 0.2% from the 0.3% expected in January, as a result of extensive load shedding and logistical constraints.
The economy was forecast to rebound and expand by 1.0% in 2024, up from 0.7%, and by 1.1% in 2025, up from 1.0% previously forecast.
This as the country faces an energy crisis, logistic problems and high crime.
Business Unity South Africa (Busa) CEO Cas Coovadia said yesterday that the country competed for investment with countries in Africa and elsewhere, and it needed to work under the leadership of the government, to address urgently blockages to attracting substantial investment.
Busa had identified three critical priority areas - energy, logistics and law and order - in which South Africa needed urgent interventions to assure potential investors it was addressing their concerns.
“We are making progress in energy with the establishment of the Resource Mobilisation Fund to support the government to implement urgently the President's energy plan. Business stands ready to work with government to address the serious issues in logistics and law and order,” he said.
However, Coovadia said Busa encouraged global and local investment into South Africa to enable sustainable and inclusive economic growth.
“We remain convinced growing our economy at sustainable levels is the only way to address job creation, poverty and inequality,” he said.
Meanwhile, Busi Mavuso, the CEO of Business Leadership SA (BLSA), said in her weekly newsletter on Tuesday, that several recent blunders in how government communicated to the market South Africa, could hamper its efforts to attract investment.
Mavuso said attracting investment was partly a sales job and required constant care to position the “brand” of South Africa as an excellent opportunity for investors, one that offered decent returns and manageable risks.
“Last week was not the best run-up to the conference, to put it mildly. There were several blunders in how government communicates to the market. Perhaps the most painful to watch was the debacle around the exemption given, and then withdrawn, to Eskom to allow it to not report fruitless & wasteful expenditure in its annual financial statements.
“The way it was communicated to the market with the impression created that the exemption was to enable withholding of information from ratings agencies, was a serious blunder. It damages government’s reputation as an honest counterpart to investors,” she said.
Mavuso also took Electricity Minister Kgosientso Ramokgopa to task on his recent communication around Eskom plants, the role of coal and renewable energy, emphasising that he could have done it better.
Mavuso said SA Inc should be talking about Eskom’s progress in restructuring to unbundle an independent grid operator and the rapid build rate of renewable energy plants, and diversifying the country’s energy production base as well as improving the environment for global investors to back the transition of the economy.
This year’s SAIC will mark the fifth leg of President Cyril Ramaphosa’s R1.2 trillion investment drive after the government said it had already raised R1.14 trillion.
Trade and Industry Minister Ebrahim Patel last week said the government was targeting investments of R2 trillion in the next five years.
Patel said the energy crisis was not a good story for investment, but investors were aware that the government was working around the clock to resolve it.
BUSINESS REPORT