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By Mike Cohen and Manus Cranny
Of the 31 projects that were previously announced, eight have been completed and 17 are under construction or at the implementation stage, Ramaphosa said at a follow-up investment summit in Johannesburg on Wednesday.“We want growth in our economy and we are putting a number of measures in place to correct what business people have said are the impediments and constraints that are holding growth back,” Ramaphosa said in an interview with Bloomberg Television at the gathering.
“Investors had seen our country sliding down, be-deviled by corruption, by state capture,” he said. “We have corrected that and state capture is now being dealt with. We are now focusing on creating that investment climate and environment for them to invest.”
Investment pledges announced at the conference include:
- Pulp and paper maker Sappi said it will spend R14bn ($944m) at four of its plants over the next five years.
- Toyota Motor Corporation intends to invest R2.4bn on building a new hybrid model passenger car in South Africa from 2021.
- The New Development Bank will earmark a minimum of $1.6bn for infrastructure development projects next year.
- Clothing retailers including Woolworths, Foschini and Edcon committed to spending R6.5bn on new manufacturing capacity that will create 20,000 jobs.
- Seven vehicle manufacturers, including BMW, Ford Motor and Volkswagen plan to establish a R6bn fund to encourage more black South Africans to participate in the industry over the next decade.
Despite the uptick in investor interest, the National Treasury projects Africa’s most-industrialised economy will expand an average of just 1.5% over the next three years as electricity shortages constrain output. Lower-than-expected growth has curbed tax revenue, causing debt and deficit levels to soar, and Moody’s Investors Service has warned it may downgrade its assessment of the nation’s debt to junk unless urgent action is taken to turn the situation around.
The government is committed to taking the necessary measures to stabilise its ratio of debt to gross domestic product, and restructure struggling state power utility Eskom. It’s held productive talks with labour unions over what needs to be done, and a new chief executive officer will be appointed within the next few days, Ramaphosa said.
“We don’t have to be dramatic to get things done. We’ve got to work together with our partners,” he said in the interview. “Of course people want dramatic events, they want bones to be broken, they want heads to be smashed. We are saying in this country we have done things a lot better by building consensus and working together.”
Anglo American Chief Executive Officer Mark Cutifani said his company invested R15bn in South African mining projects in the past year and is committed to expanding output at its key platinum mines. While South Africa remains Anglo American’s best operating area in cost terms, more needs to be done to improve the business environment and certainty of power supply, he said in a panel discussion at the summit.
Phuthi Mahanyele-Dabengwa, the CEO of Naspers’s South African unit, said her company also sees scope to invest and expand more in the country, but continued to encounter regulatory hurdles.
The Congress of South African Trade Unions, the country’s largest labour group and a ruling party ally, said while efforts to attract new investment were laudable, the government and business had been “very lethargic” in implementing decisions taken at previous summits.
Cyril Ramaphosa: The Audio Biography
Listen to the story of Cyril Ramaphosa's rise to presidential power, narrated by our very own Alec Hogg.