Investment, specifically raising $100-billion (R1.3-trillion) over the next few years, has emerged as a thread through the President Cyril Ramaphosa administration that on Friday marked Day 99 of his first 100 days.
It first arose in Ramaphosa’s State of the Nation Address (SONA) on 16 February and was backed up a month later with the appointment of four investment envoys, including former finance minister Trevor Manuel and former deputy finance minister Mcebisi Jonas. Also appointed were private sector personalities Phumzile Langeni, Afropulse Executive Chairperson and non-executive director in various boards, and Liberty Chairman Jacko Maree.
“While total fixed investment in our economy stood at 24% of GDP (gross domestic product) in 2008, it has declined to around 19% last year. The National Development Plan (NDP) says we need to increase this to at least 30% of GDP by 2030,” said Ramaphosa in his statement on 16 April.
“Foreign direct investment declined from around R76-billion in 2008 to just R17.6-billion last year. This has been driven by low business confidence and regulatory uncertainty; and has resulted in slow growth, along with poor growth in employment.”
The focus on generating this new investment includes a planned presidential investment council, alongside an investment summit, now confirmed for October 2018.
On Thursday Ramaphosa told editors it had been “hugely encouraging” when he got that call, and offer, from World Economic Forum (WEF) founder and executive chairperson Professor Klaus Schwab.
“When the head of the World Economic Forum, Professor Schwab, saw what we said in SONA, he immediately called and said: ‘I see you want to raise $100-billion dollars.… Mr President, we as WEF with a network of business people around the world, want to support you in this. We want to give you as much support as we can and the first thing we want to do is to come to South Africa and bring almost 100 business people to have a round table. Will you agree we should do so?’.”
Of course, Ramaphosa, who has touted investment as central to job creation and redressing poverty and inequality, agreed. “We are going to have a round table… so we can begin talking about investment in South Africa. So that to me was hugely encouraging.”
It’s telling Schwab telephoned Ramaphosa shortly after delivering SONA as newly-sworn in president after the torrid contestation within the governing ANC over Jacob Zuma’s exit from the Union Buildings after his ANC presidency ended at the party’s December 2017 national conference. Zuma’s Valentine’s Day resignation came after it looked like the ANC parliamentary caucus would have to support an opposition party no confidence motion.
But it’s not necessarily an unexpected phone call by Schwab. He and Ramaphosa met at the WEF Davos get-together at the end of January, when the then still deputy president headed Team South Africa to the Swiss resort. In what a presidency statement later described as “a bilateral meeting” between the two, Ramaphosa “expressed South Africa’s appreciation for the World Economic Forum’s continued support for and commitment to the development of Africa”.
There are other pre-existing ties. South Africa has repeatedly hosted WEF Africa, most recently in May 2017 in Durban where some 1,000 delegates gathered to talk on anything from youth or the fourth industrial revolution under the theme “Achieving Inclusive Growth through Responsive and Responsible Leadership”.
Such meetings are contested for their elite focus. And within South Africa there is a vocal argument against what’s called the neo-liberal agenda, the nice way of saying there are too many business people sitting together in a room to chart the country’s future in their interest.
Ramaphosa – the trade unionist and activist turned MP with a fundamental role in shaping the Constitution, turned businessman with a key say in drafting South Africa’s NDP blueprint to halve poverty, inequality and address joblessness by 2030 who returned to politics, and now president – sees investment slightly differently.
Making South Africa much more attractive to investors – “serious investors” – is central to recalibrating and repositioning the country. As are policy certainty, regulation and cleaning-up corruption and State Capture, or as Ramaphosa puts it, ethical, good governance.
“This administration is determined to root out corruption. Corruption is anti our people, anti-development and anti-progress,” he said on Thursday. “What we did go through was not like us it was not the type of South Africa we want. Why did it happen… ? The fact of the matter is we have gone through a period we want to put behind.”
There appear to have been plenty of more personal, less state administration interactions in which investment and governance are being linked by various private sector companies. Ramaphosa is listening to this refrain, alongside undertakings from State-owned Entities (SoEs) there could be up to R400-billion up for investment from their side.
Meanwhile, there’s also been interest in investing in South Africa by an African business person, who on Thursday remained unnamed.
“I am part interested in winning over a number of African business people (as) investors. And indeed I am interested in getting African pension funds in investing in our country.”
And so the four investment envoys have been told to criss-cross the African continent. Ramaphosa on Thursday said an African businessman called him also, but did not name that person – looking to raise cash from Nairobi to Lagos. And elsewhere.
“If everything stacks up in the country… we believe it is easy for us to commit billions of rands,” said Ramaphosa, adding later: “We can’t call ourselves a middle-income country operating in Africa, where we are seen as a successful country when we don’t have governance… It must be addressed. When you run something, run it properly and run it so well everyone says: ‘Yes, I can invest’.”
With the clock ticking on the official investment summit in October, it’s now all eyes on that WEF-offered investment round table. DM
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