Business Maverick


Ramaphosa claims five-year investment target of R1.2-trillion is on track – but the devil, as always, is in the detail

Ramaphosa claims five-year investment target of R1.2-trillion is on track – but the devil, as always, is in the detail
President Cyril Ramaphosa speaks to journalists at the South Africa Investment Conference in Johannesburg, South Africa, on Thursday, 24 March 2022. (Photo: Waldo Swiegers / Bloomberg via Getty Images)

Mission almost accomplished was the message from the optimistic President at the country’s fourth Investment Conference.

President Cyril Ramaphosa claimed that South Africa’s ambitious five-year target of R1.2-trillion in new investment was within striking distance at the country’s fourth Investment Conference in Sandton on Thursday. 

“We’ve now reached 95% of the ambitious target we set ourselves four years ago,” Ramaphosa told the conference, referring to the R1.2-trillion target that was laid out at the initial conference in 2018.   

The claim is that about R1.14-trillion has now been pledged, compared with R774-billion in investment commitments by the end of the third conference in 2020.  

As always, the devil is in the details. 

For example, Impala Platinum (Implats) “announced” at the conference on Thursday that it was committing about R50-billion to its capital investment programme over the next five years. Implats and its peers have been posting record earnings, and prices for platinum group metals (PGMs) are on the upswing again, not least because of Russia’s invasion of Ukraine. 

Gauteng’s ‘new’ R1.2bn Covid-19 ICU hospitals still lie abandoned, unfinished or underused

But Implats had already essentially flagged this at its latest results presentation and South African mining companies are making loads of cash now because of prices and years of restructuring and pivots to mechanisation, trends which have reduced the workforce. 

South African mining companies still operate in a difficult environment, menaced by “procurement mafias”, while boardrooms remain perplexed by changing policy goalposts.  

More widely, despite all of the pledges and commitments of the past few years, gross fixed capital formation – the key measurement of investment – remains below the pre-pandemic levels of 16.7% of gross domestic product (GDP). The National Development Plan target of 30% remains far out of reach. And UN data suggest that South Africa’s inflows of foreign direct investment remain paltry.  

Many of the pledges are also over a course of many years – boardrooms don’t suddenly press a magical cash button on a whim – so it is not like South Africa has suddenly had a windfall of investment. A “final investment decision”, or FID, is generally taken after months or even years of number crunching, risk assessment, and massive legal and consulting bills.  

No conference, with booths manned by bored employees who drew the wrong straws and long-winded panel discussions featuring buzz terms that would leave you incoherently drunk if you embarked on a drinking game for every one uttered, are going to polish South Africa’s ragged investment image. Structural reform continues at a snail’s pace – the big spectrum auction only just took place at this stage in the 21st century – and plenty remains to be done.  

The July riots of last year are fresh in the minds of companies that lost billions of rands to the mayhem and Eskom can barely keep the lights on. A victory lap will no doubt be run at the next Investment Conference. But regardless of who is leading the ANC or the country then, it will be strewn with potholes and run in the dark. DM/BM


Comments - Please in order to comment.

  • Gordon Pascoe says:

    Blaming the private sector for corruption and crowing above the crowd about foreign investment is merely an attempt to deflect attention away from a corrupt government and inordinate amount of unfriendly government-induced red-tape faced by local business. Unemployment remains high and is in fact growing despite all the so-called “investment”.

    Government is completely tone-deaf when it comes to small business creation and support as they demonstrate a preference to pander up to foreign and big business needs, most of which are counter-productive to small and medium business. They should perhaps identify causes for the massive concentration of business in South Africa in a few hands. The hugely bloated and unproductive government and municipalities sets a poor costly example that does not help either.

  • Jimbo Smith says:

    Classic smoke & mirrors! EWC, Eskom, BEE, crime, corruption, collapsed cities & towns; it will be very brave investors who throw money into this fog! Did Frogboiler provide an update on pledges at the last conference versus real investment? Never; accountability is not in their script.

  • Michael Hennessy says:

    It is to laugh. No electricity, entrenched corruption, inability to prosecute even water tight cases, completely incapable municipalities, matric pass at 35%, unemployment at 45% and counting, no visas for skilled immigrants, expropriation without compensation, but we are still going to get trillions of Rands of investment? Hold on, I have lost my breath.


    Ed, Any chance of getting hold of the guest list? This conference seems to be attended by the same individuals who believe that Russia hasn’t invaded Ukraine. I obviously am not important enough to be invited, so please tell me if th’e non-existent war ‘ was even mentioned. Having just returned from a few weeks in London, I still cannot get over the lack of interest there appears to be in RSA. You cannot talk Economics without factoring this invasion – and YES it is a war.

  • Ann Bown says:

    Pledges are good only if they are honoured – past Investment Rah-Rah party pledges still have to be realised. Don’t get too excited yet!

  • Maria Du Preez says:

    President Ramaphosa would appear to be out of touch with reality. High ideas of investment while his house, the ANC cannot honor the laws of the country and look after their staff.

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