Business Maverick

SA INVESTMENT CONFERENCE

President Ramaphosa moves to calm investor fears over the wave of rolling blackouts

President Ramaphosa moves to calm investor fears over the wave of rolling blackouts
President Cyril Ramaphosa delivers the opening address at the South Africa Investment Conference in Johannesburg. (Photo: Jairus Mmutle / GCIS)

During his speech to more than 1,000 delegates at the South Africa Investment Conference, the president acknowledged that investor confidence in the country ‘has been tested’ by rolling blackouts and the government’s inability to ease the crisis over the past 16 years.

President Cyril Ramaphosa urged international and domestic investors to continue backing South Africa and his new target of raising investments worth R2-trillion over the next five years despite a persisting power crisis that stifles the economy, dents confidence in the country and undermines investment levels. 

Ramaphosa faced an uphill battle in convincing investors to pour new investments into the country as his administration has overseen power cuts that have become part of daily life, rampant crime and corruption, and failures in South Africa’s rail and port operations. South Africa is also seen by the world as a haven for money laundering, terrorist financing and other financial crimes after the country was recently  greylisted by the Financial Action Task Force. 

Read more in Daily Maverick: It’s official – South Africa fails to avoid greylisting 

Ramaphosa opened the last leg of his investment conference on Thursday, a day when many parts of South Africa were thrown into a deeper level of blackouts (Stage 6). Ramaphosa addressed delegates in Sandton, speaking about his plans to ease the electricity crisis, while the swanky business district was plunged into four hours of load shedding. 

The conference had a delayed start, with some delegates complaining about traffic congestion in Sandton, mostly caused by traffic lights that were off (again, due to blackouts). 

In his speech to more than 1,000 delegates, Ramaphosa acknowledged that investor confidence in South Africa “has been tested” by rolling blackouts and the government’s inability to ease the crisis over the past 16 years. 

“The lack of reliable energy supply weakens business and confidence. It also affects investments and confidence in South Africa,” he said.

Critics of his investment drive say many of the investment pledges are not new because companies were planning to roll them out anyway as part of their five- or 10-year capital allocation programmes.

“We are on a long journey to rebuild our country and recover the ground that we lost despite the challenges we have. Recovery will take time to accomplish. We are confident that we will recover.” 

He added that South Africa still remains an “ideal investment destination”. 

Arguably, many people would disagree with Ramaphosa considering that metrics that measure South Africa’s development are heading in the wrong direction. 

Over the past 14 years South Africa has moved further away from the National Development Plan’s (NDP’s) goal for fixed capital investments, which measures the level of investments in the country’s economy. The NDP targeted fixed capital investments to reach 30% of GDP by 2030. From a level of 22% of GDP in 2008, fixed capital investment levels fell to 20.3% in 2015 and further down to 17.9% in 2019.

The economy is barely growing at levels that are required to boost investments in the country, create jobs and improve the quality of life of citizens. 

The World Bank’s latest forecast sees South Africa’s economy growing by 0.5% in 2023. The SA Reserve Bank forecasts growth of just 0.2%, while the International Monetary Fund sees growth of 0.1%. 

Ramaphosa set a five-year target to raise R1.2-trillion in investments – a target he set in 2018 after he was elected President to replace Jacob Zuma, whose presidency decimated business confidence and investment spending. Ramaphosa said he reached this target and plans to get R60-billion in additional pledges from domestic and international investors to exceed his initial R1.2-trillion. 

Of the R1.2-trillion investment pledges, about R460-billion of capital has been invested in building new factories, buying equipment, building roads, sinking mine shafts and rolling out broadband infrastructure, according to Ramaphosa. 

Critics of his investment drive say many of the investment pledges are not new because companies were planning to roll them out anyway as part of their five- or 10-year capital allocation programmes. Many executives came to the investment conference simply to pledge investments that had already been budgeted. 

Energy plans

To ease investor concerns about rolling blackouts, Ramaphosa repeated some of the energy plans that have been accepted by Cabinet, including removing the threshold for self-generation energy projects, procuring more wind and solar energy from private-sector players, offering tax incentives for businesses and households for installing solar energy systems, and pressing ahead with the Just Energy Transition Investment Plan.  

The President also said the focus is improving the performance of Eskom’s coal-fired power stations “as they continue to provide a base load of energy in South Africa”.  

President Cyril Ramaphosa also announced a new visa regime to facilitate the entry of skilled labour into the country. (Photo: Jairus Mmutle / GCIS)

“Load shedding will remain a challenge in the immediate future but its severity will ease as the reforms are being put in place.”

On a separate matter, Ramaphosa announced a new visa regime to facilitate the entry of skilled labour into the country, and allow multinational companies to employ their own executives and technicians from outside the country.

This visa plan will include decentralising the adjudication of visa applications to foreign missions; streamlining application requirements to reduce the timeframes for obtaining a work visa; introducing a trusted employer scheme for qualifying companies; and establishing a points-based system to provide more flexible pathways for skilled applicants, in line with global best practice. 

The government also plans to expand the e-Visa system to include an additional 20 countries over and above the 14 that are currently eligible, and will extend it to cover new visa categories such as study, business and intracompany transfer visas. DM/BM

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Comments - Please in order to comment.

  • Hermann Funk says:

    He should just remain staying in cloud cuckoo land and carry on dreaming His inactivity has brought the country to the edge.

  • José Lueje says:

    You forgot a disappearing road network !.

  • Trenton Carr says:

    Blah blah blah blah blah blah blah

  • Confucious Says says:

    No matter what bullish!t this guy says, there is still no electricity! Eskom is also trying to punish IPPs, so how can he have anything positive to say about investing in SA? Then there are the political issues and crime!

  • Johan Buys says:

    Forgive me if, after 10 hours of diesel generators running, I am not applauding the President.

    Maybe it is time to shake the tree?

  • Charles R says:

    Do nothing is your best trait. Cyril

  • Michael Shepstone says:

    Cyril is so far divorced from the reality on the ground! He is making himself and South Africa an international joke!

  • Piet van der Merwe says:

    Ramapromises.

  • Reg Bray says:

    Strange though…. When the ANC received the country there was NOTHING to rebuild. Everything was working… all they had to do was maintain it. So… ‘on the road to rebuilding the country’ is a load of nonsense Cyril!! Take responsibility for your actions… usually the first quality of a good leader… and what about a great leader? Well that lesson in my next comment. Thanks DM

    Oh P.S: How much investment did Cyril glean for his Ankole Cattle Business at Phala Phala… maybe a question someone should ask him?

    • Rory Short says:

      “When the ANC received the country there was NOTHING to rebuild.”
      True, the ANC took over a materially fully functioning country in 1994. It was politically skewed under Apartheid, however, that is all that needed to be fixed and the ANC getting into government was supposed to fix that. Unfortunately the ANC then set about wrecking the country materially. CR never likes to admit this though preferring to give the impression, especially to foreigners, that any problem is because of Apartheid.

  • Craig A says:

    “Of the R1.2-trillion investment pledges, about R460-billion of capital has been invested in building new factories, buying equipment…..”. And the balance went to ‘facilitation and consulting fees’.
    Ramaparra, you want to ‘rebuild’ our country that your party has destroyed? I had high hopes for you and you could have made a difference but you are no better than the criminals running our country. It is a disgrace that this beautiful country is a total mess.

  • roland rink says:

    words of wisdom……….
    Don’t be fooled, many benefit from a dysfunctional society.
    South Africa functions all too well for the vested interests of those who profit from its destruction.
    09 April 2023 – Sunday Times
    BY LINDIWE MAZIBUKO
    When I was studying in the US, one of my favourite professors used to remind us regularly there is no such thing as a broken system. Whether it is an economic, political social or public sector system, what appears broken to you and me is in fact working perfectly for somebody who has a vested interest in maintaining a dysfunctional status quo. And they will usually do whatever it takes to maintain — even exacerbate — this brokenness.

  • M P says:

    How anyone can sit at this conference and listen to this drivel is astounding!

    The anc has bought this country to its knees. We need someone like Dr. Imtiaz Sooliman (Gift of the Givers) to take the helm. Not another politician. Julius is unhinged and God(zille) is still playing puppet master at the DA. There seems no real alternative.

    The majority of those in government have one agenda- feed at the trough and enrich themselves before the funds run dry.

    Private business and citizens need to step in and take the reigns or there will be nothing left to save, and we will be just another failed African state.

  • Hilary Morris says:

    Does anyone even listen to this empty-promises man? The biggest disappointment ever.

  • Mark O’Malley says:

    CR is only here because he, unlike his predecessor, can read a prepared speech off a screen. In the Land of the Blind one eye is king. The happy pills which he has been distributing for the last 5 years are no longer working.
    longer

  • Jimbo Smith says:

    This guy is beyond belief!! Flowery cliches, endless talk, multiple promises but in the end it all amounts to NOTHING! The ANC took over a functioning economy and it 30 odd years they have reduced just about everything to rubble; ESKOM,Transnet, SAA, Ports, Education, Health care. Unemployment & crime through the roof! And he implies they are rebuilding it all as if it is not the fault of his ANC buddies & cadres. Incomprehensible!!!

    • roland rink says:

      The Afrikaans language has a wonderfully descriptive word that applies – Stofpoeper!

    • Garth Kruger says:

      agree with you, Tim. Its as if he is living in a different country. And how anyone can actually take anything he says seriously is a complete mystery to me. We are in serious trouble.

      • Anthony Sturges says:

        ‘…how anyone can actually take anything seriously…’ I don’t think they do quite frankly. Any serious investor will do their due diligence before parting with their money – and if done properly, it will reveal a whole Pandora’s box!

  • Dou Pienaar says:

    CR makes me understand the term: ‘living in a fools paradise’

    • He talked about his “visa plans to facilitate the entry of skilled labour into the country” and then he signed off the Employment Equity Amendment Bill. I wonder whether these skilled labour individuals will be subject to this new Bill. Is he out of his flippin’ mind? His party is inexorably steering this country towards the abyss of economic failure with their myopic ideology.

  • Johann du Toit says:

    I just wonder what is excellent about “His Excelency”?

  • Anne Fischer says:

    Really?!? Is this the welcome mat for a whole bunch of Chinese & Russian workers??? But we chuck the legit Zimbabweans out?!?

    • Rod H MacLeod says:

      “We are on a long journey to rebuild our country and recover the ground that we lost despite the challenges we have. Recovery will take time to accomplish. We are confident that we will recover.”
      Einstein’s parable of quantum insanity. It may be that if you do the same thing you get a different outcome, like throwing dice – but then you’re just gambling without any clear pathway to recovery. Hope is not a strategy, Mr President.

    • Pierre Rossouw says:

      Anne, you forgot the Cubans. Don’t let them feel neglected.

  • Grimalkin Joyce says:

    Oh, Uncle C! how about trying to convince us, those who LIVE IN SOUTH AFRICA, that it’s a good investment prospect? This is embarrassing – the delegates at the conference are not stupid. They’re probably just enjoying the break and the (doubtless) excellent hospitality. At our expense.

  • owen steyn says:

    cyril the boneless, why dont you shut up and ship out, useless lumpenproleteriat

  • Trevor Jones says:

    We retired in January 2016. We opted for two flats, having sold our large house when our kids left home. One in the UK, and a lock up and go in Plettenberg.
    This “loadshedding”, called power cuts everywhere else, has taken the shine off our time in SA. We’ve installed an inverter, so as not to be cut off halfway through calls with our kids, or online banking, etc, and to be able to at least read a book when the power goes off.

    Still, it’s a ballsache when you plan a day out, timing your return to coincide with the power coming back on, to find that the buggers have changed the schedule yet again.

    Plett lives on tourism, foreign tourists bring in the money as Saffers don’t go whale watching, or to the elephant Park. I’ve heard more than once European tourists trying to get a coffee, being told, “sorry, no electricity, so no coffee”, and saying out loud, “That’s the last time we come here”.
    I’m so glad I’m retired, as trying to run a business with no power half the time would certainly have driven me insane. If the Maverick and the TV can say where the problem is, where the crime is, why the hell can the government not put a stop to this?????

    • Garth Kruger says:

      I flew to Amsterdam two weeks ago. Behind me were two ladies talking, one a visitor to SA returning home and one a Saffer. The Saffer asks the visitor lady how as it?

      The visitor lady says: embarrassing.

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