Illustrative Image: Patrick Dlamini. (Photo: James Oatway / Gallo Images / Sunday Times) | PIC Logo. (Image: Sourced / Wikicommons) | G20 logo. (Image: G20 Website) 
The Melrose Resolutions, signed in Johannesburg by asset management firms, multilateral development finance institutions and sovereign wealth funds, concluded the PIC Perspectives: G20 Dialogues, ahead of the G20 Leadership Summit this weekend.
The resolutions seek to advance the G20 global development agenda by:
Promoting and co-financing infrastructure investment;
- Proactively seeking co-investment opportunities alongside development finance institutions in blended finance structures;
- De-risking projects and attracting capital; and
- Increasing funding and technical support for project preparation facilities to create a sustainable pipeline of bankable projects.
Addressing more than 120 domestic and overseas investors, David Masondo, the deputy minister of finance and the PIC chairman, noted that the cost of capital and risk perceptions of Africa were impediments to economic and investment growth. He said the continent was endowed with about 20% of the mineral resources needed to meet global decarbonisation targets.
South Africa has said one of its priorities on the G20 critical minerals front is to increase exploration investment. However, it remains far below its own target of attracting at least 5% of global exploration spend, a level it last reached more than two decades ago.
Read more: SA’s G20 drive for Africa to benefit from critical minerals must not try to compete with China
“The world … cannot decarbonise without Africa. Africa cannot industrialise without adding value to these minerals, and both require capital and economic growth. Capital requires confidence,” said Masondo, while urging policymakers to create conditions that are conducive to attracting capital flows. These include macro-economic stability, targeting lower inflation and reducing public debt.
Critical minerals
In addition to a wealth of critical minerals, South Africa boasts one of the most advanced financial services sectors and well-developed financial markets on the continent, supported by strong regulatory frameworks and global integration.
Just a few days ago, S&P Global noted that sustainable debt volumes were increasing in Africa, reaching a record of almost $13-billion in 2024. Africa is one of the few regions where the sustainable finance market has continued to grow in the last two years, despite the headwinds and scrutiny facing sustainability topics globally.
According to the African Development Bank and the UN Economic Commission for Africa, countries in Africa need up to $1.3-trillion per year to fully implement their Sustainable Development Goals.
S&P Global Ratings estimates that about two dozen African countries have markets comparable to other frontier or, in some cases, emerging economies globally. The remaining African countries have smaller markets. South Africa is a notable exception, with deep equity and debt markets that exceed those of some developed economies.
The financial services sector includes:
More than 90 companies managing R8.42-trillion worth of assets as at the end of last year. The top five asset managers account for approximately 65% of total AUM (assets under management), with 91 managing around R860-billion locally.
- A stock exchange (the JSE), which is ranked among the top 20 global equity markets. Earlier this month, the Optasia listing brought the number of companies listed on the JSE to 275, with an overall market capitalisation of R23.44-trillion.
- Masondo says the top four South African banks hold assets equivalent to 118% of GDP (R6.9-trillion). Their combined full-year headline earnings in 2024 reached R119-billion.
- Long-term insurers held R4.5-trillion in assets by the end of 2024, and paid a record R639-billion in claims and benefits.
Patrick Dlamini, PIC’s CEO, explained that credible, transparent policy frameworks, demonstrating sound corporate governance standards and respect for the rule of law, were essential to instil confidence in global investment partners.
“We are paying the highest risk premiums on the African continent. We want to work with international partners and inspire confidence to invest in our country and in Africa. We want to make sure that there is harmonisation in policies across the continent so that investors and partners like multilateral DFIs can work with us to create a better environment that attracts increased capital flows,” Dlamini told investors.
The resolution comes on the back of calls to address the dire need for sustainable finance solutions on the African continent.
Alexander Ekbom, an analyst at S&P Global, pointed out that the African Development Bank Group and various World Bank entities had supported sovereign issuers by offering partial guarantees.
“For example, a debt-for-development swap enabled Côte d’Ivoire to replace high-yielding debt with a lower-cost loan from commercial banks using a partial guarantee from the World Bank’s new guarantee platform. The estimated net present value benefit amounted to €60-million. These guarantees have helped other countries lower borrowing costs and access a wider pool of investors, strengthening overall market credibility,” he said.
Closer to home, the PIC has certainly put its money where its mouth is, recently setting aside R1.35-billion to be invested across diversified commodities, geographies and development stages. This approach aims to mitigate the high-risk nature of early-stage mining investments while delivering attractive returns for PIC clients.
The size of the investments will be between R100-million and R400-million. At least 50% of the projects must be in South Africa, with the rest in Africa. DM