EL car maker gives us hope
TODAY Mercedes-Benz South Africa reveals its plans to extend its East London facility, as well as to create an academy to boost skills development in the car manufacturing industry.
It addresses the things we most need in this province. Investment, employment, education and skills development.
The Poverty Trends report recently confirmed that the Eastern Cape remains the poorest province in the country.
It has the highest percentage of poor households with some 12.7% of our estimated population of 6.5 million being defined as “multidimensional” poor.
Most are reliant on social grants as their sole source of income.
On a wider scale, more than a quarter of the population in South Africa live below the food poverty line.
So, the news from Mercedes-Benz is good on all sorts of fronts. It shows a cautious return of investor confidence and goodwill in a country which ratings agencies, not so long ago, had reduced to junk – or near-junk status.
It is an indicator that former president Jacob Zuma’s legacy of corruption, poor public governance, a collapse in public finances, and policy confusion on major issues might slowly erode and be consigned to a history book chronicling his inglorious reign. It is fitting that President Cyril Ramaphosa will be there for the official announcement on this major new investment.
This expansion lines up with his plan to attract over a trillion rands worth of foreign direct investment over the next five years.
Since the announcement of that plan, which includes the creation of a dream team of top finance and business experts of international repute to hunt down elusive investors, the Eastern Cape has had a few investor windfalls.
China has indicated it will invest a R300million tile factory in the East London Industrial Development Zone which will, in turn, create an estimated 1 000 jobs.
Hot on the heels of this news was the recent launch of a R1-billion information and communication technology (ICT) company, Yekani Manufacturing, also at the ELIDZ, which will reportedly create another 1 000 jobs. And now Mercedes-Benz has given its own indication that it has confidence in the future of South Africa.
There is still much to be done to prod foreign investors into action. Policy and political certainty remain elusive.
The failure to act effectively against those who benefited from patronage and corruption under Zuma is disheartening.
Chatter around the expropriation of land without compensation and the nationalisation of the SA Reserve Bank is also likely to make investors squirm.
The ANC will not denounce the two proposals which were decided on at its national congress, but it is also agonisingly slow about implementing them.
So, despite all the good signs, confidence remains shaky in the face of uncertainty.
But investors are cautious creatures who often wait to see what others will do before they act. There is therefore reason to hope that this recent investment bonanza in the Eastern Cape will snowball.