‘Investment strike by business is over’ – we hope

The announcement of investment totaling R290bn is just the kind of news we need in these tough economic times. However, it is one thing to pledge billions in investment but quite another to deliver on the promise. Earlier in 2018, Ramaphosa announced that he wanted to see $100bn in investment over the next five years. He then set up an investment team – consisting of Trevor Manuel, Mcebisi Jonas, Phumzile Langeni, Trudi Makhaya and Jacko Maree – which was tasked with selling SA to international investors. Initially Ramaphosa’s investment goal seemed like a pie in the sky.

However, the signs coming out of last week’s investment summit are promising. A bulk of the pledges came from Anglo American announcing a R71bn investment while Vodacom said they would invest R50bn. The Brics Development Bank pledged R29bn. Closer to home, Mercedes-Benz recommitted themselves to investing R10bn in the expansion of their East London plant.

This prompted Ramaphosa to declare that: “The investment strike by business is over”.

The R290bn is expected to be invested over the next five to 10 years.

Ramaphosa said that SA had also received pledges totaling R400bn from countries he had visited with his five-men investment team over the past six months. The investment summit followed new finance minister Tito Mboweni’s medium-term budget policy statement (MTBPS) which painted a rather gloomy outlook – with the economy expected to grow by a paltry 0.7% in 2018.

The projection was revised down from the initial 1.5% growth announced by former finance minister Malusi Gigaba in his February budget. It is good news. The cordial relations between Ramaphosa’s government and business is also influencing the investment. This is a marked improvement from the cool relations and mistrust that characterised the relationship between Jacob Zuma’s government and the private sector.

The government must also make sure it removes the barriers that make it difficult for business to invest. The only way we can make a dent to our ridiculously high unemployment rate is through much-needed investment. Ramaphosa must now follow up and make sure that business puts its money where its mouth is.

Ramaphosa must now follow up and make sure that business puts its money where its mouth is