SA needs to up economic growth
Jonas says more needs be done to get greater investment into country
Former finance MEC Mcebisi Jonas says South Africa needs to increase its investment “to over 30% of GDP to create the economic growth and jobs that we need”.
Currently, the Eastern Cape contributes about 17.5% of the gross domestic product, a few percentage points compared to the 19% for SA as a whole.
“Both figures are too low. We need to ramp up its investment,” he said while addressing the inaugural Eastern Cape investment conference held at the East London International Convention Centre on Tuesday.
Jonas is one of the four people President Cyril Ramaphosa hand-picked to become investment envoys.
The target Ramaphosa set for Jonas, former finance minister Trevor Manuel, Jack Maree and Phumzile Mlangeni to bring $100-billion of investment to the country.
He said often what investors want are simple things such as clean, safe environments, good schools, health facilities and clean beaches.
He said if the province wants to turn the corner, and speed up its investment pipeline, one must have accurate understanding of the structural characteristics of the provincial economy, which include the fact that “our two relatively small metros are insufficiently dynamic.
“Our cities are not acting as engines of growth, although I have seen improvements of late in how BCM is beginning to focus on reducing costs of business. What must be done to make our cities more investment attractive?” he said. Other areas of concern are:
That the province has a relatively small private sector. How can we entrench a more business-friendly and investor supportive environment, throughout the province?
The public sector is relatively large, particularly in the six rural districts. He said the Eastern Cape relies too much on public investment, which is problematic during a period of fiscal consolidation.
“There is also evidence that we have failed to get our fair share of investment from stateowned companies (SOCs). We are a neglected province with regards to our SOCs and we need to think how we turn this around,” said Jonas.
Agricultural accounts for only about 2% of investment, despite the province’s favourable natural endowments of fertile land and water. “Public sector investments in agriculture and agro-processing projects typically fail. How to boost private investment in the sector,” he said.
Jonas said it was also important to take advantage of the province’s access to the 800km coastline, saying it “is a clear provincial asset”.
“But how can we quickly move these government-led initiatives into sustainable community and industry/business ventures on the ground? Surely it is taking too long to make available coastal publiclyowned land parcels available to private investors on long-term leases,” he added.
These were some of the questions which would have to be answered when the province, after Tuesday’s discussions, crafts its investment book. This is the document which President Ramaphosa asked each province to submit to help each one source investment for all its priority projects going forward.
The discussions come while Eastern Cape residents await the state of province address, to hear whether the Premier Phumulo Masualle-led government has sourced funding for projects such as Umzimvubu water catchments, Project Umthombo are not just a pipe dream.
Jonas said the province has a huge investment pipeline of concepts and generalised business cases, but actual investment is too low.
“We need an honest discussion on why your investment pipeline is too slow-moving. Are we doing enough to get opportunities investment ready for private investors?
“Are we looking after investors who have already invested, who could be our greatest ambassadors or greatest adversaries,” he said.