Ramaphosa says South Africa’s investment drive on track

South African president Cyril Ramaphosa said his administration is on track to lure $100 billion in new investment within five years, with more than $16 billion already committed and many more projects in the pipeline.

With the economy stagnating, an unemployment rate approaching 30% and the country in danger of losing its sole investment-grade credit rating as the state’s finances deteriorate, Ramaphosa needs an injection of new capital to shore up economic growth.

His campaign got off to a good start in October last year when an international investment conference secured pledges that helped push inflows to a five-year high.

Of the 31 projects that were announced, eight have been completed and 17 are under construction or at the implementation stage, Ramaphosa said at the opening of a follow-up investment summit in Johannesburg on Wednesday.

“We are clear about what we need to do, and we are marshaling our every resource and our every capability to do it,” he told delegates. “We are on a path of removing impediments and constraints to inclusive growth.”

The government is making progress in meeting promises to remove hurdles to investment, provide greater policy certainty and ease visa rules, according to the president.

Despite the uptick in investor interest, the National Treasury projects Africa’s most-industrialized economy will expand an average of just 1.5% over the next three years as electricity shortages constrain output. Lower-than-expected growth has curbed tax revenue, causing debt and deficit levels to soar, and Moody’s Investors Service has warned it may downgrade its assessment of the nation’s debt to junk unless urgent action is taken to turn the situation around.

The government is committed to taking the necessary measures to stabilize its ratio of debt to gross domestic product, and restructure and modernize struggling state power utility Eskom Holdings SOC Ltd, Ramaphosa said.

“An immediate priority is appointing a CEO and strengthening governance through revamping the board, which we will do in the next few days,” he said.

The Congress of South African Trade Unions, the country’s largest labor group and an ally of the ruling party, said while efforts to attract new investment were laudable, the government and business had been “very lethargic” in implementing decisions taken at previous summits.

“Cosatu hopes that the government and industry will not forget its purpose, namely, to grow the economy and ensure all workers have decent permanent jobs,” the federation said. “Whilst we welcome investments, workers will not accept slave wages and the eradication of their rights.”

Read: South Africa has 3 months to defend investment-grade rating

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Ramaphosa says South Africa’s investment drive on track