South African lenders have more than enough resources to meet President Cyril Ramaphosa\u2019s efforts to bolster economic growth and lure more investment into the country.<\/p>\n
The challenge is finding bankable projects.<\/p>\n
“From a banking perspective there\u2019s plenty of capital and plenty of appetite for growth,” said James Formby, CEO of FirstRand Ltd.\u2019s investment-banking unit Rand Merchant Bank.<\/p>\n
“The shortage is the projects and the opportunities to lend against.”<\/p>\n
Ramaphosa kicked his drive to attract $100 billion in new investments over the next five years into higher gear on Friday with a conference in Johannesburg that attracted more than 1,000 delegates.<\/p>\n
Since announcing the program in April, the president has secured pledges from Saudi Arabia, China, the United Arab Emirates and Daimler AG\u2019s Mercedes-Benz unit totaling $35.5 billion. Another $8 billion was pledged on Friday, although not all of it new.<\/p>\n
“It\u2019s a great opportunity for South Africa to showcase business opportunities,” Formby said on the sidelines of the summit.<\/p>\n
“It\u2019s unusual to get such a large business and government community together so in itself that\u2019s very valuable. Whether it\u2019s a silver bullet or not, I think there are many things we are going to do inch-by-inch to get the economy moving. It\u2019s a start.”<\/p>\n
With elections due to take place next year and support for the ruling African National Congress waning, Ramaphosa needs to show he\u2019s delivering on pledges to revive an economy mired in recession and create jobs for the 27% of the workforce that\u2019s unemployed.<\/p>\n
The 65-year-old lawyer and former labor-union leader took office in February, after the African National Congress forced Jacob Zuma to step down following an almost nine-year tenure marred by scandal, policy missteps and inappropriate appointments.<\/p>\n
“South Africans will be motivated to commit to projects they have probably been sitting on the fence on,” said Stephen Koseff, the former CEO of Investec, owner of one of South Africa\u2019s largest money managers and the country\u2019s fifth-biggest bank.<\/p>\n
Ramaphosa\u2019s administration has brought clarity to the nation\u2019s mining laws and pledged to protect property rights as part of its land reform project, which gives investors comfort, he said.<\/p>\n
\u201cAs you create policy certainty and you become a business enabler you will see the economy start growing,\u201d he said. “There\u2019s no point growing at 3%. We have to grow at 5 or 6% to make a meaningful difference. That\u2019s our challenge.\u201d<\/p>\n
Ramaphosa\u2019s five-point economic stimulus and recovery plan announced in September hinges on rejigging spending, starting an infrastructure fund, improving the education and health sectors and investing in municipal social infrastructure. Newly appointed Finance Minister Tito Mboweni plans to move around R32.4 billion ($2.3 billion) of expenditure over the next three to target projects aimed at igniting growth.<\/p>\n
Apart from mining, telecommunications and agriculture are other areas where \u201cSouth Africa can certainly do more than it has,\u201d said RMB\u2019s Formby.<\/p>\n
Investec\u2019s Koseff, who stepped down at the beginning of this month, also sees tourism as another way of stimulating the economy as long as the country creates a \u201cculture that is user friendly.\u201d<\/p>\n