South Africa calls for investment to boost economic transformation

South Africa has managed to secure more than $20bn (almost €18bn) in pledges at this year’s South Africa Investment Conference in Johannesburg. Africa’s most industrialised economy is close to reaching its target of $100bn (€90bn) worth of investment over five years.

Positioning South Africa as a global investment hub is key to President Cyril Ramaphosa’s economic reform and recovery strategy.

Addressing delegates Ramaphosa declared: "It is nearly four years since we embarked on the ambitious drive, as minister Patel was saying, to raise R1.2 trillion in new investment over five years. Now, despite the impact of the pandemic, by the time of the 3rd South Africa Investment Conference in 2020, we had raised, and we had pledged, a total of R774 billion (around €470) in investment commitments.”

One of the main sectors getting attention from investors is energy. G7 nations have announced they will commit $8.5bn (€7.6) to help the country break its dependence on coal.

"The African Development Bank believes in South Africa. You can see it in what we do. The bank's current portfolio in South Africa totals $3.2 billion,” African Development Bank President Akinwumi Adesina said.

New commodity boom

Mining in South Africa is a major source of foreign exchange and jobs and the new commodity boom appears to be fuelling investor confidence.

Mzila Mthenjane, Head of Stakeholder Affairs at Exxaro said platinum is a big part of that.

"I think you would have seen that from the R770 billion (about $500 million or €470) that has been achieved with the South Africa investment drive that I think mining consists of about R150 billion of that. And we saw some that being pledged by some of the mining companies across different sectors of mining, with platinum driving the largest component of that investment drive."

According to government budget forecasts, almost all the economy’s major sectors are projected to bounce back from the pandemic and return to growth.

South Africa is a member of the BRICS bloc which also includes the major markets of China and India. South Africa is banking on its road and port infrastructure, believing it will reduce disruptions to global supply chains and allows exporters to reach international markets with ease.

The country boasts a burgeoning middle class and is a key member of the African Continental Free Trade Area, the world’s largest free-trade bloc.

“We have vast, vast resources of platinum. We have vast resources of gold. We still have coal. I think coal is still in our midst. And, the key is that we have to move further and not only taking these commodities out of the country but let's create industries within those commodities,” George Sebulela, from Brand SA told Euronews.

Meanwhile, French companies announced over €1.8 billion in new investments in the health, tourism, retail, manufacturing and agro-processing sectors.

Speaking to Euronews, the CEO of Saint-Gobain Africa, Jean-Claude Lassere said: "France has been present in South Africa for many many years. We have more than 400 companies here with 65,000 employees. So we are in reality in a multi-sectoral environment. We committed in 2019 R20 billion investment (just over $1bn or €900 million) for the French entities."

Vaccine research hub

South Africa also has ambitions to become a pharmaceutical giant and a continental hub for vaccine research. Drugmakers say they are taking advantage of the conducive business environment to set up shop in the country.

Stavros Nicolaou, from pharmaceutical firm Aspen said: "Aspen was one of the first companies to commit, and it was an amount of R3.4 billion (€180 or around $200 million) at the inaugural South Africa Investment Conference in 2018. That Investment was to further strengthen and enhance our steriles capability and that has turned Aspen facility in Gqeberha in the Eastern Cape. It has turned that into a Pan-African sterile capacity that we make available to the whole world."

The South Africa Investment Conference is a bid to revitalise Africa's most advanced economy following repeated recessions and years of stagnant growth.