South Africa will target 2 trillion rand ($109 billion) of new investment over the next five years, President Cyril Ramaphosa said, as he sought to address investor concerns about the nation’s energy and logistics crises, and rampant crime.
(Bloomberg) — South Africa will target 2 trillion rand ($109 billion) of new investment over the next five years, President Cyril Ramaphosa said, as he sought to address investor concerns about the nation’s energy and logistics crises, and rampant crime.
The government is implementing its Energy Action Plan to help reduce daily electricity outages of as long as 12 hours a day, and is planning new bid windows for wind, solar and other renewable energy projects, Ramaphosa said at an investment conference in Johannesburg on Thursday. The state has also agreed to establish a National Logistics Crisis Committee to drive the enactment of a plan to repair the nation’s railways, ports and other transport infrastructure, he said.
Specialized multidisciplinary task teams have been set up by the police to tackle crimes of economic sabotage such as violence and extortion at construction sites, illegal mining, infrastructure vandalism and cable theft, Ramaphosa said.
Government Weighing Measures to Lure Investment (April 13, 10:45 a.m.)
South Africa’s government is struggling to compete with tax incentives offered by other countries and is looking at alternatives to lure back investors, Human Settlements Minister Mmamoloko Kubayi said.
“Other countries are offering better conditions in terms of tax, either a six-month tax holiday or something like that, which sometimes makes it difficult for South Africa to do, but we are paying attention to it and looking at alternatives,” Kubayi, who is also the chairwoman of the cabinet’s economic cluster, said at the conference.
The minister was responding to concerns raised by Rand Merchant Bank CEO Emrie Brown, who said that South Africa must find a way to stem capital outflows.
Nedbank Has 10 Billion Rand of Energy Projects (April 13, 7:59 a.m.)
Nedbank Ltd., South Africa’s fourth-biggest lender, has a 10 billion-rand pipeline of projects in renewable energy — an industry that offers a long-term growth opportunity for investors, Chief Executive Officer Mike Brown said.
The bank is “lending to private companies that are in some stage of their own generation process, and I would imagine you could multiply that by five or six across the entire economy,” Brown said. While the country is facing “material challenges,” especially on energy, logistics and crime, it’s making progress on dealing with them, he said.
“While we certainly do have short term challenges, I’m extremely bullish about the long term potential of our country,” Brown said.
Ramaphosa Meets Business Leaders on Growth (April 13, 7:25 a.m.)
Ramaphosa met business leaders on Wednesday to discuss measures to boost economic growth and job creation, ahead of an annual conference to woo investment to the country.
Thursday’s conference starts as data this week showed that the economy has probably entered a technical recession. The BankservAfrica Economic Transactions Index, a measure that tracks interbank payments and an early indicator of economic activity, dropped 1.7% in the three months through March, after shrinking 1.3% in the prior quarter.
“The president has agreed with business that there is a need for acceleration towards the resolution of challenges impacting key economic enablers, namely energy, transport and logistics, and crime and corruption,” his spokesman, Vincent Magwenya, told reporters in the capital, Pretoria.
Investec Sees Uncertainty at Worst Since Apartheid (April 12, 2:59 p.m.)
South Africa’s political climate is the most uncertain since the end of the apartheid era, with investors acutely concerned about a potential coalition between the governing party and a leftist group after next year’s elections, Investec Bank Ltd.’s chief executive officer said.
Anxiety is intensifying over the implications of the African National Congress falling short of the 50% it needs to retain control of the continent’s most industrialized economy, Richard Wainwright said in an interview with Bloomberg TV on Wednesday. That may push the party to tie up with the Economic Freedom Fighters, which advocates for the nationalization of banks, mines and land.
“There’s probably the highest level of uncertainty politically that we’ve had since 1994,” he said. “It does appear that they are siding in certain instances with the EFF. That will be very negative for international investors and domestic investors.”
Naspers Unit Says Power Outages Require Businesses to Be More Agile (April 12, 2 p.m.)
South African businesses need to become more agile to cope with erratic power supplies, the head of online retailer Takealot said.
The Naspers unit has installed generators and is investing in solar power to cope with state power utility Eskom Holdings SOC Ltd.’s inability to supply regular electricity, Mamongae Mahlare said in an interview with Bloomberg TV on Wednesday. The company is “cautiously optimistic” that eventually the government will develop a plan to address the national energy crisis, she said.
“South Africans always make a plan,” Mahlare said. “There is always something that is not necessarily going according to plan – and you have to be agile and responsive in dealing with any of these challenges.”
–With assistance from Adelaide Changole, S’thembile Cele, Tom Mackenzie and Jennifer Zabasajja.
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.