3 minute read
Addressing The Nation
ADDRESSING THE NATION
BY FIONA WAKELIN
President Ramaphosa opened his letter to the nation on 8 November by referring to the first Investment Conference held in 2018 as part of the drive to raise R1.2-trillion in investment over five years. Subsequent conferences were held in 2019 and 2020 and together, all 3 raised just over R770-billion in investment commitments across a wide range of economic sectors.
While the fourth conference was due to be held again this month, with everything going on – like local government elections, COP26 and the Intra-African Trade Fair – it has been decided to move it to March next year. This, however has not halted the investment drive and companies continue to make good on their commitments and to look for other investment opportunities in South Africa.
His Excellency notes that In 2021 nearly R120-billion of investment commitments flowed into project construction or expansion – which means that around 38% of the total investment commitments (R290-billion) have to date flowed into the economy. Unfortunately, some investments into some sectors such as tourism and property development have been delayed due to COVID-19.
At the end of October, President Ramaphosa attended the launch of Toyota’s expanded production line in eThekwini, which will produce South Africa’s first locallymade hybrid car. This investment was the result of a R2.4-billion commitment the company made at the 2019 South Africa Investment Conference. Also in KwaZulu-Natal, Tetra Pak is expanding its operations with an investment of R500-million. In this newsletter, His Excellency also referred to an exciting new area of growth – Pharmaceuticals. Aspen Pharmacare recently launched its R3.4-billion expansion (which it had announced at the 2018 Investment Conference).
This investment has turned Aspen’s Gqeberha manufacturing facility into one of the largest global manufacturing hubs for general anaesthetics and has produced over 100 million doses of the Johnson & Johnson COVID vaccine.
The World Health Organisation has chosen South Africa to host an mRNA vaccine manufacturing hub with the Biovac Institute, which is a public-private partnership with government. South African-born Dr Patrick Soon-Shiong and his company NantWorks recently announced an ambitious initiative to build capacity for advanced health care in Africa.
In addition to the investments they will bring, these developments will also contribute to the collective ambition for the continent to manufacture 60% of its vaccine needs by 2040.
His Excellency then refers to another area of growth – Energy , with the 25 preferred bidders in the fifth round of our Renewable Energy Independent Power Producer Procurement Programme being expected to invest around R50-billion into the economy. The increase of the licensing threshold for embedded generation to 100 megawatts is likely to result in substantial private investment in electricity generation projects. At COP26 South Africa secured an initial commitment by the United States, United Kingdom, France, Germany and the European Union (in line with the Paris Agreement) of around R131-billion to fund a just transition to a low carbon economy by investing in renewable energy, green hydrogen and electric vehicles.
This is good news and these energy investments will help overcome the load shedding issues that the country is currently experiencing.
“We now have 13 special economic zones across the country, providing investors with targeted investment incentives, preferential tax rates and export support. These provide an attractive manufacturing base for companies seeking to supply both local and international markets. Their value has increased further with the establishment of the African Continental Free Trade Area, which officially commenced trading at the beginning of the year. “While the rate of investment has slowed due to the effects of the pandemic, and several projects have been delayed, the investment drive is beginning to gather pace once again.
“As we make progress with the implementation of the Economic Reconstruction and Recovery Plan – with its focus on infrastructure, industrial development, employment and structural reform – the environment for investment will improve further.
“Through the investments that are now underway, through the work that social partners are doing to expand local production and through the progress we are making on key reforms, we are building a firm foundation for the success of the fourth South Africa Investment Conference next year.
“Most importantly, we are building a firm foundation for a sustained economic recovery that encourages further investment, creating more jobs and providing new opportunities for emerging businesses, ” – President Ramaphosa. n
