The South African Investment Conference (SAIC), held yesterday at the Sandton Convention Centre, aimed to achieve its five-year goal of raising R1.2 trillion, and it is likely that this target will be reached.
However, South Africans are sceptical about the conference’s ability to serve as a platform where South Africa and its representatives can attract investment to improve the state of the country.
The SAIC’s stated aims are to:
- Position South Africa as a globally relevant player and partner in trade and investment that can compete with the best in the world.
- Showcase South Africa’s capabilities and strategic importance in the region.
- Profile the country’s economic recovery strategy and implementation.
- Reinforce South Africa’s position as an attractive business, investment, and tourism destination.
- Showcase investment opportunities that will transform the economy and create employment opportunities.
- Emphasise South Africa’s continued commitment towards zero tolerance for corruption and the fight against it in all sectors of society.
To many these goals come across as unrealistic and even insincere, considering the current state of the country, its economy, the management of its resources, and the struggles all South Africans are facing as a result. An article by the Daily Maverick calls it “a theatre of absurd”.
“Of the 152 investment announcements made previously, 45 projects have already been completed, while a further 57 projects are currently under construction. These investments have resulted in new factories, call centres, solar power plants, undersea fibre optic cables, expansion of production lines, and the adoption of new technologies,” Ramaphosa said in his keynote address at the conference.
Furthermore, about R460 billion has already been spent on building new factories, constructing roads, purchasing equipment, sinking mine shafts and distributing broadband infrastructure. Many have argued these completed projects have made no difference, and due to the state of the country and economy, new investments will be scarce.
People are questioning whether investors will be interested in a country with minimal economic growth, an energy crisis, water shortages, poor transportation infrastructure, high unemployment rates, inconsistent healthcare and educational systems, and endemic crime and corruption.
While some of these issues are prioritised in these investments, people remain sceptical about what the SAIC claims to accomplish.
This is further corroborated by the World Bank’s most recent prediction that there will be 0.5% growth during 2023, while the SA Central Bank and the International Monetary Fund’s predictions speculate even lower.
According to another reporter at the Daily Maverick, in conversation with a confidential UK-based investor, foreign investors are still interested in providing the country with big investment funds. Ironically, he accredits this interest to just how bad South Africa is doing right now.
“The reason they are interested is not necessarily because they think South Africa is on its way to emerging market brilliance and outperformance, but because serious fund managers are all about value. Sometimes that means looking for undervalued areas of the world that might turn around.
“Hence, SA is not interesting because it’s succeeding, but because it’s failing, which means there is a chance of a turnaround,” he explains.
While the SAIC has good intentions, many believe these investments will not address the larger problems in our country, particularly the imbalances in our macroeconomy and state industries which, if fixed, could potentially translate solutions down to micro economies in the country.
“The message should be this: fix the macro, and the micro will look after itself, even, as it happens, when the “micro” is denominated in trillions,” said the Daily Maverick reporter.
