R69bn of the R364bn pledged at investment summit has ‘flowed into the economy’
The presidency says that R69 billion of the R364 billion committed by corporations at the 2019 South Africa Investment Conference has “flowed into the economy”.
The now annual conference is an instrument set up by the government and big business to drive investment in the country and ignite economic growth.
At the time of the 2019 summit, President Cyril Ramaphosa said the R363 billion pledged by business was “a sign of confidence in the future of our country and the belief that the South African economy is poised for growth going into the future”.
He added: “It has been estimated that these investments will conservatively lead to the creation of around 412 000 direct jobs over the next five years.”
These investments are something of a victory for Ramaphosa as just a few months after saying this, the Covid-19 crisis struck, putting the country’s economy which was already on the backfoot under further pressure.
Investment takes root
The presidency said R69 billion or 18.9% of the total value of the 2019 announcements have been implemented in a response to a parliamentary question from DA MP Manny de Freitas.
It said 60 of the 71 companies that made pledges are responsible for the flows of R69 billion and that the figure is based on quarterly updates received directly from the companies and reflect the status quo as at January 31, 2021.
The presidency gave no breakdown of which companies invested what amounts. At the time Toyota SA had committed to investing R2.85 billion and has since gone over this figure for the production of the new Corolla Cross sport utility vehicle (SUV) at its manufacturing plant in Prospecton near Durban.
Read: Toyota invests close to R3bn for production of new SUV at its Durban plant
For its part, Transnet had committed investment of R22 billion. In its 2020 annual report, it says for that financial period, capital investment was up 3.5% to R18.6 billion, and that R3.5 billion was invested in the “expansion of capacity, while R15.1 billion was invested to maintain capacity”.
The state-owned transportation group plans to spend R26 billion on capital investment in the 2021 financial year.
Though the presidency did not say which companies have made investments, it did release a list of the economic sectors involved, the number of investments made, and the nature of these investments.
Sector | Number of investments | Nature of investments |
Advanced manufacturing | 4 | New manufacturing facilities |
Factory upgrades and expansions | ||
Agro-processing
|
7 | Factory upgrades and expansions |
New manufacturing facilities | ||
Various new and expansion activities under poultry sector Master Plan | ||
Automotive
|
10 | Factory upgrades and expansions |
New manufacturing facilities | ||
Infrastructure | 6 | Investment in upgraded and new infrastructure |
Manufacturing
|
11 | Factory upgrades and expansions |
New manufacturing facilities | ||
Expansion of productive capacity across different operations | ||
Various new and expansion activities under the Retail, Clothing, Textile, Leather and Footwear Master Plan | ||
Mineral beneficiation
|
11 | Expansion and upgrading of existing mining operations |
New mines | ||
Investment in new and expansion of mineral processing capacity | ||
Services
|
6 | Investment in new datacentres |
Investment in new and upgrading of broadband infrastructure and services | ||
Investment in financial services | ||
Expansion and upgrading of existing facilities | ||
Oceans economy | 1 | New cruise terminal infrastructure |
Oil and gas | 2 | Investment in new and upgrading of oil & gas projects |
Renewable energy
|
2 | Investment in small scale renewable energy projects |
Tourism and hospitality | 8 | Property development |
New tourism and hospitality projects | ||
Funds | 2 | Investment in project financing |
Collective announcement | 1 | Investment in various types of activities |
It also noted that the 2019 investment announcements are “at different stages of progress and implementation and include site clearances, installation of bulk infrastructure, commissioning of plant equipment, and factory launches”.
“These activities are contributing to the creation of jobs and economic development across provinces.”
Source: moneyweb.co.za