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.”