South African President Cyril Ramaphosa has increased a target to attract new investment into the country by two thirds over the next five years, saying the economy needs the capital to end a debilitating power shortage that has hobbled industry growth from manufacturing to mining.
The government now aims to attract R2 trillion rand by 2028, Ramaphosa told delegates at the fifth South African Investment Conference where said he hoped the R1.2 trillion rand target set five years ago would be achieved by the end of the gathering. Going into today’s final conference, Ramaphosa said the annual meetings had raised R1.14 trillion rand.
“We remain convinced that South Africa is an investment destination with significant untapped potential,’’ Ramaphosa said at the close of the fifth South Africa Investment Conference in Johannesburg. “We do believe that by leveraging our unique value proposition we have the ability to attract higher levels of investment.’’
South Africa will record little to no growth this year, according to the International Monetary Fund, the World Bank and the South African Reserve Bank, as industries remain without power for large parts of the day amid plant breakdowns that have forced power utility Eskom to ration supplies. The Bretton Woods institutions and the central bank all see the economy growing by 0.1 percent in 2023.
The country’s new electricity Minister Kgosientsho Ramokgopa says supplies may only stabilize from next year as industry investments kick in. He has suggested the country needs to spend more money on coal-fired power stations even as it invites private investment in renewable energy.
Ramaphosa said the focus on solar, wind, gas and battery storage was beginning to pay off with some 10,000 megawatts of new capacity committed so far. About 2,800 megawatts have already been sealed in signed agreements, he said. Incentives provided to private households to self-generate will also make a difference, he added.
South Africa had raised about R300 billion in the first conference, notwithstanding low business confidence and a sour investor sentiment. In addition, approximately R460 billion of capital had been invested in building new factories, purchasing equipment, constructing roads, sinking mine shafts and rolling out broadband infrastructure, the president said.
“The energy sector remains our foremost priority,” Ramaphosa said. “The lack of reliability in electricity supply weakens business and consumer confidence, taints international perceptions about our country and affects investment sentiment and decisions.”
He said though power rationing will remain a challenge in the immediate future, its severity will diminish over time.