The South African government is implementing “far-ranging changes” to support improved economic performance through implementing reforms in key sectors, including electricity, the visa regime, water and at Transnet.
This was the assertion made by President Cyril Ramaphosa as he opened the sixth annual South Africa Investment Conference (SAIC) currently underway in Sandton, Johannesburg.
Some 1 000 delegates are in attendance from at least 50 different countries.
“A key priority for Operation Vulindlela from the outset was the crucial building block of visa reform to attract skills and grow the tourism sector. We know that investors aren’t just deploying capital, you need to establish a physical presence without undue bureaucratic delays. This is particularly critical for multinational firms that require seamless movement across borders.
“We have [also] restructured the national power utility Eskom; established a National Transmission Company as an independent grid operator, and created the transparent, rules–based framework for grid access that private investors require.
“Through the Energy Action Plan…we have brought an end to load shedding and ensured a reliable supply of electricity. This is essential to allow businesses to operate and make decisions to invest,” he said.
Reforms in the electricity sector have also unlocked a growing pipeline of projects with some 220 GW of renewable energy projects in “development and 36 GW already in the grid connection process”.
Further investments are expected in solar, wind and battery storage capacity over the next five years.
“At the same time, we are moving to enable private investment in expanding our transmission network through Independent Transmission Projects for the first time.
“Decarbonisation will create new industries, new jobs, and new opportunities in green hydrogen, battery storage, electric vehicle manufacturing and in the manufacture of components and infrastructure that a decarbonising world urgently needs.
“The R29 billion in confirmed renewable energy investment today is a vote of confidence in our rapidly transforming energy sector,” the President stated.
Rail and water
Key to South Africa’s reform programme is the National Rail Policy of 2022, together with the National Freight Logistics Roadmap of 2023.
These policies are aimed at paving the way for private investment in the port and rail operations.
“Last year we…signed a 25-year concession for the Durban Container Terminal Pier 2, representing R11 billion in private investment in one of South Africa’s most critical logistics nodes.
“A transparent and effective regime for third-party access to the freight rail network is now in place. Forty-one freight rail slots have been allocated to private train operating companies, and we expect the first private operator to commence operations in April 2027.
“By ending inefficient monopolies and introducing competition, we will reduce the cost of electricity and transport over time, enabling our manufacturing, mining, agriculture and other industries to thrive and compete,” the President said.
The water sector continues to receive “strategic focus under the structural reform agenda”.
“First, we are establishing professionally run water utilities in all eight metros, with water revenues ring-fenced and invested back into maintaining and expanding water infrastructure.
“Second, we are establishing a robust regulatory framework to ensure that water service providers perform their functions effectively, and face consequences where they do not.
“We have embarked on a massive water infrastructure build programme including dam construction, distribution infrastructure upgrades, bulk water expansion and desalination. One such project is Phase 2 of Lesotho Highlands Water Project that is targeted for completion between 2028 and 2030,” President Ramaphosa explained.
Those projects will be overseen by the newly formed National Water Resources Infrastructure Agency.
“The water sector is ripe for investment, and we have set up a dedicated Water Partnerships Office to facilitate private sector participation in areas such as reducing non-revenue water, investing in wastewater treatment, water desalination and reuse, with more than R50 billion in projects already in development.
“Our structural reform agenda has laid the foundations – now we are harnessing its momentum,” the President said.
Infrastructure investment
Although government has called for private sector investment in infrastructure, the state has committed to investing some R1 trillion over the medium term for public infrastructure.
Of this allocation:
- R577.4 billion will be spent by state-owned companies and other public entities;
- R217.8 billion by provinces; and
- R205.7 billion by municipalities.
Transport and logistics will make up the lion’s share of expenditure.
“We are embarking on the largest and most ambitious cycle of infrastructure investment in our country’s history.
“Infrastructure is the flywheel that propels growth. It boosts productivity and trade and reduces the cost of doing business. It creates immediate and meaningful employment - at scale. With this unprecedented investment, we are kickstarting the cycle,” the President added.
Furthermore, the state will be using “innovative funding models” such as the Infrastructure Fund aimed at reducing risk and to “attract investors to fast-track infrastructure projects”.
“Last year, the Fund approved blended finance projects with a combined value of approximately R38 billion in water and sanitation, student accommodation, health, energy and transport.
“Last year, we also issued regulations for public private partnerships [PPP’s] in support of attracting more private sector participation and investment in the national infrastructure build.
“Lastly, we are also deploying innovative instruments such as the Credit Guarantee Vehicle to de-risk private investment in infrastructure,” he said.
No one left behind
The President assured that as the country’s economy begins to grow, no one will be left behind.
“As South Africa, we remain committed to staying the course on fiscal discipline and to accelerating the momentum of the reform agenda – but also to leveraging investment to build an economy that is inclusive, transformed and that benefits all.
“The transformation of our economy is necessary to drive sustained growth, reduce inequality and correct the injustices of the past. We are undertaking a review to refine, realign and strengthen our B-BBEE framework to ensure that it supports transformation while at the same time enabling investment and growth,” he said.
This framework, he explained, provides a “foundation for inclusive growth by expanding participation in the economy and enabling us to harness the skills and contribution of all South Africans”.
“What makes South Africa’s empowerment laws distinct is that they are practical and innovative. In addition to pure equity participation measure we also have an Equity Equivalent Investment Programme [EEIP].
“It was created to accommodate multinationals whose global practices or policies prevent them from complying with the B-BBEE ownership element to invest in socio-economic, skills and enterprise development in South Africa without selling equity in their local subsidiaries.
“Since its inception, the EEIP has onboarded some of the world’s leading multinational firms who have leveraged the programme to direct investment into local development, to incubate black, youth and women-owned businesses, and to fund skills development. Our overriding objective is to support firms with compliance, and to embrace empowerment as a meaningful investment in South African’s long-term economic stability,” President Ramaphosa assured. – SAnews.gov.za
