‘No one is out to get SA' — Calls for ruthless approach to courting investment

TimesLIVE

26-05-2025

Deputy minister of finance Ashor Sarupen said with global investment flows tightening, South Africa would have to become more uncompromising in its efforts to draw investment for infrastructure development in the coming years.
He was addressing a panel at the Sustainable Infrastructure Development Symposium South Africa (Sidssa 2025) in Cape Town on Monday afternoon.
He said South Africa was competing with other emerging economies for capital and needed to be 'ruthless' about courting investment.
'What we have got to figure out is does our regulatory environment, our systems and so on allow us to maximise inward investments when we are competing globally and against other emerging markets for the kind of investment that would pull most people out of poverty and into employment.
'And so, when you write regulations and policies, that has got to be the overarching objective ... when we look out there at global systems and global governance and so on, a couple of things we are going to have to accept is that people aren't out to get us and South Africa needs to come to terms with that. Global best practice exists for a reason.'
The deputy minister's remarks come after finance minister Enoch Godongwana tabled a budget for the third time in the space of three months. While the National Treasury had to scale back additions to spending areas in this year's budget, it managed to keep economic development spending at R289.8bn and R1-trillion for infrastructure in the medium term.
Over the medium term, R1.03-trillion will be allocated to public infrastructure, with major allocations to roads at R402bn, energy at R219.2bn, and water and sanitation at R156.3bn. The main budget adds R33.7bn for infrastructure projects over the medium term.
Sarupen said South Africa remained open for business and was working 'very much down the path of reform and with a determination to unlock, in that pipeline, tremendous amounts of growth'.
'I think it's an interesting journey that we're going to be on as a country. We know that the state balance sheet cannot provide what we've got to turn to the private sector. The other problem with the scale of debt ... is because we borrow so much, we are also kind of crowding out private capital for the kind of infrastructure investment we need as well.'
He said South Africa had to do all it could on a policy and efficiency level to draw investment that would bring much-needed growth to the economy.
UK trade commissioner for Africa John Humphrey said the estimated $100bn a year gap faced in infrastructure funding on the African continent had a real impact on African economies and African lives and no government alone can close the gap.
'All governments now, I don't just mean South Africa, I think all governments are feeling the pinch, particularly since Covid-19 and there are huge increases in levels debt, particularly in countries like the UK where there is a smaller tax base than we might have had previously against an ageing population. Here, in Africa, the problem is sort of the other way about where you've got a large demographic but to be able to expand the economy ... a lot of people are in the informal economy.'
He said the government would have to create a 'fiscal line' that makes it approachable by the private sector. This would require African economies to have 'well-run economies where people have confidence that they will not have to worry about interest rates and inflation'.
Gauteng Government Development Agency CEO Saki Zimxaka said South Africa needed levels of investment as a percentage of GDP to consistently stay above 25%, though they were now at about 15%.
'There is a biochemical factory that is going to be put up in Heidelberg, but for that to happen, they needed R70m invested in bulk infrastructure. Now, if you don't put bulk infrastructure in place because the public sector does not have money, it means that project is not going to happen.'
He said the sequencing of budgets will be critical going forward as investments tend to get delayed in instances where the government does not deliver on the infrastructure needed to facility a smooth investment.