SA meets 5 year investment drive target

South African President Cyril Ramaphosa recently announced the commencement of a second phase of the investment drive after successfully meeting the 1.2 trillion rand target set during the first round. The President now aims to attract 2 trillion rand of investment by the year 2028, showcasing a strong commitment to bolstering the country's economy. To reflect on the five years that have passed, CNBC Africa's Zanele Morrison engaged in a conversation with TP Nchocho, the Chief Executive Officer at the Industrial Development Corporation, to delve into the intricacies of the investment drive and its implications. The primary focus of the investment drive is not just to secure pledges from companies but to ensure tangible outcomes that positively impact the economy. Nchocho emphasized the importance of creating employment opportunities and fostering stronger trade relations both locally and internationally. These outcomes are crucial as they lead to increased foreign exchange earnings, expansion of the tax base, and ultimately support the country's fiscal programs, enabling greater investments in crucial sectors like education. In essence, while investments serve as inputs, the true measure of success lies in the economic impacts such as job creation and financial inflows. When discussing the key sectors that hold the potential for significant investment, Nchocho highlighted agriculture as a promising industry due to its export opportunities and expertise within the country. Additionally, he underlined the importance of the manufacturing sector, despite its current challenges, as it has the highest employment multipliers. Sectors such as steel, chemicals, and textiles have substantial job creation potential and require support to thrive. Moreover, South Africa's status as a mining economy presents opportunities in minerals like platinum, manganese, and iron ore, especially in the context of the ongoing energy transition. However, Nchocho acknowledged that infrastructure deficiencies, particularly in energy and transportation, pose challenges to effective industrialization. To address this, significant investments are being made in renewable energy generation, with over 10,000 megawatts of projects in the pipeline. The focus is not only on increasing generation capacity but also on strengthening the grid infrastructure to facilitate the integration of new projects. Private sector involvement in energy production is on the rise, signaling a shift from the reliance on traditional utilities like ESCOM. Moreover, advancements in distributed energy systems, such as microgrids, offer innovative solutions to energy supply challenges, especially for communities and small businesses. In the logistics sector, partnerships between the government-owned Transnet and the private sector are being forged to enhance rail and port infrastructure. Private sector participation is seen as crucial in addressing logistical hurdles and improving overall transportation efficiency. As South Africa embarks on its second investment drive, the focus remains on driving economic growth, creating employment opportunities, and overcoming infrastructure challenges. With a concerted effort to attract investments in key sectors and address energy and logistics shortcomings, the country aims to foster sustainable development and bolster its position in the global economy.