Cape Town - A consortium of international business leaders is investing $1 billion in the South African and larger African economies, the lead investor ambassador Harold Doley jr announced on Thursday.
Doley made the unexpected announcement at the Business Report Ignite breakfast.
The event in Cape Town followed Finance Minister Malusi Gigaba’s Mid-Term Budget Policy Statement delivered in Parliament on Wednesday.
The $1bn (about R14bn) investment will primarily be in technology, as a platform for diverse development, and education and agri-business.
Africa has the most arable land in the world and has more people under 35 than any other continent.
Addressing Gigaba, Doley said: “I am going to tell you something you will seldom hear: We want to come here and pay taxes; we want to make money so we can help you with your deficit.”
The SA Revenue Service has previously said South Africa’s cumulative deficit for 2017 is R17.08bn compared to R83.28bn deficit in 2016.
The National Treasury has slashed the country’s growth outlook by nearly half to 0.7 percent from the 1.3 percent predicted in February.
Doley said young Africans could unlock the door to economic prosperity if they were given the keys - capital, education and expertise.
Speaking exclusively to Business Report after the breakfast, Doley Jnr, who is the only African-American individual to own a seat in the history of the New York Stock Exchange, said he knew the critical role capital played in transforming developing economies.
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“I am a firm believer that Africa can, and will, fulfil its potential for growth and create opportunities, especially for young people.
"It is with this in mind, and after many decades of involvement with Africa, that I am leading a group of notable international investors, who are all committed to African growth and prosperity,” he said.
Doley jr founded investment bank Doley Securities
in 1975.
The company services banks, insurance companies, corporate and public entities, and university portfolios totalling tens of billions of US dollars.
He was a founding member of the US-Africa Chamber of Commerce, and also the chairperson of the investment committee of the private equity Southern Africa Enterprise Development Fund.
Business Report/Independent Newspapers hosted Finance Minister Malusi Gigaba at a breakfast at the Mount Nelson Hotel on Thursday. Picture: David Ritchie/ANA
He has advised African stock exchanges and the bodies that regulate them.
Doley was accorded ambassadorial rank by the US president when he served as his country’s representative
to the African Development Bank and Fund (AfDB) between 1983 (when the US became a stockholder in the bank) and 1985.
Responding to the announcement, Black Business Council president Dr Danisa Baloyi lauded the investment, saying transformation was important for economic growth.
“We welcome the initiative by global investors to invest in South Africa at a time when there are significant growth constraints in the economy.”
Baloyi said Doley was an outstanding supporter of Africa, having contributed to development of black enterprises with Andrew Young, former Atlanta mayor and US ambassador to the UN.
The ambassador said the consortium would make a detailed, formal announcement within the next week.
Market speculation is that Doley has teamed up with global US dollar billionaires to invest in technology entities in South Africa.
Recently, Japanese conglomerate SoftBank raised $100bn into its Vision Fund.
Founder and chief executive Masayoshi Son has stated that SoftBank is about to acquire 20 percent of the Uber taxi business and has indicated it wants to invest more in emerging markets.
Africa is poised to benefit from global technology funds looking for the next positive growth story.
This leads to further speculation that the initial investment by the consortium, led by ambassador Doley, could be the first stage of a multiple investment approach in South Africa, reaching throughout the continent.