CAPE TOWN – The R290 billion investment that was pledged at the Presidential Investment Summit, as stated by President Cyril Ramaphosa, will add about R338bn to South Africa’s gross domestic product (GDP) over the next five years.
This was revealed in a new analysis conducted by PwC’s Strategy& economists on the potential economic impact of investment pledges made at the SA Investment Conference in October 2018.
The R290bn goes towards Ramaphosa’s goal to raise R1.2 trillion in investments over the next five years.
Ramaphosa told about 1 300 delegates at the Investment Summit that these were real investments that are going to be made, not just pledges. "We are hugely overwhelmed by the interest that so many of you as business leaders … have demonstrated."
The PwC’s Strategy& economists said in addition to this about 825 000 direct and indirect jobs – on average per year – would be created or sustained, as well as generate an estimated R59bn in additional government revenue.
Government revenue
PwC found that the investment would enable about R468.8bn in potential production from 2025 to 2035. This production would, over the 10-year period, add an estimated R505bn to South Africa’s GDP and generate an estimated R133bn in government revenue.
Fedusa general secretary Dr Dennis George in an interview on Wednesday said the challenge of productive employment creation in South Africa is arguably more daunting than ever, with youth unemployment standing at more than 50 percent.
“Therefore, Fedusa (the Federation of Unions of South Africa) encouraged the Social Partners in Nedlac (National Economic Development and Labour Council) to work together and to engage in implementing solutions to increase the jobs content of investment and growth, in terms of both quantity and quality,” said Dr George.
He said the employment targeting methodologies were critical if the Social Partner could utilise an implementation framework to meet the immediate and long-term sustainable development challenges of support the Job Summit agreements.
- Improving the business climate and the regulatory framework for foreign and domestic investment.
- Assisting the nine provinces to attract the most value adding investment to their economies.
- Promoting responsible investment in value chains.
- Stimulating investment in local enterprise development.