Attracting Quality Investment
There is a clear need to coordinate both messaging and programming to actively attract high-growth sectors and enable the investment the private sector is willing to make on its own. This is directly linked to the socio-economic objectives of the Economic Reconstruction and Recovery Plan (ERRP), which creates an enabling environment for co-value creation through a government that creates the opportunity for developmental and catalytic conditions generated by quality investment. It is useful, in assessing the capacity of the state to execute this function to distinguish between various categories relevant to the coordination of the investment mandate:
- Investment mobilisation includes the scope of activities relating to the identification of specific investors or classes of investors relevant to a specific sectoral or strategic objective and the deployment of targeted engagement to convince these investors to engage with – and invest – in South Africa
- Investment promotion seeks to promote South Africa as an investible market, based on more transversal, systematic factors
- Investor intelligence refers to activities which gather crucial information on what is driving investor intent (or the lack thereof) and what informs the nature and scope of potential investment decisions, subjecting this information to trend analysis and overlaying analyses of different sectors and geographies to drive a coherent strategy to inform investment mobilisation and investment promotion activities
- Investment design references the process of financially and operationally structuring new investments, particularly relevant in a public policy context where co-investment or catalysation are required
- Investment implementation covers all the processes and actions required to realise an investment in a country on the part of active participants in said processes (public and private).
- Investment enabling entails the unblocking of intended investment through fast- tracking of existing processes and/or the creation of legislation.
Investment Promotion & Facilitation
South Africa has a myriad of Infrastructure Projects Authority (IPAs) with differing mandates. The success of the Corporate Investment Schemes (CIS) relies on a homogenous approach to investment promotion and facilitation through convening a working group comprising of the various IPAs leads. The IPA workstream will comprise of national IPAs, provincial IPA’s, petropolitan IPA’s and Special Economic Zones (SEZs) as well as ambassador and envoy representatives. This group will be responsible for investment mobilisation, investment promotion, investor intelligence, investment design and investment implementation. In terms of investment facilitation and aftercare, InvestSA will remain the custodian of this function, with the critical action of the dedicated development of an investment retention and aftercare strategy.
South Africa’s overarching Doing Business Reform Vision is “to improve government business regulatory processes by optimising processes and using technology and digitisation to drive business process efficiencies, complemented by associated legislative reform”. South Africa recognises infrastructure as a critical enabler for inclusive and sustainable economic growth as articulated in the NDP. The country’s ongoing investment in infrastructure will ensure both stability and consistency in the planning, investment, implementation and maintenance of infrastructure in the short-, medium- and long-term and will also restore the confidence of the private sector.
The provision of infrastructure as an enabler for investment is linked to the provision of physical and digital infrastructure including energy, water, commercial transport and telecommunications. Whilst the South African government has over the past decade invested in infrastructure, there is a need to significantly scale up the delivery of infrastructure to support the country’s ambitious growth targets. South Africa currently spends about 5.8 percent of its GDP on infrastructure, while the NDP targets a 10 percent GDP spend (National Treasury, 2020). Infrastructure investment is a priority in creating an enabling environment for investment. The South African government is further committed to implementing a long-term, government-led infrastructure investment programme and, in the process, leveraging the participation of the private sector, labour and civil society.
Creating a competitive business environment
SA's country Investment
Convene
the state can convene and cluster relevant players to ensure that investments support each other and further, that co-ordinated investor intelligence is enhanced
Co-invest
the state can build something that is a platform for or a significant component of a larger private sector investment (e.g., Special Economic Zones; industrial capability through the state’s Critical Infrastructure Fund)
Catalyse
the state can finance infrastructure that is a precondition for scaling investment (e.g., bulk infrastructure, rail and port infrastructure, road networks) and crowd-in private finance and funding through credit enhancement, tax increment financing and other mechanisms that liberate the state to build enabling infrastructure without compromising fiscal headroom
Enable
the state can unblock elements that are obstacles to investment or amend legislation to enable and drive investment. This includes streamlining and fast-tracking licensing regimes, operating permits of all kinds, spatial development frameworks and other compliance instruments, including, permission to build and visa rules for scarce skills that have been cites as bottlenecks in targeted sectors.
South Africa’s overarching Doing Business Reform Vision is “to improve government business regulatory processes by optimising processes and using technology and digitisation to drive business process efficiencies, complemented by associated legislative reform”. South Africa recognises infrastructure as a critical enabler for inclusive and sustainable economic growth as articulated in the NDP. The country’s ongoing investment in infrastructure will ensure both stability and consistency in the planning, investment, implementation and maintenance of infrastructure in the short-, medium- and long-term and will also restore the confidence of the private sector.
The provision of infrastructure as an enabler for investment is linked to the provision of physical and digital infrastructure including energy, water, commercial transport and telecommunications. Whilst the South African government has over the past decade invested in infrastructure, there is a need to significantly scale up the delivery of infrastructure to support the country’s ambitious growth targets. South Africa currently spends about 5.8 percent of its GDP on infrastructure, while the NDP targets a 10 percent GDP spend (National Treasury, 2020). Infrastructure investment is a priority in creating an enabling environment for investment. The South African government is further committed to implementing a long-term, government-led infrastructure investment programme and, in the process, leveraging the participation of the private sector, labour and civil society.
