South Africans are a cynical lot. It's one of our better traits as a democracy to keep power on its toes. But it can mean that we don't smell the coffee or spot the green shoots.
Take this week's investment conference hosted by President Cyril Ramaphosa. It's an annual investment pledging event, and the second iteration at the Sandton Convention Centre saw businesses pledge a cool R363bn in investment commitments. That's up on last year's R290bn.
Put another way, the combined pledges over two years are more than Eskom's enormous R450bn debt burden, and indicate confidence as analysts suggest companies are sitting with cash of over R1trn on their balance sheets. It's certainly good to take a hard look at whether all the pledges are new or whether the CEO's who stood up to pledge and get a selfie with the president were reheating old investments.
There's some of that, but there's also this:
Meet the woman behind Ramaphosa's R363bn investment haul
But at this week's conference, more than one investor paid tribute to the Department of Trade & Industry for ironing out hitches. InvestSA is a one-stop-shop facility for investors run by the dti. Started in late 2017, it appears to be doing a good job of helping investors get through the red tape that South Africa can string out to ensnare the interested.
Who's who on this year's pledge list
Foreign pledges come from companies headquartered in Australia, Canada, China, France, Germany, India, Japan, Italy, France, Ireland, the Netherlands, Singapore, Switzerland, Turkey the UK and the US. It's a diverse and interesting spread, but most pledges came from domestic investors, which may signal that confidence is improving. October's business confidence index, announced this week, is still dismal but the investment conference may herald a mood shift.
The sectors into which investment has been attracted are advanced manufacturing, agro-processing, cars, infrastructure, manufacturing, mineral beneficiation and mining (largely coal mining), services, the oceans economy, oil and gas, renewable energy and tourism.
The big-ticket items are obvious: the mining and mineral beneficiation plants like Rio Tinto, Exarro and AMG-WEGO (a Chinese miner) are all in for a total of about R15bn. Makhaya says the Rio Tinto investment was "hard-won", and Ramaphosa had to put in personal calls to convince them that government would help to stabilise the community surrounding the Richards Bay Minerals operation, which has taken hit after hit.
The rapport and now nearly 30-year-old friendship between Ramaphosa and former NP minister Roelf Meyer, meanwhile, are paying dividends. Meyer has crafted a new career as a peacemaker and business consultant. A few years ago, he and Prof. Nick Binedell of the Gordon Institute of Business Science (GIBS) put their strategic heads together with government leaders like Trade and Industry Minister Ebrahim Patel to devise the sectoral jump-start plans for high-growth sectors. It's got a mouthful of a name - the Public Private Growth Initiative - but the most important trend to bear in mind is that it appears to be working.
At the recent investment summit Meyer announced a R12bn Agricultural Investment Fund, a partnership between big agriculture and government to train and support a new generation of farmers and land-owners. Similar collective plans were pledged in the poultry and clothing and textile sectors, all of which have been decimated by cheap imports. The three together account for R19.09bn - it's not clear how much is government support and how much is private sector investment.
A look at the full list of pledged investments reveal an interesting fact - a whopping R64.33bn comes from state agencies and state-owned companies. The IDC is putting in R18bn, airports company Acsa is good for R12.87bn and Telkom will invest R9bn into its network.
Two investments which should raise eyebrows because they would have to be supported either by government debt or by government guarantees are the roads agency Sanral at R2.3bn; Transnet at R22.16bn.
What's the cost of the investment spring?
The Industrial Development Corporation (IDC) supports investment in South Africa and it's clearly putting its money on the table to attract investors. Its officials were busy as bees at the investment conference this week. Mara, for example, is supported and subsidised by the IDC and also by the Dube Trade Port, the industrial incentive zone around the Ushaka Airport in Durban.
Incentives have been improved and renegotiated in the automotive sector to assist new investments by Ford, MBSA, and other big wheel multinationals. There's significant government money going into downstream black entrepreneurs in the automotive business to ensure there is the localisation of manufacturing skills - these include into companies like Gibson Njenje's VM Automotive, which made an investment pledge of R500m.
Would the investments be made without the sweeteners provided by the public purse?
"We are not very generous," says Makhaya. "It's a strategic thing - incentives are important but they are not the determining factor. (SA is making investments) into ports, roads, infrastructure - rather than into company-specific incentives," she says.