Remarks by Deputy President Shipokosa Paulus Mashatile at the London Stock Exchange Investors’ Day, London, 1 October 2024
Programme Director,
The leadership of the London Stock Exchange, our host,
Ministers and Deputy Ministers from South Africa,
Ladies and gentlemen, distinguished members of the London Stock Exchange, it is an honour to address you today as we gather to discuss the immense opportunities for increased trade and investment between South Africa and the United Kingdom.
South Africa and the United Kingdom have a long history of trade and collaboration, forged by shared ideals and a desire for success. Today, as we approach a new era in global economies, it is critical that we grasp the opportunity to strengthen our bonds and explore fresh paths for cooperation.
The London Stock Exchange is at the heart of where ideas meet capital and become reality, with the flexibility to make connections and create real impact. It is a place where we want the South African companies to access London’s markets to connect with investors, raise capital, and drive growth. In other words, we would want to see more South African firms list their shares in London.
As a nation, we want to improve our partnership with LSE in order to attract more investment and create an environment in which companies may prosper and generate employment for our citizens. Working together, we can create new possibilities for trade and investment that will benefit both economies. We must also collaborate to overcome the difficulties that exist in our different nations. We face obstacles like climate change, stagnant economic growth, poverty, inequality, and unemployment in South Africa.
These challenges necessitate greater political cooperation, and the implementation of policies and measures aimed at improving our nations’ economic situation. We assure you that South Africa is committed to reviving its economy, achieving noteworthy advancements in economic growth and development.
Following the general election, we have established the Government of National Unity (GNU), which brings together ten political parties to promote national unity and political stability. The GNU has been working tirelessly in unity, as instructed by voters, to address South African concerns.
The GNU will continue to boost our economic and bilateral ties, as it has been done for decades. As the incoming administration, we will continue to hold the United Kingdom in high regard, not just for historical reasons but also for the enormous potential for partnership and progress between our nations.
Through initiatives such as the Economic Reconstruction and Recovery Plan (ERRP), we are prioritising spending across infrastructure, providing employment stimulus to sustain jobs, and implementing measures to deepen local industrialisation. The Recovery Plan is underpinned by a social compact between government, business and labour, and sector representatives.
Operation Vulindlela (OV), a task team under The Presidency, is addressing the ongoing implementation of the existing structural reform that are needed.
Its successes include boosting investment in electricity generation and drawing up plans that are now being implemented to allow more private sector participation in the country’s freight-rail network.
Operation Vulindlela has already unlocked R500 billion in investment. According to the Stellenbosch-based Bureau for Economic Research, if the program’s reforms take hold, economic growth may accelerate to 3.5 percent by 2029.
Ladies and gentlemen,
Today, I stand pleased because our nation has progressed in solving power challenges. Regular power outages are no longer an issue, and we have enjoyed continuous electricity supply since March of this year.
This demonstrates South Africa’s commitment to creating an enabling environment for investment. However, it was not achieved overnight.
In July 2022, President Cyril Ramaphosa announced the Energy Action Plan, whose key interventions include Fix Eskom and improve the availability of existing supply, Enable and accelerate private investment in generation capacity, Fast-track the procurement of new generation capacity from renewables, gas, and battery storage, unleash businesses and households to invest in rooftop solar and fundamentally transform the electricity sector to achieve long-term energy security.
Furthermore, Eskom announced the two-year Generation Operational Recovery Plan, the primary goal of which was to improve the quantity of electricity, known as the “Energy Availability Factor” (EAF), to 70% of the network’s capacity. At the same time, Eskom restructured its leadership, which many see as a critical element.
Eskom has also been progressively adding alternative energy sources, such as wind and solar, to help address the energy shortage. Our objective is to transition away from fossil fuels and towards sustainable energy sources in accordance with global trends. However, we are doing it at a speed and in a way that is consistent with our country’s growth path.
Additionally, South Africa is embarking on an ambitious Just Energy Transition (JET), which requires large-scale investment of approximately US$100 billion from a range of both public and private sector sources, using a range of financing instruments.
To meet its emissions reduction targets and safeguard vulnerable communities and workers from transition risk, South Africa has a clear plan for the JET investments required.
JET’s investment requirements and possibilities include renewable energy, electricity transmission and distribution infrastructure, green hydrogen, new energy vehicles, energy transition skills, and economic diversification. Private investment, public-private partnerships, and foreign partners are critical for South Africa to accomplish its JET goals.
Investors can be an important partner for South Africa as the energy sector undergoes a major transformation.
Ladies and gentlemen,
Let me take this opportunity to highlight that South Africa is among the top five African countries with the best infrastructure. Our objective is to be the leading nation with the greatest infrastructure to meet the demands of regular citizens and enterprises.
Infrastructure South Africa (ISA), the main force behind the National Infrastructure Plan (NIP) 2050, has done a tremendous deal of work, including resolving legislative and regulatory issues that obstruct investment and boosting investor confidence.
During March 2024, President Cyril Ramaphosa unveiled 12 major projects that the Department of Public Works and ISA are prioritising to attract investments. They include:
- The R2.1 billion liquid natural gas import terminal in KwaZulu-Natal
- The R38 billion Durban Container Terminal (DCT Pier 1) project in KwaZulu-Natal
- The R2.2 billion Berth A100 liquid bulk project here in the Eastern Cape
- The R7.5 billion Ukuvuselela Rail Project between Gauteng and the Eastern Cape aimed at assisting car and component manufacturers and exporters
- The R30 billion Eskom Mossel Bay gas project
- The R35.8 billion Eskom Tubatse pumped hydro storage project
- The R35.8 billion Rooiwal Phase 2 wastewater project in Tshwane.
Our fiscal policy will continue to focus on providing a clear and stable macroeconomic framework that supports growth, implementing reforms that increase our economy’s competitiveness, and prioritising investment in infrastructure through improvements in the infrastructure pipeline, its execution, and its financing.
The South African Government faces a significant financing gap for its infrastructure portfolio, which could potentially require additional funding. As reflected in the 2023/24 Budget Review, total infrastructure investment planned by the government over the next three years amounts to R943 billion.
The National Treasury is attempting to raise funding for public-sector infrastructure projects funded by the Budget Facility for Infrastructure (BFI) through the Budget Facility for Infrastructure Window, which includes concessional financing from the Multilateral Development Bank and development partner countries.
The National Treasury is currently screening potential funding projects. We urge financing institutions to participate in funding some of the projects once they receive BFI approval.
Ladies and gentlemen,
Let me conclude by highlighting that over the past years the countries have frequently collaborated politically in various multilateral organisations to advance shared ideals and objectives, including in the G20 and the United Nations Security Council (UNSC).
Most recently, during Prime Minister Starmer’s call to President Ramaphosa on July 7, 2024, the two leaders reaffirmed their commitment to strengthening ties. President Ramaphosa aspired for more alignment with the United Kingdom at both the national and global levels, with South Africa’s G20 presidency in 2025 being one such chance. The Prime Minister agreed that the G20 will serve as a venue for promoting common objectives in climate change, economic development, and inequality reduction.
We appreciate your support and would like to invite you to take advantage of the African Free Trade Agreement, of which South Africa is a member. The Free Trade Agreement is a high-level trade agreement that aims to gradually bring together all 55 African Union member states, covering a market of more than 1.3 billion people, with a comprehensive scope that includes critical areas of Africa’s economy, such as digital trade, investment, and trade in goods and services, among others.
The AfCFTA aims to significantly increase intra-African trade, particularly value-added products and trade across all sectors of Africa’s economy. Our unique position at Africa’s doorway makes us an ideal partner for firms looking to expand throughout the continent. We always say to ourselves, we are a gateway to Africa.
Ladies and gentlemen,
I extend an invitation to the companies and investors in attendance today to investigate the prospects that South Africa presents. South Africa is prepared to work with you every step of the way, whether your goals are developing renewable energy, extending your market reach, or developing infrastructure.
In other words, we are open for business.
I thank you.
Issued by: The Presidency
Pretoria