Government will remove stumbling blocks for private investors: Cyril Ramaphosa
President Cyril Ramaphosa says the government will work to address investment policy uncertainties and expedite state-owned enterprise (SOE) reforms which are a stumbling block for private investors.
Delivering the keynote address at the Sustainable Infrastructure Development Symposium of SA on Tuesday, he said the bankable projects government would be working on alongside private investors would also be used to pursue “ambitious transformation targets” in the sector.
The symposium is an attempt by the government to put on offer “bankable” infrastructure projects which can be jointly funded with the private sector to grow economic activity and much-needed jobs.
The event is being attended physically and virtually by ministers, investors, representatives of multilateral agencies and big business. It will include a series of round table discussions on funding models and government programmes in the key sectors of transport, energy, water and human settlements, agriculture, public works and digital infrastructure.
“Our task is to blend the skills and experience of seasoned and even retired professionals with a new generation who have the qualifications but would benefit greatly from mentoring and support. We are also determined to root out the corruption and collusion that has plagued this sector over many years. This must be seen as an opportunity to build and maintain infrastructure in a different way, transparently, efficiently and with effective accountability,” the president said.
“Clear policies and institutional frameworks and bankable investment opportunities are critical to incentivise private investors. Domestic business investor sentiment is a key first mover that will help crowd in foreign investors and portfolio investors. Therefore, we are listening to our domestic private sector needs and requests to deal with blockages to greater investment.”
Ramaphosa said the government would work to implement the necessary reforms needed to boost investor confidence.
“As we work at strengthening this newfound relationship with the private sector, government will work towards addressing investment policy uncertainties, accelerating SOE reforms and formulating necessary infrastructure policy reforms.”
Noting the decline in investment in infrastructure projects even before the Covid-19 economic crisis, the president said the unprecedented impact of the coronavirus has only served to worsen the problem.
“Buyers of infrastructure services have delayed procurement of new projects or cancelled projects. Lenders and investors, in turn, are revisiting their decisions to invest in infrastructure projects that were deemed bankable prior to the pandemic,” Ramaphosa said.
He emphasised the long-term benefits of infrastructure services, particularly in critical areas of transport, energy and municipal services.
“Government is looking at policies that facilitate economic recovery, such as introducing stimulus packages that boost government’s infrastructure spending, creating financing instruments that provide liquidity, bridge financing or debt restructuring instruments as well as guarantee products and funds. Development finance institutions are expected to support the creation of these instruments.
“In the course of implementing the projects, we will pursue ambitious transformation targets that will help to remake ownership and production patterns by allowing for meaningful participation of designated groups in the entire value chain of the project life cycle. We will use this programme to support black infrastructure service providers in much the same way as we have supported the emergence of black industrialists. This is an industry which needs to be transformed in terms of ownership, participation, capabilities and skills.”
Ramaphosa said the public sector infrastructure ecosystem was being reconfigured to allow for a “seamless consideration and packaging of projects.”
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