President Cyril Ramaphosa on Monday emphasised that transforming investment pledges into large-scale growth and job creation takes time, noting that achieving the National Development Plan's target to raise gross fixed capital formation (GFCF) to 30% of GDP by 2030 will require “sustained, collective effort and productive” domestic investment.

In his weekly letter to the nation, Ramaphosa highlighted that while recent infrastructure summits and the South Africa Investment Conference (SAIC) have yielded massive pledges, a significant gap remains between these promises and implementation.

He said GFCF currently sits at around 14% of GDP, well short of the 30% target.

“Our GFCF reached around 21% in 2008, driven by a sustained commodity boom, the start of Eskom’s build programme and infrastructure expansion ahead of the 2010 FIFA World Cup. There has been a steady decline since then, as the global financial crisis and the period of state capture progressively undermined private investment and business confidence,” he stated.

Ramaphosa pointed out that since 2018, government has moved to arrest this decline by stabilising public finances, resolving the energy crisis, and advancing structural reforms.

However, he said there remains a disconnect between improved investor sentiment and actual investment on the ground.

Ramaphosa said government and the private sector must bridge the gap to encourage the substantial private capital currently sitting in reserve, such as the R1.8-trillion held by non-financial companies, to be utilised productively.

DOMESTIC INVESTORS LEADING THE CHARGE

The task of building an inclusive society relies on productive investment at scale, and Ramaphosa pointed out that domestic investors led the charge at the sixth SAIC, contributing roughly three-quarters of the record R890-billion in pledges.

These commitments, he said, are actively translating into new factories, mines, and expanded operations, reinforcing the foundation for sustained job creation and growth across the country.

In forging ahead with efforts to attract new investment, government wants the local private sector to be at the forefront of rebuilding investment momentum in the economy.

“Their confidence will encourage more international capital to follow. It is now abundantly clear that the engagements and commitments made in conference halls are steadily and increasingly translating into the economic activity that creates jobs and opportunities for South Africans,” Ramaphosa said.

Meanwhile, since the launch of the first national investment drive in 2018, South Africa has attracted investments across energy, telecommunications, infrastructure, automotive, mining, and advanced manufacturing, he pointed out.

Of the R1.5-trillion in pledges secured across 317 projects, a cumulative R634-billion has successfully flowed into the productive economy, translating directly into job creation, he said.

He referenced the R4.2-billion investment by BMW to electrify its Rosslyn plant in Gauteng and to support new energy vehicle production; the R500-million investment by Tetra Pak to upgrade its plant in KwaZulu-Natal; Corobrik’s R500-million investment to build its Kwastina plant in Gauteng; and the Newlyn PX terminal in the Port of Durban that began operating in 2024.

He explained that beyond construction and production, these projects are equipping young South Africans for the evolving world of work through critical skills development.

“… for instance, Microsoft has committed more than R5.4-billion to expand its hyperscale cloud and AI infrastructure in South Africa. As part of this initiative, the company partnered with the Youth Employment Service to fund globally recognised certifications in high-demand AI skills,” he said.