Malusi Gigaba
Photo by: Duane Daws
Africans must not expect others to invest in what the continent itself is not ready to invest in, Finance Minister Malusi Gigaba said on Wednesday, noting that there was a need for well-structured and bankable projects.
Addressing a Black Business Council breakfast roundtable, in Durban, Gigaba said that while capital resources may be limited, they was not insignificant. “We need to mobilise our domestic savings and capital markets to invest in deals on the continent.
“These include pension funds, sovereign wealth funds, especially from the proceeds of commodity exports. Resources can also be obtained by stemming the outflow of illicit financial flows, which rob our continent of resources,” he highlighted.
Gigaba further called for stronger policy and regulatory regimes which would attract investment. “Weak policy in sectors such as electricity and transport can hold back investment. These investments involve huge initial outlays and long repayment horizons and, therefore, investors require certainty and stability.
“We have to balance political pressure for low user charges, with the need to establish user-pays funding models which are needed to provide funding in a scarce resource context,” said Gigaba.
He also highlighted that State procurement needed to be used strategically, pointing out that State-owned companies needed to build relations on the continent, as there were many projects where companies could “co-deliver”.
“I encourage you to continue to play that role. You must be the patriotic bourgeoisie called for by African developmental economists throughout the post-colonial period. By patriotic bourgeoisie I mean that your business activity must not undermine national development but must enhance it,” he told delegates.