South Africa's $75 Billion Investment Gap, according to ex-Standard Bank chief

Big gap between targets and investment

In a hallway interview during a conference in Johannesburg on Thursday, Jacko Maree, who led Standard Bank Group Ltd. between 1999 and 2013, stated that South Africa requires about $75 billion more per year to meet its growth goals. He pressed for a focus on long life capital spending, adding "There really is only one real long-term solution and that is fixed investment" and "Growth above all is what's required."

He noted that fixed investment is currently under 15% of GDP, well short of the 30% share the government set in 2012 for 2030 under the National Development Plan.

Why the shortfall exists

The economy is still dealing with the legacy of a power crisis running for more than a decade and a period of government corruption that pushed up business costs, weakening investor sentiment and growth. Since 2018, when Cyril Ramaphosa became president and began reforms, output has grown at an average pace of 0.4% a year.

Maree also completed a five-year stint starting in 2018 as one of Ramaphosa's investment envoys, giving him a close look at where capital is and is not being deployed.

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How to free up capital

Maree pointed to the country's renewable energy program as a template, saying South Africa should replicate it with financeable projects that have clear rulebooks in ports, rail, tourism and other sectors. He said such pipelines could mobilize savings sitting with pension funds, large companies and other investors.

Nhlanhla Nene, who previously served as South Africa's finance minister, said stronger coordination between business and the state is vital to lift activity. Nene, who chairs the Africa arm of European House-Ambrosetti, an Italian research firm, said he is working with senior executives to back growth and infrastructure in the region. "Our focus is on investment more than anything and we're actually trying to build economic community and we're in economic communities," he said.

The numbers and why they matter

The National Treasury estimated in October that the economy could expand by 2% by the end of the decade, while Nene said output needs to be at least 3% to generate meaningful employment and raise living standards. The Global Attractiveness Index from the think tank ranks South Africa first among 54 African countries, citing strong logistics and trade as well as institutions.

In plain English: if fixed investment moves toward the 30% target, new project pipelines could redirect large pools of capital. For your portfolio, the pivot point is whether projects come with bankable structures that draw in pension savings and corporate cash.

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