Media And News
STATEMENT: SAVCA Responds to State of the Nation Address 2021
The Southern African Venture Capital and Private Equity Association (SAVCA) notes the concerns raised by President Cyril Ramaphosa and the challenges which face our country as we look to the year ahead.
Delivering a sobering speech about the challenges which lie ahead of us, the four priorities, as outlined by the president during his speech last night, seek to prioritise our immediate needs and we support the focus which government has taken and the emphasis towards economic reconstruction and the recovery plan.
We agree with the president that the year ahead must indeed be a time for change, for progress and for rebirth. We do, however, call for concrete and tangible initiatives to be enforced by government, in order to ensure that our economy can thrive.
The only way this can be achieved, however, is not solely through the reliance of government enforced programmes, but through the involvement of private sector which President Ramaphosa called a symbiotic relationship.
The private equity and venture capital industry stand ready to serve and assist government in job creation and rebuilding the economy and plays a significant role to investing directly in the real economy and supporting small and medium-sized enterprises (SMEs) in their growth and recovery post COVID-19. To effect real change, create jobs, alleviate poverty and grow the economy is to allow small business to prosper and to ensure the regulatory environment is supportive of business growth.
The focus on the investment of much needed infrastructure is also welcomed. The 2020 Private Equity Survey reported that R25.4 billion was invested by SAVCA members in 2019, with the top two sectors being infrastructure and energy. It is no surprise then, that the president spoke to restoring Eskom to operational and financial health and accelerating its restructuring process is central to rapidly expanding energy generation capacity.
We are particularly pleased that government has decided to extend the period for the Special COVID-19 Grant of R350 by a further three months. We hope that the extension of this grant will assist families to put food on their tables as we continue to battle the effects of the pandemic.
In addition to this, the fight against corruption is a welcome one, and we support the president in rooting out corruption in our SOEs as it negatively impacts investor sentiment and the ability to attract capital to South Africa.
According to The United Nations Conference on Trade and Development (UNCTAD), foreign direct investment flows into South Africa in 2020 almost halved to $2.5 billion from $4.6 billion in 2019, which was a 15% decline from around $5.4 billion in 2018.[i]
We urge government to assist in rooting out corruption, as this has a knock-on-effect far greater than is often seen.
Speaking to the vaccine rollout programme, the president spoke about a massive vaccination programme to save lives and dramatically reduce infections across the population.
We support this initiative and believe that a mass vaccine rollout will assist in not only saving lives, but saving the economy.
It is time for government to act decisively and strategically towards achieving its goals in enhancing South Africa’s economic positioning, and SAVCA continues to make itself available for any engagements with government in order to assist with helping to uplift the economy and help mitigate the negative long-terms effects of the global Covid-19 pandemic which our country is facing.
The Southern African Venture Capital and Private Equity Association (SAVCA) is the industry body and public policy advocate for private equity and venture capital in Southern Africa. SAVCA represents in excess of R185 billion in assets under management through 170 members that form part of the private equity and venture capital ecosystem. SAVCA promotes the Southern Africa venture capital and private equity asset classes on a range of matters affecting the industry, providing relevant and insightful research, offering training on private equity and creating meaningful networking opportunities for industry players.
For more, visit our website: http://www.savca.co.za/