During a Sanlam Investments Critical Conversations webinar, stakeholders said green, impactful and resilient investments can go a long way in addressing the country’s challengesBy lifting the level of investment in electricity, schooling, transport and other critical infrastructure, stakeholders have a chance of increasing the country’s economic capacity. Picture: SUPPLIED/GETTY IMAGES VIA SANLAM
The ensuing debate focused on how the government and the private sector should fund and manage the R6-trillion in infrastructure investments which need to take place in SA between now and 2030. According to Doyer, the government has capacity for two thirds of this sum, with the remainder likely to come from the private sector — including retirement fund assets.
Ndabe Mkhize, founding chair of the Asset Owners Forum SA, said local retirement funds invested less than 10% of their assets in infrastructure projects and private markets, compared to 26% in developed markets. The forum is working to improve this outcome. In so far as matching retirement fund liabilities, Mkhize observed that much of the private market infrastructure universe already offered lower risk than some investment grade corporate debt. As such, SA savers need to catch up with the rest of the world when it comes to putting a larger chunk of their money into such opportunities.
This narrow focus presents difficulties for a country where so much of the economic activity attaches to industries up and down the fossil fuel value chain. It is not just coal miners and power producers that will be affected by net-zero but the engineering, logistics and manufacturing firms that support them, not to mention that all businesses benefit from Eskom’s dirty power.