Former President Kgalema Motlanthe has called for South Africa to establish a sovereign wealth fund to turn its mineral wealth into long-term investment and drive economic growth. Speaking at the Kgalema Motlanthe Foundation's Drakensberg Inclusive Growth Forum, Motlanthe emphasized the need for South Africa to mobilize more capital for productive investment in infrastructure, industry, agriculture, and skills development. This, he argued, would help to create jobs and stimulate economic growth.
Motlanthe proposed that the sovereign wealth fund could be financed through a defined share of future mineral and resource revenues, proceeds from state assets, and other fiscally sustainable contributions. The aim, he said, would be to convert finite natural resources into lasting economic assets, including infrastructure, domestic supply chains, and skills. Additionally, Motlanthe called for the greater use of retirement-fund capital to support domestic infrastructure and long-term productive investment, provided that safeguards protected fund members.
Motlanthe also highlighted the need for industrialists, manufacturers, agricultural producers, and innovators who could establish enterprises, deepen domestic production, and create jobs. He pointed out that many South Africans face barriers to accessing finance, particularly in townships, informal settlements, and areas under communal tenure, where people often lack secure property rights or title deeds. This, he argued, limits their ability to use their assets as collateral.
To address this issue, Motlanthe suggested that reforms should recognize family and communal ownership, rather than assuming individual title deeds are appropriate in every case. He also cautioned that the costs and administrative requirements associated with property registration could prevent people from formalizing ownership. Finance Minister Enoch Godongwana, who also spoke at the forum, identified economic growth as South Africa's main challenge after years of fiscal consolidation.
Godongwana referred to the cumulative effects of the 2008 global financial crisis, state capture, the COVID-19 pandemic, and the July 2021 unrest, which had placed pressure on public finances. He emphasized the need to contain debt to protect the government's ability to fund essential services such as education and healthcare. However, he acknowledged that fiscal policy alone could not generate the growth needed to address unemployment.
Godongwana identified infrastructure investment, skills development, support for small and medium-sized enterprises, and a stronger industrial strategy as important parts of the response. During a discussion moderated by Arena Holdings CEO Pule Molebeledi, former Statistician-General Dr. Pali Lehohla questioned when investment commitments would translate into visible infrastructure projects. Godongwana responded that achieving an investment level of 25% to 30% of gross domestic product required contributions from both the public and private sectors.
The forum, which brought together political and business figures, highlighted the challenge facing South Africa: securing investment is only part of the task, and the government must also ensure that capital is converted into infrastructure and productive economic activity. Gugu Motlanthe, executive trustee of the Kgalema Motlanthe Foundation, warned that economic exclusion was undermining confidence in democracy and emphasized the need to rebuild trust by putting people at the center of public life and advancing economic transformation.
Key points
- Former President Kgalema Motlanthe calls for a sovereign wealth fund to drive investment and growth in South Africa.
- Finance Minister Enoch Godongwana emphasizes the need to contain debt and invest in infrastructure, skills development, and small and medium-sized enterprises.
- The forum highlights the challenge of converting investment commitments into visible infrastructure projects and productive economic activity.
