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00:00Hello, everyone. Thanks to Reto and Patrick. Thank you so much for being with us at the
00:09inaugural Bloomberg Africa Business Summit. It's great to have you with us.
00:12Thank you, Lizzie.
00:13I'm not going to make you lie down on the therapy couch as we analyze all the business
00:18here in Africa, but it is so good to have you, especially because you just not so long
00:23ago joined the Public Investment Corporation. And of course, you came from the Development
00:27Bank of South Africa. So I feel like you have the perfect background to answer a question
00:33that I'm sure is on a lot of people's minds in the audience today. And that's, how do
00:39you balance making money with doing good?
00:43Oh, good evening. Really, it is something that actually is not that easy when you work for
00:51an asset management company. But because of the mix of our clients, it becomes possible.
00:59You have the pensioners as beneficiaries from the GPF perspective, but the UIF and the compensation
01:07fund, they are much more willing to take much more high risk because they are looking for impact
01:13and they're looking for job opportunities. So it becomes easier. But even GPF, they are able to
01:20allocate us what we can be able to invest for bigger impact and also for transformation.
01:26Yeah, I definitely want to get into everything that you're investing in. If we look at the
01:29outlook for South Africa at the moment, the market's been on a tear, on track for the biggest gains
01:35since 2009. Do you expect that to continue?
01:39We're quite positive about it. And actually, on the back of South Africa coming off grey listing
01:45and the stability on our national fiscars. So it really gives us a very positive outlook.
01:55We saw also S&P upgrading South Africa's outlook, which is very, very, very positive.
02:02A really significant milestone.
02:04And as a result of that, we think we will continue on this trajectory. And our inflation outlook is
02:12quite low as well. It's something that we're quite excited about it. But it's just that we need to
02:17be much more aggressive on driving the infrastructure as a country.
02:21Okay. What about beyond South Africa? I know about 75% of your assets under management are in listed
02:28South African stocks and bonds. But what opportunities are you looking at on the rest of the continent?
02:34There are massive opportunities, both on the industrialization side, as well as on infrastructure.
02:40The continent is still in huge need for massive infrastructure development. But now that we are
02:50talking about AI and technology, it becomes even much more important for us to drive electrification.
02:58Because we know that AI takes a lot of power. It's important that we can be able to leverage on
03:06these micro grids across the continent, and also renewable energy, as well as investing on the
03:12base load for the continent, and also for business as well to drive. Because we need to create jobs for our
03:19youth. We need to create jobs for the peoples of the continent.
03:22Well, yeah, something that you and I have talked about a lot is how AI seems to be the perfect opportunity
03:28for Africa. If it's powered by young people, and this is a population that's the fastest growing and
03:34youngest in the world, and that AI boom is also powered by rare earths, which are not short of
03:42here in Africa, isn't this the moment for the continent?
03:45Well, this indeed is the moment for the continent. We really need to be able to live up to it.
03:51We have the youth, we just have to prepare our youth properly, in terms of education, so that they
03:58can be able to drive the advent of AI very meaningfully. And also that what God has given us and blessed the
04:07continent with in terms of rare earths, we really need now to be much more smarter. We can't afford
04:13also to miss on the opportunities where now our political principles have got to start driving
04:20the right policy to make sure that there is much more beneficiation and there's much more
04:25industrialization on the back of this rare earth and strategic minerals. And it is important from our
04:31perspective that we really start to aggressively invest on the beneficiation and industrialization
04:38on the back of these minerals.
04:39Well, yeah, you've often talked about how private capital is key to unlocking that infrastructure
04:45financing gap. How do you do that? What's the PIC doing to unlock that?
04:50We have even allocated the project PREP, which is the risk capital, if you ask me,
04:57but also we are partnering with the DFIs, both in our sister DFIs inside the South Africa, as well as the
05:05rest of the continent and internationally. The multilateral development finance institutions,
05:10the likes of the World Bank, African Development Bank, and many other multilateral and national DFIs
05:20in Europe in particular, are extremely keen to come and work with us in really unlocking
05:26and catalyzing the private sector and private investments into infrastructure on the continent.
05:32And are you talking to Sovereign Wealth Funds about joint ventures outside of South Africa?
05:38We really are looking at partnering much more strongly with Sovereign Wealth Funds because they're
05:44looking for opportunities. And we are saying to Sovereign Wealth Funds, come to the continent,
05:51we will partner with you, come to the continent, we will join hands with you. The peoples of the
05:57continent wants to work with you. So really for us, it is extremely important to attract that capital
06:04to come and be able to create impactful opportunities for the peoples of Africa.
06:09Well, I know you're meeting with some of them later this week. Are there any deals in the pipeline you
06:13can tell us about? We have very exciting pipelines. And really, I mean, if we were to look at
06:19the electricity infrastructure, which is quite important in the growth of any economy, we have
06:31water infrastructure, we have ports infrastructure. And in South Africa, we have seen a lot of structural
06:37reforms along these infrastructural types. And now you can see the excitement in the private sector.
06:44We now need to make sure that we're able to come up with a strategic initiatives and innovative
06:52structuring and guarantee schemes to make sure that we can really, really catalyze and incentivize the
06:59private sector to come and play a very meaningful role in this. And this is not on a charitable basis.
07:06This is on a very beneficial and economic return basis. So it's something that we really want to
07:13lead the charge as we want international partners to come and work with us. And really, if we were to
07:19look at this platform, the fact that South Africa is hosting the G20 says, South Africa, Africa,
07:29Africa, sit back and listen. There are massive opportunities to be taken advantage of. Let's
07:37tell our story much more better than we've ever been able to. This is the moment for the continent.
07:43Yeah. It's a massive opportunity, right? The world's looking at South Africa. But in terms of the world
07:49view of investing in South Africa, how much does it matter that President Donald Trump isn't here for the G20?
07:55Yeah. President Trump has his own reasons. President Trump has his own policies that influence his
08:05decisions. But I think what is important is the world will move forward with or without the US. We
08:13respect the decisions of the US. They have a right to do what they think is right. We shall partner with
08:20the willing partners and make sure that we make the difference that we want to see for the peoples of
08:26the continent. But it's not just President Trump, is it? So you've got the likes of Ford and Glencore and
08:32Arcella Mittal all scaling back their plans in South Africa. They cite energy, they cite infrastructure,
08:39they cite logistics as problems that they've been facing. How's the PIC helping to address some of those
08:46constraints? We are working with our government to really try and address the challenges. And I
08:52think if we were to look in the past five years, in South Africa we've come a very long way. We had
08:58massive load shedding as a country, but look at where we are today. Not a single day of load shedding.
09:04We had massive challenges on a number of fronts, but we are the first one to admit that yes, the challenges
09:12are here, but we are committed in addressing them. I think you will find South Africa being one of the
09:19very few outliers where people can be able to express their views without actually being persecuted for
09:29it. And we really want to do better for the peoples of South Africa and the peoples of our continent.
09:35We owe it to them. And the good thing is our government says, hold us accountable.
09:40And they are keen to listen to us and they are able actually to put in place initiatives
09:46that are necessary. I think these structural reforms, it was because of the massive pressure
09:50that was put on them by the business community to say, let's do the right things by these things.
09:55And the government actually led the charge and look at where we are. Now we just need to say, can we then
10:01step up to the next level so that we can really be able to start seeing fruits? But I think the outlook
10:06says we'll begin to see progressive positive growth for our country and for the peoples of South Africa.
10:14And now we need to start saying, how do we integrate the continent more meaningfully? And how do we take
10:20advantage of the continental free trade area that actually we're talking about at a very meaningful
10:27level? I think what we also see in terms of the global trade dynamics and the geopolitics, it says,
10:36Africa, start looking at yourself. Start looking at opportunities that are presented by yourselves on
10:43the continent and start looking to those that want to work with you. Partner with them meaningfully,
10:50but don't be over reliant on the outside. As the continent, we need to come together much more
10:57stronger. We need to invest amongst each other much more stronger so that we can be able to
11:02future-proof ourselves. I think we owe it to ourselves. We have seen it. It's been demonstrated
11:08time and again that we really need to wake up and seize the opportunities that actually are presented
11:15within the continent. 1.4 billion people, you can't ask for anything better than that.
11:20I could feel your excitement, Patrick. I wonder in your new role, given that the PIC is wholly owned
11:25by the South African government, how you see the need to influence policy makers? How do you plan to do
11:33that? We are wholly owned by the South African government. It says we have better access than many
11:40to government and we can be able to influence a lot of government policies. We can be able to bring to the
11:47attention of our political principles a number of initiatives and a number of policy direction
11:54that actually might have to be undertaken. I think we need to do more of that and we need to partner
12:02with our sister, SOEs, so to speak, and we need to partner with our government departments that drive
12:10certain policies so that we really can be able to create a much more stronger and attractive investment
12:19environment for business. Another risk for investors is corruption. It's the elephant in the room
12:26and I wonder how you feel about this because it's an issue that did touch the PIC. There were serious
12:32questions about governance at the PIC. In this role, how do you feel it's your responsibility to turn that
12:38round? I think we have a duty and a responsibility to hold ourselves accountable and to allow us
12:47ourselves to be held accountable. I think it's very important. It's important for the peoples of South
12:53Africa. It's important for our clients that we need to be able to be beyond reproach and governance can
13:02never be up for debate or negotiations. We need to be able to leave these principles. And for the country,
13:11yes, I think as I said earlier on, we are the first one to admit that we have these challenges,
13:17but you are doing something about them. And we really want them to be as minimal as possible so that
13:25business can be able to drive rule of law is important for any investment destination. And
13:32attractiveness of our country, we can only be optimally, can only give optimal benefits to the
13:39country if there is very strong rule of law and people will be willing to trust us with their own
13:46people to come and work here, looking after their investments, if we make it safe and we decisively
13:56deal with corruption as well. I think we owe it to this country and we owe it to the investors across
14:02the globe. It's a powerful message. Speaking of investors across the globe and that global perspective,
14:07I wonder when you look across to Asia, Vietnam, for example, was once considered a high-risk frontier.
14:13It's now a manufacturing hub. Are there lessons that you draw from Asia for Africa?
14:18We have a lot of lessons to learn from Asia. And really, Asia has produced a lot of tigers,
14:24so-called tigers. And as the continent, it says, you can never lose hope. We can look at these guys
14:33as the inspiration to say, Africa, you can achieve, you can do what they've been able to do as well.
14:39And most of these countries are now sitting as near-developed nations. But they come from very,
14:47very, very low past and very minimal investments. And sometimes even the skill set was not where it
14:54was supposed to be. But they looked in themselves, they partnered with themselves, and they drove very,
15:02very, very, very hard bargains, even in terms of international deals. And they were able to invest
15:09in their own people. They invited international investments and capital and skill sets to teach
15:16their own. They invested in education. You can't touch those guys when you come to education. So these
15:21are the kinds of things that we also need to see that it is quite possible and it is quite doable. We can
15:27do it, but we need to take ownership. And I think the principle of, if it is to be, it is up to me,
15:35I think this is what it is. We have to take ownership and lead by example and make sure that our future in
15:44the form of our youth are well-capacitated and well-prepared to play a very meaningful role and
15:52economically viable role in the future of this country. Otherwise, when you go on pension,
15:58who's going to carry us? I think that's what the challenge is. So our youth has got to have a purpose
16:05to go to education, capacitate themselves much more. But as business community, we need to bend
16:12over backwards to accommodate our youth. We really, really, really, there can never be a future
16:18without a well-prepared and well-capacitated youth. And as you were saying, they're really
16:23the market for AI, right? They're the opportunity. Absolutely. Okay, so they're the lessons from Asia.
16:29What's the lesson that the rest of the continent and indeed perhaps the world should be taking from
16:34South Africa? I think it's very, very interesting. I think South Africa, we are a democratic country.
16:44Really, we are the country that says we can be able to look at the mirror and see what is not good about
16:53us and work at it. And I know that it is still early days, but if we're to look at the trajectory and
17:00the trend of the policy direction that we're taking as a country, it says all is not lost. Very soon,
17:09we'll start seeing the benefits and the dividends of this introspection and these initiatives that
17:16we're taking to make sure that we better prepare ourselves and we better create the right environment
17:23for our businesses. The logistics is extremely important and we are working on it. And you can see
17:29now the appetite of the private sector to get into this space and to make sure that they become part of it
17:36and they're able actually to make sure that we facilitate international trade much more efficiently.
17:42But investment into technology is extremely important. That is one area that we're looking
17:49at. So the infrastructure, including the ICT infrastructure, because AI is going to be the
17:54next electricity of the global economy. So it is important that we pull all stops to make it happen
18:01for the peoples of Africa and for the peoples of South Africa. I think you will one day look back
18:07with a sense of pride and say the hosting of the G20 in South Africa was never in vain.
18:14This is the moment for Africa. This is the moment for South Africa. It is the moment for our youth.
18:21They can never lose hope, but we shall lead by example. Well, it's certainly an exciting moment to have
18:26our first Bloomberg Africa business summit. Patrick, we're very grateful for your time. Thank you.
18:31Thank you very much.
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