Key Takeaways
- Ninety One CEO Hendrik du Toit warns that South African firms are hoarding cash due to weak confidence, but sees early signs of a spending rebound.
- Johannesburg’s deteriorating infrastructure – unreliable water, potholed roads, and service‑delivery gaps – threatens talent retention and economic growth.
- The city’s municipal elections on 4 November will decide whether the incumbent ANC‑led coalition or opposition front‑runner Helen Zille will lead the turnaround effort.
- Du Toit believes Johannesburg can be revived quickly if private‑sector expertise and capital are mobilised, pointing to renewable‑energy projects and the Pier 2 port upgrade as models.
- Ninety One plans to deploy domestic capital first, then attract international investors once clear “proof points” of success are demonstrated.
- The firm, spun off from Investec’s asset‑management unit in 2020, now manages roughly $240 billion and intends to use its global reach to support South African infrastructure renewal.
Corporate Cash Hoarding and Early Signs of Recovery
Hendrik du Toit, founder and CEO of Ninety One, observes that many South African companies have been reluctant to invest, choosing instead to “hoard cash on their balance sheets.” This caution stems from a decade of sub‑1 % annual GDP growth, persistent political instability, and fears over deteriorating public services. Yet du Toit notes nascent indicators that corporate spending may be beginning to recover, suggesting a shift from defensive cash‑holding to more proactive investment once confidence improves.
Johannesburg’s Infrastructure Crisis
The CEO describes Johannesburg – Africa’s financial capital – as “appallingly managed,” citing chronic water cuts, roads riddled with potholes, and unreliable electricity and waste‑collection services. These deficiencies not only frustrate residents but also deter skilled executives from staying in the city, threatening the retention of talent that is vital for local businesses and multinational operations headquartered there.
Impact on Talent Retention and Economic Growth
Du Toit stresses that if Johannesburg does not improve its basic services, the city will struggle to keep executive talent, which in turn hampers productivity and discourages new investment. A livable, well‑served urban environment is a prerequisite for attracting and retaining the human capital needed to drive innovation, services, and high‑value industries that can lift the broader economy.
Upcoming Municipal Elections and Political Landscape
Johannesburg will hold municipal elections on 4 November to determine which parties will govern the city’s various districts. The incumbent African National Congress (ANC)‑led coalition currently controls the municipality, but polls show veteran opposition politician Helen Zille leading with 36 % support, ahead of the ANC’s 27 %. Neither candidate surpasses the 50 % threshold needed for an outright victory, implying a likely coalition government or runoff scenario.
Helen Zille as a Potential Change Agent
Zille’s reputation as a former premier of the Western Cape and a vocal advocate for good governance positions her as a front‑runner capable of ushering in reforms. Her lead in the October 4 News24/SABI Strategy Group survey suggests voters are eager for change, though she will need to build alliances to secure a stable governing majority should she fall short of an absolute majority.
Legacy of Corruption and Low Growth
Du Toit traces part of Johannesburg’s malaise to a legacy of corruption and mismanagement that began under former President Jacob Zuma and persisted during Cyril Ramaphosa’s early tenure. This era of weak governance contributed to an economy that has expanded less than 1 % per year for more than ten years, eroding investor confidence and prompting the cash‑hoarding behaviour observed across the corporate sector.
Private‑Sector Renewable Energy as a Model
Despite the challenges, du Toit points to successful private‑sector initiatives—particularly the boom in renewable‑energy projects—as examples of how private capital can deliver tangible infrastructure improvements when paired with clear policy frameworks and bankable projects. These ventures demonstrate that returns are attainable when risks are properly mitigated and incentives aligned.
Pier 2 Port Modernisation as a Blueprint
Another exemplar cited by du Toit is the ongoing modernisation of Pier 2 at the Port of Durban, sub‑Saharan Africa’s largest container gateway. The project, driven by a corporate partner, aims to boost efficiency, capacity, and competitiveness. Du Toit views Pier 2 as a proof point that showcases how “the best in the world” can be brought in to upgrade critical logistics infrastructure, offering a replicable framework for other sectors.
Investment Strategy: Domestic First, International Later
Ninety One’s approach to revitalising Johannesburg involves first deploying domestic South African capital, thereby building local confidence and demonstrating viable returns. Once these “proof points” are evident—such as improved service delivery, tangible cost savings, or revenue‑generating assets—the firm intends to attract international investors who may otherwise perceive the market as too risky. This staged strategy seeks to de‑risk the investment ladder and unlock larger pools of global funding.
Ninety One’s Background and Global Reach
Originally founded as part of Investec’s asset‑management unit in 1991, Ninety One was spun off in 2020 and now operates as an independently listed firm managing roughly $240 billion (about R4 trillion) in assets. With South African roots and a global investor base, the company is positioned to leverage its expertise, networks, and capital to support infrastructure renewal projects that could turn Johannesburg’s fortunes around and stimulate broader economic recovery across the continent.