President committed to making it easier to do ‘canna-business’
President Cyril Ramaphosa says he’s committed to streamlining the business environment in which the cannabis industry is operating in. He made these remarks at a keynote address at the 30th Anniversary of a proudly South African assets management firm, Ninety One, at the Cape Town International Convention Centre on 16 March 2022.
This comes days after Nedbank’s head of agricultural banking, John Hudson told Jeanette Clarke on Moneyweb Radio on 14 March 2021, that cannabis offered exciting opportunities for South Africa, but that the Government first needed to get the right regulatory environment into place.
During his address President Ramaphosa stressed the importance of a new consensus for growth between the private sector and the government in a range of industries. He said that a specialised unit in the Presidency would be dealing with red tape reduction to improve the business operating environment.
“Through the Economic Reconstruction and Recovery Plan our national infrastructure build programme is proceeding apace. This shows that our economy is recovering. But even as we expect 2.1 percent growth this year, it is far below the levels we need. It is not enough to turn the tide on unemployment and to lift millions of South Africans out of poverty”.
“The Infrastructure Fund is preparing a pipeline of projects with an estimated value of R96 billion, with a number of catalytic projects expected to start construction this year,” said the President.
Ramaphosa said government was working on “strategies to harness the potential for new growth industries ranging from cannabis production to electric vehicles to green hydrogen”.
In the first public comment on the cannabis economy from a senior manager of South Africa’s ‘Big Five” banks, Hudson told Moneyweb that agriculture was “almost a glue in the Southern African economy. “If we are investing in agriculture, you are bound to see jobs being created along the entire value chain”.
He warned however, that new sectors like the cannabis industry were being hampered by excessive bureaucratic requirements and a lack of a clear regulatory framework.
“What I really liked about the SONA speech [State of the Nation Address], and the president spoke about taking away the red tape – I think that is critical if we look at cannabis, for example, which is showing great potential, and we have clients that are investing in that. There is no doubt they are investing because there are potential returns” said Hudson.
“What appears to me, though, is that the hoops they need to jump through, and the lead time to get into production is three years or more; that’s a long time for people to have capital tied up and invested, and ‘do you get there or don’t you?’
“So I think we need to streamline that, we need to look at how we bring some of these high-growth opportunities like cannabis, for example, and how we bring them to an operational point far quicker than we’re doing now. To a large degree governments [have] a major role in that. You know, they’ve got to make sure that the regulatory environment and everything else that goes with it really allows for these emerging enterprises to take hold.”