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The eThekwini Working Group (Presidential eThekwini Working Group, PeWG) aims to stimulate Durban's economic development by attracting investments from pension funds into various projects implemented by the eThekwini municipality.

Recently, PeWG held a meeting with representatives of pension funds where a series of potential investment opportunities were presented. The group emphasized that investments, especially in infrastructure, are a critical element that will serve as a foundation for the growth of the funds' own portfolios.

The Metropolis

Co-chairperson of PeWG, Mike Mabuyakulu, spoke at a recent event with pension funds, outlining the available opportunities in eThekwini. This meeting was themed 'Unlocking Pension Capital for Banking Projects in KwaZulu-Natal' and gathered trustees, CEOs, and senior staff from the institutional investment sector, as well as asset and fund managers. The attending funds and asset managers did not disclose their names.

Mabuyakulu stated that the group's objective is to explore ways to effectively align and utilize internal capital structures with the real economy to support long-term development while ensuring reliable financial returns considering investor risks. He noted that there is a broad national consensus that faster economic growth depends on investments in infrastructure, strengthening industrial development, and expanding productive sectors of the economy.

He added that capital seeking sustainable long-term investment opportunities is not scarce, but a problem has arisen in creating conditions to bridge these two realities. Mabuyakulu stressed the paramount importance of cooperation and partnership between various funds and the government as a whole, and particularly local government, to achieve mutually beneficial goals.

According to him, South Africa possesses enormous domestic capital in the form of institutional funds represented at the meeting. He specified that, excluding structural overlaps between the managing company and its clients, this pool represents a unique, non-overlapping domestic capital of approximately 2.96 trillion rand, with the total assets under management across the entire ecosystem reaching 5.96 trillion rand. This capital reflects the accumulated savings of the country's workforce.

Mabuyakulu acknowledged existing challenges related to structural, regulatory, and behavioral aspects within pension and investment funds when participating in public projects, but stated that these can be overcome. He reported that both the Presidential eThekwini Working Group and global economic studies have proposed clear practical solutions to eliminate these obstacles. Several options were presented to alleviate concerns, especially regarding risks that might deter pension funds and asset managers from investing in public infrastructure.

One of the main structural solutions is the creation of professionalized, isolated Project Preparation Institutions. According to best global practices, successful capital mobilization requires significant public investment in the early stage of project packaging before presenting them to the market. This function is served by the eThekwini Independent Public-Private Partnership Office (IPPPO).

Using specialized financial modelers, lawyers, and technical engineers, IPPPO ensures the timely completion of feasibility studies, environmental permits, spatial planning, and legal structures. This allows pension funds to conduct due diligence on mature, viable assets, significantly reducing transaction costs and implementation timelines.

Numerous examples of potential investments in the city were presented, including: energy procurement through independent power producers (IPP); modernization of main water pipelines and wastewater treatment facilities for water supply and sewage, which requires significant long-term capital; as well as urban regeneration and commercial real estate. The city systematically puts up for sale strategically located state land and properties in central Durban for private redevelopment, inviting large pension fund portfolios to collaborate with experienced local developers to build modern mixed-use complexes, student housing, and affordable housing.

The city has developed an extensive portfolio of catalytic investment opportunities in strategic sectors such as manufacturing, logistics, infrastructure, tourism, and mixed-use urban development. These opportunities were not developed in isolation; they are supported by strategic spatial planning, coordinated public infrastructure investments, and an integrated approach aimed at enhancing project readiness throughout the entire development lifecycle.

Mabuyakulu noted that the scale of opportunities is considerable: the aggregate portfolio of catalytic investments is valued at approximately 227 billion rand in potential investment and is capable of creating over 300,000 jobs in construction, as well as more than 120,000 permanent jobs. These figures demonstrate the scale of economic activity that can be unlocked with the support of effective institutions and significant collaboration.

Economist Douwe Rudd opined that there is fundamentally nothing wrong with pension funds investing in infrastructure, but he believes it is difficult for pension funds to achieve good returns from such investments. He also pointed out that the government has collected significant funds from the public that should go towards such investments, but most are spent on current needs.

A public discussion on the issues of developing sustainable tourism took place in Nukus. Additionally, winners of the business idea competition organized as part of the project 'Youth and Women - Permanent Tourist Ambassadors of Karakalpakstan' were awarded.

The iPhone 18 Pro may have a production cost 38% higher for Apple. This cost increase could result in a higher final price for the device; speculation points to $1,399, which is equivalent to about R$ 7,145 at the current exchange rate. However, it seems the company will choose to absorb this additional cost, reducing its profit margin, instead of passing the full increase on to the consumer.

Additionally, the iPhone 17 Pro may also see a price adjustment starting this week, although there is no official confirmation yet. The main reason cited by specialized press is the crisis in RAM availability, but other stages of the production process would also be impacted.

According to the portal 9to5Mac, Apple will likely adopt a tactic similar to the one used in the MacBook line, implementing a partial increase in the final value of the products. Despite this, research conducted by the site TrendForce indicates that manufacturing costs could grow even more in 2027, exceeding the projected 38%, making it harder to maintain competitive prices.

Apple stands out as one of the few companies in the technology sector that has not experienced significant price changes recently. Even after CEO Tim Cook declared that adjustments were 'unavoidable,' the phone line remains unchanged. So far, movements have been noted in computer models, such as Mac Mini and Mac Studio, but some analysts have already predicted increases starting with the next generation of iPhones.

The report released by TrendForce reinforces this prediction due to the increase in production costs. According to the publication, RAM is the main cause, representing 34% of the total assembly cost. If the shortage persists at the same rate, chips could account for over 40% of the cell phone's total manufacturing value.

In this scenario, costs could exceed the 38% increase predicted for the initial period, as early as the first fiscal quarter of 2027. It is important to note that, as previously reported, Apple is expected to launch a second product window between March and June of next year with the standard iPhone 18.

To compensate for this substantial increase without drastically raising the price of the premium model, Apple could dilute this cost across other generations. The iPhone 17 Pro, for example, would be one of the first to feel this adjustment, expected this second week of August. However, as of the closing of this article, the suggested price on the Apple website remained unchanged.

A warning issued by TrendForce points to an even more challenging situation for Android devices in the coming months. Higher prices will be more noticeable in entry-level or mid-range devices, categories where manufacturers' profit margins are smaller.

The RAM shortage constitutes a generalized problem in the technology market. The redirection of memory manufacturers towards components intended for artificial intelligence servers has reduced the supply of chips for hardware products. This has impacted various segments, from computing to video games, resulting in delays and increased costs in the development of the future PlayStation 6, for example.