Investing in South Africa: Is it safe?

Bribe-Based Black Elite Enrichment
21st February 2017
Efficient state bank is enough to make a horselaugh
11th April 2017
Show all

Investing in South Africa: Is it safe?

Investing in South Africa: is it safe?

by Douglas Gibson[i]

 

If you were a potential big investor in South Africa, either from overseas or a local, what would you want to hear about the country and its prospects?

I suggest you would want to be sure that you would make a profit; be able to draw the income; pay tax at reasonable rates; obtain necessary services with reasonable efficiency; buy and sell subject to laws fairly and reasonably applied and disputes adjudicated in terms of the law and the constitution; and, above all, know that your investment was safe from unjust confiscation.

If you, Mrs Potential Investor, listen to some of the idiot voices emanating from the political swamp, you might decide never to invest here and to get your money and possessions out of the country as a matter of urgency.

Starting with the president, Mr Jacob Zuma, you will hardly find reassurance.  He has come up with a new enthusiasm: radical economic transformation.  He is now even talking about expropriating property without compensation. His idea of radical economic transformation is not that of empowering the masses to promote fairness and social stability; it is to ensure that the elite, the politically connected, the members of the presidential family, the hangers-on, the rent-seekers and those prepared to pay commissions to the connected gorge themselves at the feeding trough.

Happily, the president has only two more years in power and unless he is very fortunate indeed, he may end up spending days or even years in court on several hundred criminal charges.  Where that will end, no one knows at this stage but there is reasonable certainty that he will not for very long be able to do the damage his enthusiasm for radical transformation might suggest.

The problem is that he has many acolytes who also love the idea of taking what is not theirs and pretending to distribute it to the poor, about whom they care so much.  There are venal members of the cabinet, of little discernible merit, who would kill for Zuma.  The ANC Women’s League, led by the inimitable minister of Social Development, disapproves of the recent budget “because it ignores the imperative of radical economic transformation.” Never mind that she and the president and the whole cabinet approved the budget.

The ANC Youth League, led by the distinctly middle-aged Mr Collen Maine also supports the mindless radical economic transformation.  No doubt the executive members hope to board the gravy train and never get off it.

Then you have the irrepressible Mr Manyele Manyi (Jimmy that was) with the Black Business Council using their weight to promote the concept.

And pushing assiduously from the side is Mr Julius Malema MP, leader of the Economic Freedom Fighters, the man who wanted to kill for Zuma but who has changed his mind now, getting more and more excited about the possibility of taking land from its current owners without compensation.  He told black South Africans a week ago, that if they saw land that they fancied, they should just take it – it had been stolen from “us” by the whites.

From the side of the current governing party and the third largest party in South Africa you, Mrs Investor, will have received no encouragement.  You will probably have decided to risk your money   elsewhere and on no account to try to promote growth and jobs and a closing of the poverty gap in South Africa.

But I would urge you to at least take a look at the rest of the economic and political scene.  South Africa is a fascinating country with many facets; it does not only have people who adore President Mugabe and his efforts in Zimbabwe and the Venezuelan fiasco.  We also have business people who provide the work opportunities and pay most of the taxes. They are generally very sensible and more than prepared to work with government and labour to promote growth.

The Democratic Alliance (DA) under the leadership of Mmusi Maimane is also taking a lead in new thinking aimed at real empowerment; real poverty alleviation; real growth and job creation.

Someone who is unemployed needs a job.  The government cannot create all the jobs – the private sector has to do that. It is imperative that pro-growth policies (essentially pro-poor policies) and the education and upskilling of our people become the lodestar of government for the next few years.

Where injustices have been done in respect of land, this must be rectified within the law and the constitution. but for five million or more people, urban dwellers, it is easily attainable to give them the title deeds of the land and houses they occupy. If ever there was a radical economic transformation, that would be it.  Impoverished people would become land owners, transforming their lives.

Maimane made an impressive speech in London in the middle of last year.  He said that he had never been as enthusiastic and positive about South Africa as he was then.  Some people thought he was somewhat deluded, but in August the voters delivered a verdict, changing South Africa forever.  The country is on its way to becoming a proper constitutional democracy where power passes periodically through the ballot box. The voters removed the ANC as the government in the major Metro councils and will very likely do the same at the general election in 2019, at least in Gauteng Province and possibly also replace the national government with a new coalition government.

Mrs Investor, I am telling you there is hope and that with all the bad, there is also a lot of good that could lead to you reaping the rewards of major investments in South Africa. Let’s see whether we can nudge the country in the right direction.

[i] A former opposition chief whip and former ambassador to Thailand, Douglas Gibson is a keynote speaker and writer. Visit his website at: douglasgibsonsouthafrica.com

Douglas Gibson
Douglas Gibson

A former opposition chief whip and former ambassador to Thailand, Douglas Gibson is a keynote speaker and writer.

Leave a Reply

Your email address will not be published. Required fields are marked *

16 − 14 =