For the past five years or so, South Africa, Africa’s biggest economy, has become the talk of the town in international circles for its high levels of crime, ‘unreasonable’ demands of trade unions, state corruption, nepotism, and numerous attempts to curtail freedom of expression and press liberties.
These ‘ills’ continue to make foreign investors anxious and nervous, some of whom have announced that they will be slashing thousands of jobs and closing shops and move elsewhere due to what they call the worsening of the labour and moral situation in Africa’s land of unlimited possibilities.
However, when one door closes, the other one opens, as the saying goes.
Despite these ‘ills’, the country continues to be the darling of foreign investors as trade and industry minister Rob Davies found out recently. “In one week last month, I participated in three key investment announcements by Proctor and Gamble in Gauteng, Johnsons Controls in East London and Tellumat in Atlantis. Investment announcements by these three companies amount to R2.4 billion (about 275 million USD),” Davies said, speaking last week at a budget speech in Cape Town.
Furthermore, the department of trade and industry (dti) has, since the 2010/11 and during the 2012/13 financial years, facilitated investments totalling R125.5 billion (about 13 billion USD), Davies said.
South Africa has also attracted a total of R53.5 billion in investments in the 2012/13 financial year, with the potential of creating 20 000 jobs, according to the dti.
As if launching a provocative tirade to a bunch of Afro-pessimists who were looking at him, Davies asked: “Are all these efforts bearing fruit or are the pessimists right?” He added: “However of greater significance than the value of the investment is the strong vote of confidence that these companies have provided in the South African economy.
“These are not investments that were made on the spur of the moment. These companies have rigorously assessed our market, considered the potential risks, and compared our country to other potential investment destinations.
“After considering all these factors, these companies – and many more like them – have chosen to invest and create jobs in the SA economy.”
However, even if he did not name those challenges, Davies has nevertheless admitted that they exist here. He said: “These investors have not been put off by our challenges but recognise that Africa is the next growth frontier and that South Africa as the most industrialised country on the continent is of key strategic importance.”