Sentiment is so low because the private sector doesn’t understand how the government’s counting of investments and attempt to “count” what is going on where fits with their much more profound need to reduce uncertainty and shift the benefit and cost dial of investing.
The lack of X factor at the UK-Africa investment summit (and seen too in Davos) was telling. There was no “Have you seen the Kenyans?” in hushed whispers of excitement about SA — despite some interesting companies present at the exhibition in the summit. Speaking to people around the edges of the summit — private and public sector investors, international and regional development banks — it was evident there was a lack of interest in SA.
Delving further into why showed not necessarily a hugely negative view on SA but a weariness of endless foot-shooting and missed opportunities. This was particularly the case for investors with huge amounts of capital waiting in the wings to invest in new rounds of renewables procurement who are agog at the fact there is an energy crisis yet a world-class procurement system is laying idle.
Among manufacturers and retailers and those in-between, there was a sense here that though SA has decent infrastructure and a sound financial system, it lacks a meaningful pitch for its cost-effective integration into the African Continental Free-Trade Area (AfCFTA), while other countries in the West and the East are pitching integrating regional supply chains that can be linked up across Africa with AfCFTA — giving a sense of scale.
This was compounded by the official pitch coming from the department of international relations & co-operation: “We want your investment but if you don’t invest, we will do it on our own” — to paraphrase minister Naledi Pandor at one event — was a bizarre off-the-cuff remark when you have such low savings, and a skills and employment problem. No, you can’t do it on your own — you need money from abroad and the skills and technology that comes with it.