2016 is a make or break year for South Africa Incorporated
Business confidence is at an all time low, as is the Rand against all major currencies, our global standing as an investment destination is on the decline and unemployment keeps on increasing. Coupled with this, rising interest rates, a crippling drought and soon to be had food shortages, we truly are headed for the year of economic discontent. But who's fault is this?
What the ANC have done to some degree of success, is drive a narrative amongst the electorate that the government has nothing to do with the economic problems that face South Africa. That these are mostly the result of global ‘economic head winds’ and the fault of some ‘investment strike’ by big business. It is in fact the greatest form of propaganda that post democratic South Africa has seen.
In reality, nothing could be further from the truth. At every level, the government has failed to deliver on it’s promise to create an enabling environment for businesses to grow, attract investment and create jobs. The ANC is the biggest enemy of every aspirant entrepreneur who wants to start a business. Red tape abounds for anyone with a good idea and instead of making the regulatory environment for those who want to start a business easier, all government does it make it harder.
This time last year, I wrote a piece on the impending legislation of the Promotion and Protection of Investment Bill which the President, under the veil of darkness, quickly signed into law in December 2015 and the still, un-tabled, Licensing of Businesses Bill. I detailed how both bills were bad for investor confidence because of the lack of clarity they provided on the intended purposes of them and how bad both would be on the war on unemployment.
The Investment Bill was passed by the ANC in 2015 despite every single overseas investment chamber speaking out against the legislation warning of disinvestment and job losses. Its unthinkable that you would ignore the very constituency you are trying to attract. The Licensing of Businesses Bill remains buried in Parliament with no indication of when it will be discussed, leaving the threat of state licensing and control of businesses looming large.
It was no wonder then that Foreign Direct Investment nosedived 74% to $1.5 billion in 2015 according to a report by the United Nations’ Conference on Trade and Development. Investors have lost confidence in South Africa to protect its investment and they are voting by pulling out their much needed investment.
This statistic should have been enough to shock the South African government into an urgent response but instead ANC MP’s have voted to send the Expropriation Bill last week, which many believe to be unconstitutional as well as giving no security to investments, to Parliament to be debated. Another nail in the coffin of South Africa’s economy.
It will be no good for President Jacob Zuma to stand up before Parliament and the nation on 11 February to deliver his State of the Nation address and not address these important matters. He simply can not ignore the legislature burden that his government puts on entrepreneurs as well as creating an environment that is hostile to business and investors.
President Zuma needs to commit himself and his government to urgently reviewing and amending these damaging pieces of legislation and start partnering with the private sector to make South Africa work. Time is short and unless a collective effort to address our problems is found quickly, junk status for our economy may already be written in the stars.
Dean Macpherson MP is the DA Shadow Deputy Minister for Trade and Industry
