miningNews

BLSA’s Mavuso laments lack of investment in South Africa

From Mining Weekly
BLSA’s Mavuso laments lack of investment in South Africa
11th August 2020 BY: SIMONE LIEDTKE
WRITER
While there are talks of mobilising more investment to kickstart the South African economy post-Covid-19, Business Leadership South Africa (BLSA) CEO Busi Mavuso laments that current developments are showing the opposite, as projects and investments have either been cancelled or delayed.
In her weekly newsletter, Mavuso refers to the combined frozen investment between South African Breweries, Heineken and Consol Glass worth R13-billion, which was blamed principally on the alcohol ban that has affected their sales.
However, while these are not the only ones affected and while many others are also “being shelved” across the country, she notes that, in order to fully grasp the scale of investment, “we should count not only the investment that is being cancelled [owing] to the current environment, but also the investment that has never been planned in the first place”.
Mavuso cites policy uncertainty, and the confusion that investors face when trying to understand what the outlook is for their rights, should they make an investment.
“Investors have had to try and make sense of the scrap over expropriation without compensation, years of delays and changes to proposed mining regulations and laws, flipflops over digital migration and so on,” she laments, adding that when one has “a whole world” of investment opportunities, this kind of uncertainty “just isn’t worth the effort”.
It is for this reason that Mavuso says that while the R13-billion investment loss “feels tangible and immediate, it is just a drop in the ocean of the investment that isn’t happening”.
Investment can seem abstract when thought of as flows of money, but Mavuso sees it rather as jobs being created and economic activity being spurred.
As an example, the R6-billion investment that Heineken has paused in respect of building its new brewery on the KwaZulu-Natal north coast would have created 400 new and permanent jobs.
“It would have consumed inputs that would create many more jobs around it. But with alcohol bans having been imposed without even consulting the industry, and no expiry dates put to them, there is no way the company can go ahead with the investment,” she laments.
She acknowledges the strain that alcohol use has placed on much-needed healthcare facilities, but says that government could have engaged with the industry to discuss ways in which to mitigate these affects, “rather than unilaterally imposing an open-ended ban”.
Mavuso notes that government and the industry “could have at least worked out a set of deadlines and objective criteria that would have provided some clarity and predictability for investors”.
Further, she encourages South Africa to “not lose sight of the bigger picture”, saying the country has, for many years, been leaving investment on the table that could have been mobilised for the economy.
One area, she highlights, is spectrum.
“We complain a lot about high data prices and mobile networks are eager to roll out increased network capacity that boost volumes and reduce prices. But the Independent Communications Authority of South Africa has been running an on-again, off-again auction process since mid-2010.”
Operators are still waiting for the access that will allow them to sink billions into their networks, she says.
Another is the Mineral and Petroleum Resources Development Act Amendment Bill, which has been bouncing in and out of Parliament since 2007.
“That is 13 years in which mining companies have kept investment on the sidelines while they wait to see what the regulatory environment will look like. There are many other examples I could cite,” Mavuso notes.
She avers that if South Africa is serious about mobilising investment, “then a public sector process is only one part of what must be done”.
“We must be equally serious about mobilising private sector investment. And that requires delivering the kind of environment that allows the private sector to get on with it, confident that they are playing on a level field with a referee that won’t change the rules midway through the game.”
If you enjoyed this article, Get email updates (It’s Free)

Tags
Show More

Related Articles

Leave a Reply

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

Close