In response to question by FF Plus, president gives assurance that every effort is made to attract local investors back to South Africa
8 May 2018
Since 2005, the South African investment profile underwent a dramatic change with local businesses increasingly investing abroad while foreign investors are avoiding South Africa all the more.
According to the economist Mike Schüssler, the nett foreign direct investment (FDI) expressed as a percentage of the gross domestic product (GDP) reached a peak in 2005 with 24% and an all-time low in 2017 at almost -31%.
In light of the aforementioned and against the backdrop of the ANC government’s decision regarding expropriation without compensation, Dr Pieter Groenewald today during question time in parliament asked President Cyril Ramaphosa what the government is telling foreign investors to persuade them to invest locally.
Dr Groenewald told Pres Ramaphosa that the mere fact that the government approves of the principle of expropriation without compensation scares investors away.
In his response, the president said that South African investors probably identified good investment possibilities abroad, which they consequently made use of.
He gave the assurance that many of these investors have vast reserves at their disposal and that the government is engaging with them in an attempt to persuade them to return to South Africa and invest in the domestic market.
He said that many investors have listened to the request and are willing to consider it, he also added that the signs are very promising.
What the president and the ANC, however, do not seem to understand is that these potential investors are profit-driven companies and not charity organisations. Such companies will not invest in a country where there is policy uncertainty, a lack of service delivery and where the infrastructure is collapsing. The proposed minimum wage also serves as a deterrent for companies that want to invest in South Africa.
Issued by Pieter Groenewald, FF Plus leader. 8 May 2018