Rationale for 'Investment Bill' is fast collapsing
The rationale for the so-called Promotion and Protection of Investment Bill is fast evaporating, as public hearings on the Bill proceed in the Portfolio Committee on Trade and Industry. The DA has argued that this Bill will not promote or protect investments at all, and in fact will act as a significant deterrent to future investment in South Africa. This view has been resoundingly confirmed by the representatives of the largest investors into South Africa.
The EU Chamber of Commerce and Industry, and the American Chamber of Commerce in South Africa (AmCham), who together represent the overwhelming majority of foreign direct investment into South Africa, have both said that the Bill will lead to disinvestment out of South Africa. They have made it clear that the Bill, if it is passed, will make it much more difficult to attract new investment to our country.
The EU Chamber of Commerce and Industry represents a massive 77% of all inward FDI into South Africa, and the AmCham represents R278 billion worth of investment and 220 000 jobs.
If the EU and AmCham - which together represent the overwhelming majority of investment into South Africa - say the Bill will cause disinvestment, then the rationale for the Bill surely collapses.
So far, the DTI has been unable to mount any defence of its Bill. The AmCham went so far as to say that the Bill, if passed, would be “another nail in the coffin” of the South African economy.
This follows last week’s submission by the European Union (EU) in which similar sentiment was conveyed in being opposed to the Bill.
AmCham today made submissions to Parliament’s Portfolio Committee on Trade and Industry, confirming what the DA has said previously – the Bill in its current form will have a disastrous effect on foreign investment in South Africa, which will cripple economic growth and job creation.
In their submissions, AmCham says that the Bill will result in a “flight of investment out of South Africa” as the Bill “does not provide the necessary protection that investors need” and “it does not promote investment”.
As a developing third world country, South Africa’s ability to create jobs and grow our economy relies heavily on foreign investment. To actively prevent such investment through irrational and over-burdensome regulation such this Bill, speaks volumes in this government’s attitude towards South Africans who cannot find a job.
The Department of Trade and Industry has squandered an opportunity to produce a world-class investment promotion Bill that re-affirms South Africa’s commitment to being an open, secure and attractive investment destination.
The DA remains opposed to the Bill in its current form. It does not alleviate the many valid concerns that international investors have about the direction of government policy in South Africa. It is poorly drafted and ambiguous, and it needs to be extensively re-written in the Parliamentary process.
Issued by Geordin Hill-Lewis, DA Shadow Minister of Trade and Industry, 15 September 2015
