South African Chamber of Commerce and Industry CEO Neren Rau recently said that domestic issues in the country are causing more havoc than expected as international and local business opportunities are being affected, Business Day Live reported.
International businesses establishing headquarters and head offices in South Africa may be a thing of the past he said as even South African chamber members have mentioned relocating to other parts of Africa — where the business climate is more promising and free of strikes.
The Chamber’s observations were made clearer when BMW announced last week that line expansion and increased capacity in South Africa would be put on hold for an unspecified amount of time.
“South Africa has become complacent in terms of its approach to attracting and keeping head office presence and foreign investment, and other countries have become aggressive on this front,” Rau told Business Day Live.
With strikes halting progress and overall production, interested investors Rau suggested, are worried about the future growth of businesses.
“This is a reflection of a shaky political environment and concerns around mining laws and strikes,” Shilan Shah, Capital Economics’ African economist, said in the report noting that South Africa’s investment lure on account of heightened domestic issues has declined.
Business Day Live also reported that although strikes across industries in South Africa have sprung up, the country’s financial backing for infrastructure projects has remained in tact. In addition, violence related to strikes isn’t as severe as last year.