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Afrophobia scuttling SA prospects as an investment destination

from Savious Kwinika in Johannesburg

Analysts have warned that South Africa’s planned investment conference could hit a snag following recurrent xenophobic violence that claimed the lives of 12 people when it broke out in the economic hub of Gauteng recently.

The attacks are overshadowing the investment conference set for November 5-7 in Sandton, Johannesburg, where the government aims to mobilise R1.2 trillion (US$83 billion) by 2023 to revive the economy.

Economist, Luke Dzipange Zunga, who is also Global Diaspora Chamber (GDC) chairman, said xenophobia was a deterrent to investments.

“Investment drives are a must to mobilise capital to grow the economy. However, it appears South Africans do not see Africans as the investors the country is seeking,” Zunga argued.

He said the South African government and its citizens only viewed investors as Europeans, Americans and Asians, particularly the Chinese.

“A group of African migrants have proposed to contribute capital towards South African citizens’ programmes, but the government has not responded. It is whether they are still working on it or they don’t see Africans as
investors,” equipped Zunga.

Small and medium enterprises operated by foreign nationals were looted and destroyed during the recent xenophobia attacks.

Ironically, SMEs contribute immensely to the growth of the local economy that is struggling to create jobs.

Zunga, however, defended the administration of President Cyril Ramaphosa and previous leaders of South Africa saying xenophobic attacks were not government policy.

“At this stage, government has clearly articulated that everybody in South Africa is free to do business but must follow the laws of the country,” Zunga emphasised.

“Some migrants feel they are victimised, but generally everybody is aware that they are here because of problems in their own countries. South Africa is going through the same problems which other African countries experienced.”

Zunga attributed the flare of xenophobia on slowed economic growth and meager resources.

“South Africa’s poor communities, battling to survive, feel most African migrants are taking what belongs to them, brewing into conflict,” he said.

“People are worried that if South Africa cannot fix the economy, as it has so far failed to, things are going to be worse, both for South Africans and for migrants in particular, who are seen as interfering.”

Zunga lashed out at African technocrats as stumbling blocks to economic growth and job creation.

“Politicians think the technocrats know economic matters. So they follow them – that the country must invite foreign investors. Proposals to engage local Africans and facilitate them into businesses are ignored,”
Zunga said.

Yet, he added, it was agreed that Africa would be developed by Africans.

“Our technocrats are following the bank model (World Bank), and what they learned at Ivy League universities, which were not designed for poorly capitalised communities or nations,” the economist said.

“The banks are not the problem but following bank rules outside banks is the hold to economic progress. These investment drives are nothing more than repeating what many African countries have tried but failed,” Zunga

Advocate of the High Court of South Africa, Gabriel Shumba, also warned that xenophobic sentiment would drive investors away.

“Xenophobia and Afrophobia will inevitably discourage investment in South Africa, especially in so far as the economic zones on the continent are involved,” Shumba argued.

He said the retaliatory attacks on South African businesses in Nigeria, Mozambique and DRC were warning signals that South Africa needs to enjoy amicable social, political and economic relations with other African

“Further abroad, I believe that the attacks on non-nationals have become a human rights issue that international bodies cannot ignore. It can hardly be over-emphasised that xenophobia and Afrophobia in South Africa
have become a crime against humanity. Therefore, a serious human rights issue that needs regional and international state actors because of the ineffectiveness of local judiciary remedies,” he said.

“On the economic side, the country loses invaluable skills because of the attacks on non-nationals especially long distance truck drivers, selective employment and the refusal to grant permanent residence and stringent requirements to conduct business.”

The African Diaspora Forum (ADF), whose members include foreign nationals living in South Africa, was also skeptical of the country’s prospects of attracting investment, considering xenophobia was exacerbating woes culminating from South Africa’s reputation for violent crime.

“This issue of xenophobic violence, especially killing of fellow Africans and Asians, whose majority have created SME businesses in South Africa, will definitely work against the country’s otherwise noble investment idea,” said Kelechi Chukwueze, a member of the Nigerians in the Diaspora Organisation (NIDO).

Statistics for 2019 show that six of the 10 most dangerous cities in the African continent are in South Africa.

These are Cape Town, Durban, Johannesburg, Pietermaritzburg, Port Elizabeth and Rustenburg. Benghazi (Libya), Lagos (Nigeria), Luanda (Angola) and Nairobi (Kenya) are the other four.

“Having six of the most dangerous cities in the entire continent proves a country can never be a safe destination for tourism and investment,” argued Somalian entrepreneur, Yassin Abdulkadir, whose shop was razed
down during xenophobic violence in Katlehong.

The violence has already driven a wedge with fellow African nations.

Nigeria boycotted the World Economic Forum (WEF) on Africa, recently held in Cape Town between in September.

Madagascar and Zambia withdrew their football teams from friendly matches against South Africa.

The government this week maintained confidence in South Africa would attract investments.

The inaugural South African Investment Conference in October 2018 saw 1 500 delegates from South Africa and across the world gathering in Sandton to discuss investment opportunities in Africa’s most advanced

Over $20 billion of investment commitments were made at the event, as leaders from business, government, and the investment community forged relationships and explored ways to reignite growth in South Africa.

More than 1 500 delegates from across the globe are again expected to attend this year’s conference, to be held under the theme, “Accelerating Economic Growth by Building Partnerships”.

“South Africa is open for business, investment and growth,” said Minister of Trade and Industry, Ebrahim Patel.

He said the conference would again showcase South Africa as an investment destination and present a pipeline of investment projects in several sectors.

“This is an ideal opportunity for government, local and international businesses to partner on new projects which can further position the South Africa as a centre of innovation and investment growth,” Patel stated.

Trudi Makhaya, Ramaphosa’s economic advisor, said as the most diversified and advanced African economy, South Africa offered investors unique comparative advantages and features as an investment destination and trade partner in Africa.

“Investors will have the opportunity to hear from – and engage with – government and business leaders on our progress towards political and economic renewal, strengthening the credibility of public institutions and unlocking the potential and innovative spirit of South Africa’s economy,” Makhaya said.

Ramaphosa is expected to preside over the investment conference.

The Southern Times

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