Research and analysis

South Africa: new business chamber builds relations with the ANC – March 2014

Published 16 April 2014

On 19 March, the new British Chamber of Business in Southern Africa held a well attended dialogue event with ANC Secretary General Gwede Mantashe, ANC Head of Economic Transformation Enoch Godongwana and Finance Minister Pravin Gordhan. The event followed the High Commissioner’s meeting with ANC Deputy Secretary General Jesse Duarte where we agreed on the need to establish a new dialogue between the ANC and the British business community.

0.1 Reminding us of the past, reassuring us of the present and promoting the future

In an expansive opening statement, Mantashe stressed that foreign business must understand the recent past in South Africa in order to grasp the future, stressing the achievements made in turning South Africa into a “normal” country post-apartheid. He said that the 2012 Marikana shootings had been a “lesson” and that mining was now in better shape than in 2012. Land remained a major issue, and there would be a “revolt” if it went unaddressed, but the ANC would not (not) be taking the Zimbabwe option. Looking forward, the ANC was strongly committed to infrastructure investment, so that SA could better ride the good times in the global economy.

0.2 Voicing business concerns

The Q&A session provided an opportunity to register some concerns among British business, including government regulation and legislation (such as advertising bans on alcohol sales and controversial amendments to private security and mining legislation), as well as the poor state of labour relations in the mining sector.

Of particular note was:

• The ANC’s commitment to implementing the National Development Plan, where projects are already taking place.

• The stressing of the economic importance of mining, particularly for exports, and downplaying of the actual opposition to proposed changes to the mining legislation. Strikes in the platinum sector were unique, as it was the only major sector not to have centralised bargaining.

• Confirmation that SA was generally in favour of PPPs, particularly in renewables, with around 20 projects currently underway, bringing in some R3bn to R5bn of investment.

• Comments on the Private Security Bill, which says that foreign security companies must become 51% domestically owned. The ANC’s concern was increasing domiciling of the economy abroad, local employment and national security. Our Trade Commissioner commented that only a small percentage of the private security sector was in foreign hands, and in any case these foreign companies largely employed locals. Under these circumstances it was difficult to understand the governments concerns about national security.

0.3 British business’ positive role

We were able to register the productive role British business is playing in SA’s development, for example in promoting entrepreneurship

0.4 Comment

The event has put the new Chamber on the map with the ANC and boosted the Chamber’s credibility with its members. A healthy, constructive tone of engagement for this event has built trust, and with it the opportunity for increased dialogue between British business and the ANC. We will aim to build on this by inviting new Ministers to address the Chamber post-election and hope to plan a similar event with the ANC in London.

0.5 Disclaimer

The purpose of the FCO Country Update(s) for Business (”the Report”) prepared by UK Trade & Investment (UKTI) is to provide information and related comment to help recipients form their own judgments about making business decisions as to whether to invest or operate in a particular country. The Report’s contents were believed (at the time that the Report was prepared) to be reliable, but no representations or warranties, express or implied, are made or given by UKTI or its parent Departments (the Foreign and Commonwealth Office (FCO) and the Department for Business, Innovation and Skills (BIS)) as to the accuracy of the Report, its completeness or its suitability for any purpose. In particular, none of the Report’s contents should be construed as advice or solicitation to purchase or sell securities, commodities or any other form of financial instrument. No liability is accepted by UKTI, the FCO or BIS for any loss or damage (whether consequential or otherwise) which may arise out of or in connection with the Report.