SA business feels ‘heat’ of attacks
JOHANNESBURG – South Africa’s cabinet has warned that companies operating in the rest of Africa may be targeted following the xenophobic attacks on African immigrants, just as Johannesburg-based Sasol Ltd announced it was repatriating South African employees working on projects in Mozambique for their own safety.
On Tuesday, Business Against Crime SA (Bacsa) expressed concern that the attacks could exceed the reach of xenophobia, causing a brain drain and an outflow of investors.
“How soon before we lose more skilled people in the country who want to flee South Africa because they fear the uncontrolled violence? How soon before businesses move their investments to countries that have an environment in which they feel safe to flourish in?” it asked.
Bacsa said it has recently observed a number of violent crimes being committed in front of security cameras, the public and even in front of the media. “Why are criminals becoming so arrogant? It is very clear that the criminal justice system is not a deterrent, because perpetrators just do not care.
“Are we becoming a lawless country? It recently seems as if we are heading there fast,” said Bacsa.
The business body said the xenophobic attacks have already negatively impacted South African businesses both locally and in parts of Africa, a loss they can ill afford in a gloomy economic climate. “Business is the largest tax contributor to the South African government and yet at this point in time is highly vulnerable, without sufficient protection of their property or people.
“The South African economic climate has been bleak over the last few years. This problem has been escalated with the crisis at Eskom, and the recent spike in serious crimes. The xenophobic attacks are the cherry on top which is going to cause significant further deterioration of the economy.
“As South Africans, we are proud of our constitution because it set the tone for the development of a peaceful and fair democracy. It especially advocates the right to life. Government needs to spend more time teaching our communities about the values of the constitution and equally practise these values.
“More needs to be done to create jobs in the country, and to alleviate poverty. Many members of the community are disgruntled as they are still suffering in post-apartheid South Africa as they did before, if not more so. This is why any sort of competition for jobs or job creation involving foreigners is going to be unpalatable. Government needs to review its spend and channel considerably more funds towards social development in the country.
“As an organisation that deals with the SADC countries, I am deeply embarrassed by the xenophobic attacks in the country at present. Engagements and relationships built with other African countries over many years now stand the risk of being destroyed and tainted with distrust,” said Bacsa CEO Advocate Simi Pillay-van Graan.
She called on the business community at large to join Bacsa in saving South Africa from further violent crimes.
In Nigeria, the newly-elected All People’s Congress (APC) together with civil society handed a memorandum to the South African embassy in Lagos, giving the government 48 hours to stop the violence, or else South African businesses in Nigeria would be shut down.
It puts businesses such as MTN, Shoprite, Pick n Pay and Multichoice in a tight spot, as their African operations contribute significantly to company revenues.
In MTN’s case, for example, the company has twice as many subscribers in Nigeria than it does in South Africa, with the Nigerian operation alone contributing 37 percent of group revenues.
Significantly, MTN’s Nigerian business is growing while its South African one is stagnating – latest company results show that revenue in the half-year ending June 2014 grew 22 percent in Nigeria, while it shrank 3.4 percent in South Africa.
On Tuesday, South Africa had to close its consulate in Nigeria following anti-xenophobia protests as social media continues to perpetuate the tense situation in the country.
South African consul general in Nigeria, Sam Monaisa, said in an email to the South African business forum in that country that the closure would remain in force until today.
He said Nigerians were using social media to blow an already tense situation in South Africa out of proportion and stoking emotions.
Mega retailer Shoprite has 357 outlets in the rest of Africa, including 115 Shoprite supermarkets, and more than 100 other furniture, home decor, pharmacy and restaurant stores in 14 African countries.
Last year, a report revealed that just five Shoprite stores in Angola sold more cans of energy drink Red Bull than in all of Shoprite’s 382 stories in South Africa, and 19 Shoprite stores in Angola sold more bottles of the ubiquitous sparkling wine JC Le Roux than the entire South African business did.
And one of South African Airways’ most lucrative routes per kilometre is to Angola: the Johannesburg- Luanda route, at about $0.19 per km, is three times as expensive as Johannesburg-London which brings in $0.06 per km – although the UK is six times further than Angola from South Africa.
Therefore, by antagonising the rest of Africa with the xenophobic attacks, South Africa is biting the hand of the continent that feeds it. South African businesses and their shareholders must be very unhappy with the attacks.
Meanwhile, the Namibia Chamber of Commerce and Industry (NCCI) has cancelled a business exploratory mission to South Africa which was scheduled for May 2015 because of xenophobic attacks.
The week-long business mission that was scheduled for East London in Durban was meant to explore business opportunities for Namibia businesses in South Africa.
In a statement Tuesday, the NCCI chief executive officer Tarah Shaanika said they cannot continue organizing a business mission to South Africa while South Africans are telling others that they do not want to do business with foreigners.
“Those who went to set up legal businesses in South Africa from a number of African countries have been killed in cold blood during the past week and we cannot tolerate that,” Shaanika said.
Condemning the xenophobic attacks, Shaanika said the NCCI was calling on the international community to take serious actions to force the South African Government to guarantee the safety of foreigners living in South Africa.
“We are not impressed with the manner and speed at which the South African Government dealt with such barbaric acts committed by their unruly citizens. What happened in South Africa is an embarrassment to Africa, especially because it is not the first time that South Africans attacks foreigners living in their country,” he said.
According to Shaanika, no official business delegation will be sent to South Africa until they are assured that the South African Government is in full control of its unruly citizens.
This is the first time an organization in Namibia has openly condemned the xenophobic attacks in South Africa as well as withdrawn any business association until the situation was under control.