SA VS INDIA AS AN INVESTMENT DESTINATION
While Barclays Wealth’s Henk Potts believes that India will be the biggest emerging market in the next few years, he still views Africa as the final frontier for investors.
Even though South Africa, and Africa, face challenges around stable energy supply, labour instability, corruption, hunger and disease, he still views SA as the financial gateway into Africa. “India faces similar challenges as Africa, such as infrastructure needs and a move towards urbanisation, but India has done a better job at encouraging foreign investors compared to SA, which has done well with domestic consumption. Africa has exciting potential, but fundamental issues need to be addressed, which India is doing proactively.”
In contrast, Investment Solutions’ Glenn Silverman is of the opinion that compared to India, SA is still ahead in many respects and remains a high-potential country. “In fact, India and the rest of the Brics have much to learn from us. India still has many challenges that make our problems seem much smaller. These include mass poverty, corruption and red tape,” he says. “However, India seems to be taking steps forward, while SA seems to be stagnating. India is in the fortunate position where it has been given a clear pro-growth and economy mandate from the public. SA, on the other hand, seems to be wrestling with its identity, lacking a vision and willingness to achieve it. And although the National Development Plan provides a good road map, there is little buy-in and policy often appears to contradict it.”
SA will do well to avoid additional barriers and reduce others to make it easier to do business in SA, he says. “For global investors and businesses, the sheer size of the markets in China and India present enough opportunity for them to put up with barriers and inconveniences. South Africa does not have the same luxury.”