SA government should do more to promote businesses
IN 1995 WE as young South Africans set out in our vehicles, through Zambia, where we entered Malawi close to Livingstone and back. It was a time of euphoria and wherever we went we were greeted with cheers as new South Africans on the continent. Suddenly borders fell. This was also the case for South African business on the continent.
With recent municipal elections behind us we need to ask many questions, including whether the dividends obtained through foreign policy placed South African business in a better position or whether it was just due to the euphoria at the end of apartheid. How did this play out in real terms and is it really South Africa’s foreign policy that contributed to the success of business outside the country?
Let us first look at one of the countries operating more successfully in Africa. When the president of France visits Africa it looks like the who’s who of French business. In his entourage there are always the chief executives of Bolloré, Orange, Bouygues, Alstrom and various others. These companies need no introduction in the business world and represent some of the wealthiest in France. Foreign policy in the classic sense is the extension of national interest and French national interest correlates well with its foreign policy, such as advancing business interests in the rest of the world to the advantage of France.
So is South Africa’s foreign policy less successful? Yes, our minister was right when she pointed out that there was enormous growth in trade between South Africa and the rest of Africa from 1994 to today. She noted that an increase in trade with the continent was registered from a meagre R11.4 billion in 1994 to R385bn in 2015. Upon this statement one would like to believe that the Department of International Relations and Co-operation (Dirco) alone was responsible for this achievement, but the reality is far from it. Was it not rather the euphoria from the 1990s that boosted our presence on the continent?
To understand the relationship between Dirco and South African businesses we need to go back to the time of apartheid as this laid down the psychology that would influence the way business looks at foreign policy for generations to come. During apartheid some businesses were fortunate enough to be well connected with the apartheid government and somehow did make it onto the international scene.
Access to markets
The rest of us tried by all means to avoid our foreign representation as it certainly would have as consequence a detrimental effect on access to markets. At that time a psychology was born that meant in real terms that business, in its own interest, had to avoid South African foreign representation in order to be successful. It did not end there.
Today that psychology still prevails, albeit with a small difference. Business cannot rely on Dirco to advance its interests. The reason is simple as it is noted that the foreign representation South Africa has internationally is just not up to the standard that one would expect from your government. Business will tell you so. The consequence is that South African businesses have to rely on their own cunning to succeed.
The recent visit of President Zuma to Nigeria with a business delegation makes no mention of the level of these business people and nowhere is it noted that notables were part of the delegation, except for the six ministers that tagged along. Unlike France – or any other country for that matter – our presidential visits look more like an excursion than a well planned effort to advance South Africa’s economic interests.
We never see the chief executives of Shoprite, Pick n Pay, Distell, Anglo, Remgro, etc on these delegations. We do see a lot of agreements, which are good and facilitate interaction, but that’s about it.
There is probably good intention in these visits, but they come as an afterthought. In that sense it is interesting to note that the Nigerian visit came at a time when South African businesses were suffering blows at the hands of the Nigerian authorities with penalties, imprisonment and more.
From a business perspective, one only needs to investigate a few articles to realise that the government is never mentioned in the trials and tribulations of South African business on the continent. No business ever mentions intervention of the government on their behalf.
The US, France, China, UK all make use of the same age-old formula. Diplomacy paves the way by smoothing over the political resistance, which then clears the way for the establishment of long-lasting business relations on the continent.
These governments then also keep an eye on how their businesses are faring, intervening rapidly when it appears that things might go wrong. Can South African business claim this kind of intervention? The answer appears to be no.
The foreign representation South Africa has internationally is just not up to the standard that one would expect from your government.
Political pitfalls
What happened to MTN in Nigeria was as a direct result of MTN not avoiding the political pitfalls that are so acute in Africa. It is then also inevitable to conclude that Dirco was nowhere in sight when things started going wrong.
One day you do business with this person, the next day there are elections and the whole game changes, and everybody is surprised as to how can something like this happen as all the Ts were crossed and the Is dotted. Business in Africa is not a statistical effort, nor a legal effort. It is a deliberate relational effort.
In May our foreign minister in her budget speech claimed that Dirco was driving efforts on the continent. How is this possible when the minister at the same time proposes that the budget be sliced by R153 million?
If South Africa is dependent on its business relationships then slicing Dirco is not an indication of seriousness, or maybe it is an indication that business does not need Dirco to achieve growth.
To make South African business in Africa thrive we need to invest more – more in our diplomats and more in our representation abroad, especially in Africa. We need to narrow the gap between the government and private business. George Rautenbach is the former UN chief of staff and chief executive of Africa Business Experts.