SA business feels the backlash

2015-04-19 15:00

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Ongoing xenophobic attacks will have far-reaching implications for local companies operating in the rest of Africa

South African businesses were on tenterhooks on Friday afternoon as individuals, officials and organisations in other African countries retaliated against the latest wave of violent xenophobic attacks in South Africa.

News reports of a 48-hour ultimatum – which expires today – issued to the South African embassy in Nigeria by the ruling All Progressives Congress to contain the violence or face the closure of businesses operating in the country were not substantiated, according to telecommunications giant MTN, which has operations

in Nigeria.

“We have received no direct threat and have heard nothing from the [South African] embassy in Nigeria, and have not seen any letter, so we do not have a comment on what could be a rumour at this stage,” said spokesperson Chris Maroleng.

Satellite television provider MultiChoice, another local company with operations in Nigeria, did not address the issue directly, but condemned the latest spate of attacks against foreign nationals in Durban and Johannesburg.

But in Mozambique, trucks have been stoned near the border town of Ressano Garcia, and have been forced to return to South Africa.

Sasol and its service providers are pulling more than 300 South Africans out of the petrochemical giant’s Mozambique projects after locals protested against these employees’ presence there.

Sasol spokesperson Alex Smith said 340 South Africans, many of them employed at projects the group was developing and constructing – including a low-pressure natural gas compression project at the central processing facility in Temane – were being brought home in phases after unrest from employees of service providers working for Sasol.

The facility, which cleans and dries gas before it is transported through an 865km pipeline to Sasol’s plant in Secunda, Mpumalanga, was recently expanded at a cost of $220?million (R2.6?billion).

“Mozambican employees of our service providers have expressed concern around the reported incidents of violence against Mozambicans and other foreign nationals in South Africa,” he said. “[They] are also protesting against the presence of South African employees of our service providers working on the project.”

But Siobhan Mccarthy, corporate communications head at cement producer PPC, which has operations in Mozambique, said it mostly employed Mozambicans.

“There have been no evacuations,” she said. “Our commitment to each country in which we operate extends beyond our financial investment. As a result, we have good corporate relations with local stakeholders. We will continue to monitor the situation closely.”

Mining company Gold Fields said it had nothing to fear at its operations elsewhere in Africa.

Spokesperson Sven Lunsche said: “We have no plans in place to evacuate South African nationals from Ghana, which is the only country where Gold Fields has operations in Africa, outside of South Africa.”

He added that the situation at its Damang and Tarkwa sites in Ghana was very calm and the company had not received any threats.

On Friday, Minister in the Presidency Jeff Radebe said the attacks had far-reaching implications for the country’s economic and social relations on the continent. Total trade with other African countries reached R446.8?billion last year (see box).

“South African companies that are running successful businesses on the continent, which help to contribute to our revenue and [are] sustaining our economy, may suffer the same fate,” said Radebe.

He also pointed out that local artists such as Big Nuz, Kelly Khumalo and Cassper Nyovest had to cancel concerts abroad for fear of reprisals.

Isaac Nkama, a member of the national council of the SA Institute of International Affairs, who also consults for South African companies that want to expand in Africa, said they had been doing great business elsewhere in Africa.

“Things like this make its efforts more difficult because the perception is that it has not been dealt with effectively,” he said.

“It can make expansion more difficult and can make operations more uncomfortable.”

He sees regulatory processes getting tougher and more inflexible for South African businesses wishing to expand into other countries because of changed perceptions.

“But I do think in time all of this will pass,” Nkama said. – Additional reporting by Fin24

Bottom line


In 2014, South Africa’s exports to the rest of Africa totalled more than R301?billion, or 30% of the country’s total exports.

In the same year, South Africa’s imports from the rest of Africa were worth more than R145?billion, or 13% of total imports.

More than 100 South African companies, including MTN, Standard Bank, Sasol, Shoprite, MultiChoice and Mr Price, are doing business in Nigeria, according to the Nigerian-SA Chamber of Commerce.

More than half of the MTN Group’s total turnover last year in Africa was generated outside of South Africa, and the majority of that money was made in Nigeria.

MTN’s revenue from its operations in Nigeria in 2014 amounted to almost R54?billion, more than the R39?billion that the company made in South Africa.

South Africa’s major banks – FirstRand, Standard Bank, Barclays and Nedbank – continue to place strategic focus on African expansion.

The Shoprite Group of Companies is Africa’s largest food retailer and the group aims to have 200 stores in the rest of Africa by the end of this financial year. – Gerrit van Rooyen

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