SA is ripe for foreign direct investment

2015-12-23 06:00

IT’S an ancient adage that when the tide has receded to its farthest point, it has to turn back. (Law of King Canute, 985 to 1035.)

Maybe three out of four of those currently seeking employment are crying out for a turn of the current economic tide, especially in the export-creating job sector.

I returned recently to my native Ireland. The country has three times the growth of the average European nation, a seven percent growth increase and +5,6% in GDP for the past nine months. Sales by multinationals that have invested in Ireland grew by 12%. Consumer spending rose 3,6%.

Foreign direct investment has been pouring into Ireland, a small country of four million people on the Western periphery of Europe. If this can happen to Ireland, why isn’t it happening in SA? I am not able to answer beyond “education” and “government drive”.

Unemployment here in a year has fallen from 11,1% to 9,7%. An election looms in both South Africa and Ireland next year. The people of Ireland will most likely back the government showing success. The people of South Africa might vote along traditional lines in smaller numbers. Local unemployment (25,5%) has been so high for so long that many voters are bound to look around. Things could not be much worse in the mines. The fall in the value of the national currency is faster than that of any emerging nation. The value of key commodities like iron ore is in free-fall.

South Africa is as ripe as it is going to be for foreign direct investment. Who is going to invest in a country where the politicians have a stronger record in self-enrichment than enriching the country with export sales?

Only proactive leadership will turn export achievements into jobs. When the outside world recognises a new broom sweeping the corridors of power, winds of change will blow through the local economy. That has not happened during the decline of the rand against the currencies of its prime export markets. Next year’s SA election may separate the dancing men from the action men. For the sake of the many I came to know well over 13 years in your country, I can only hope for a turn of the tide.

DONOUGH MCGILLYCUDDY

Ireland

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