Fin24

Red tape chases firms from SA

2012-07-10 09:42

Johannesburg - An engineering company is shifting its focus towards other African countries because of restrictions on doing business, rather than suppressed demand, Business Day reported on Tuesday.

Stephen Meijers, chief executive of ELB Engineering, a division of JSE-listed ELB Group [JSE:ELR], said on Monday many of the company's negotiated deals were in Africa because there were often fewer hurdles.

He believed the South African market was depressed currently, but blamed first world restrictions for making it more difficult, especially for smaller businesses, to get projects off the ground.

South Africa has the ability to compete with the rest of the continent for the business of any engineering firm. However, the rules and regulations in other African countries are easier to manage, which draws South African firms.

"Demand is down in SA and there is a lot of demand in Africa. For any engineering company, Africa is the place to be," said Meijers.

The government acknowledged at the end of June there were problems with red tape which need to be tackled to unlock investment spending, according to the Business Report at the time.

"It discourages the appetite for projects," Economic Development Minister Ebrahim Patel told a business breakfast at the ANC's policy conference in Midrand.

Old Mutual's Crispen Sonn said at the event that the cash equivalent sitting on the balance sheets of large corporates had reached more than R500bn. This was not flowing to big capital projects, he said.

"Why is that cash not flowing more effectively into the economy and what is the government's analysis of this?" Sonn asked.

Patel said firms sought a mix of opportunity and return on capital.

"We recognise the speed with which we move to unlock some of these constraints on investment... is just too slow."

He acknowledged businesses faced yards of red tape.

"We are learning where some of the systemic challenges are," Business Report quoted Patel saying.

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Comments
  • Henk - 2012-07-10 09:54

    Not red tape - ANC interference!

      riaan.w.vanwyk - 2012-07-10 10:01

      The more ANC interferes, the more companies (and job opportunities) will run away.. But will they open their eyes to see that 1 + 1 = 2? I doubt it..

      richard.hipkin - 2012-07-10 10:02

      Also COSATU demands!

      press.enter.12 - 2012-07-10 10:59

      Simply put - this ANC governmnet wants to punish you if you dare to risk your capital, mobilize resources or employ people, rather fatal one could say . . .

      Glyn - 2012-07-10 12:27

      Vote DA! End of "red tape"!

      nigel.vanysendyk - 2012-07-10 12:42

      ANC stupidity, & its lack of backbone (no leadership) to deal with draconian labour labour laws forced on SA by its alliance partner COSATU, but they rather lie & be weak to get votes than to create jobs, many more thousands of jobs will be lost before these fools wake up & realize they have to attract investment, encourage local business & stimulate production, yes you need the white people, get over it & start moving forward.

  • Ian - 2012-07-10 10:06

    what did the ancyl uneducated morons say the other day, good riddance to foregn investment, looks like you get your dream retards

  • paul.duplessis - 2012-07-10 10:19

    Power junkies who largely haven't had any to wield before just can't get enough of "governing" us to death whilst Cosatu demands ever more without offering any accountability or counter-performance. Burn suckers, burn!

  • tommy.jones.754918 - 2012-07-10 10:34

    Some of the problems experienced. Officials don't want to take responsibility (playing tennis); Decisions and policies doesn't trickle down to the officials at the bottom; Departments have conflicting agendas; Processes are extensive and takes way too long; Officials are desk sitters and doesn't have a clue about what happens in practice; Officials can only see in black and white without considering all factors; Political ball playing; Officials earn salaries whether they are weak or incompetent - why work harder if I'm going to get paid anyway (no driving force). I can go on forever.....

  • peter.jefferies.90 - 2012-07-10 11:23

    How can they call the issue red tape? I can gaurantee that this red tape magically vanishes when someone offers the ANC money on the side. It is all just about the fat cats in the ANC run govenrment getting richer!! Africa is far easier and surprisingly less corrupt to deal with!! This is way a lot of SA Property companies have stopped almost all work in South Africa and are chooing Africa!

  • vernon.samuel.7 - 2012-07-10 11:57

    If I am not mistaken, the ANC/government is still at loggerheads with Walmart over their investment in this country. That is a signed and sealed deal and we are still fighting their entry into our country!!! Seems the ANCYL and Cosatu are also anti-foreign investment as it entails our country being held to ransom by imperial western capitalists, who have no other agenda than suppress and exploit the African. The ANC's spineless approach to nationalisation of mines is also causing our once world-leading mining sector to slip into oblivion. I maintain that the two most important things that our country requires urgently to improve foreign investment are 1) the ANCYL being cut down to size by their parent body and focusing on issues affecting the youth instead of economics; and 2) the ruling party cutting ties with Cosatu as the destructive trade union movement is holding the government to ransom on unsustainable wage demands and also not helping economic growth with their hundreds of crippling and violent strikes.

  • Glyn - 2012-07-10 12:24

    Red as in communist! Red as in BEE and AA! Red as in anc!

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