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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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