SA investment conferences about public relations, not reality - Chris Hart | Fin24
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SA investment conferences about public relations, not reality - Chris Hart

Nov 29 2018 06:45
Carin Smith, Fin24

Policy in South Africa is increasingly becoming a choice between "awful or dreadful" - something that is not particularly useful in relation to luring investments, Chris Hart, executive chair of Impact Investment Africa said on Tuesday.

"There seems to be a lot of investment conferences taking place in South Africa and it is all about public relations, but one has to deal with the reality on the ground," Hart said during a panel discussion about facilitating investment in African agriculture at the African Agri Investment Indaba in Cape Town.

"One needs supportive policies, including about land reform. Yet, we have conferences saying Africa is open for business, but we are not really open for business in Africa. We have feudal systems at grassroots level and governments with social mindsets at the top trying to extract resources."

In his view, instead of creating an enabling environment, many African countries are in reality "closed for business". That is why he believes Africa needs supportive policy certainty, then capital will flow to countries where it is easier to do business.

"There are only about four or five countries in Africa which actually 'get' this," said Hart. When asked which countries those would be in his opinion, he named Mauritius, Rwanda, Botswana, Kenya and Ghana.

He said there are three big challenges to attracting investment to Africa - he calls these the three ugly sisters - namely over-taxation; over-regulation and corruption.

President Cyril Ramaphosa has hit back at similar views, saying that two recent investment summits that took place in South Africa, together with a jobs summit, had been successful in clinching tens of billions of rands in new investments. Addressing the National Council of Provinces last week, Ramaphosa said the "overwhelming consensus" from the summits was that SA was a "favourable destination for investment".

A PwC report published earlier in the month, meanwhile, estimated that Ramaphosa's SA Investment Conference, which garnered nearly R290bn in pledges, could create and sustain 165 000 direct and indirect jobs over five years. 

According to Hart, greater focus should be placed on key areas to boost investment in Africa - like food, housing, jobs, education and ownership.

"In my business we are looking at the type of investment where you can take a subsistence farmer and add capital and technology to create an opportunity to take the agriculture sector especially to a much higher level," said Hart.

"In this way a middle class can be created in rural areas of Africa."

Dr Patrick Kormawa, sub-regional coordinator for Southern Africa of the Food and Agriculture Organisation (FAO) of the United Nations, said during the panel discussion that he agrees there cannot be investment without the right policies. Policies should promote investments in agriculture on the continent.

It is important for him to have the right institutions in place and to organise small-holder farmers in such a way that they can produce for the market.

"If governments do not put the right institutions together they cannot provide support to the agriculture sector," he said during the panel discussion.

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