Photo by: Duane Daws
International companies are still looking at South Africa as a base for their expansion plans into the rest of Africa, advisory firm Intergest South Africa director Volker Werth says.
“Despite the doom and gloom that is facing the country, its foreign direct investment growth between 2013 and 2014 doubled to R140-billion,” he said.
He pointed out, however, that many companies were realising that South Africa could not be treated as an individual market.
Speaking at the Bauma Conexpo, in Johannesburg, on Tuesday, Werth noted that companies were using a regional approach. “Companies cannot come to Africa to do business with the intention of using a singular business strategy throughout, as every country on the continent has its own approaches to business.
“To be successful, it is imperative to gain local knowledge, partner with local advisers and establish local connections,” he stressed.
Werth stated that “contrary to popular belief”, China was not the biggest foreign investor on the continent, despite its big stake in the minerals industry.
“In 2012, the UK and France shared the top position; in 2014, this position was shared by the UK and the US, with France in third position,” he said.
Also speaking at the event, Intergest South Africa business development manager Celine Laukemann said that “slowly, but surely”, the countries in the Southern African Development Community had broken down trade barriers, with 85% of trade now being duty-free.
She added that there were many investment opportunities on the continent, particularly in agriculture, as it had 590-million hectares of unused fertile land that could be exploited.
Laukemann stated that South Africa’s National Development Plan also had the potential to unlock “massive opportunity” for investors on the continent.