Letter: Government needs to step carefully with localisation master plan

Speaking to the SA Tomorrow conference hosted by the JSE with Old Mutual, Standard Bank and UBS, President Cyril Ramaphosa said government had taken a "number of steps to improve the investment environment" ("Investors urge SA to accelerate structural reforms", November 7).

I may have missed it, but surely steps that purport to encourage more investment in the country would include, at the very minimum, the complete ditching of expropriation without compensation? There is little reason to think investors (both local and foreign) would want to sink a serious amount of capital into a place where any future government can arbitrarily seize what those investors have built over many years.

Further, for government to take seriously any investment drive (not simply buzzwords), it needs to step very carefully with the current ongoing localisation master plans. These not only have the potential to undermine the African Continental Free Trade Area, but would also slowly undermine SA businesses' competitiveness (as some will receive subsidies and other protections from international competition).

International investors in the trade and innovation space would want to invest in an environment where supply chains are robustly formed and thus better able to withstand future shocks, as opposed to a space where government protectionism and a command-control mentality suffocates business formation, job-creation and actual positive long-term transformation.

This article was first published on BusinessDay on 8 November 2021.