Although United States companies operating in South Africa were more positive about the local economy, there was now more concern over forced local equity than crime, a survey revealed on Sunday.
Black economic empowerment ”negatively affected investment decisions” according to an overwhelming 74% of respondents surveyed by the American Chamber of Commerce in SA (AmCham). This grouping had grown from 54% last year.
”This issue also received the single highest number of voluntary comments in the open-ended questions section — double that of the next cited question,” said Luanne Grant, director of AmCham.
However, Grant said the survey environment differed from last year in that the 2004 survey was dominated by negotiations on transformation charters in most sectors of commerce and industry.
It also stressed that most US companies were embracing the broad tenets of empowerment and were pursuing policies that encouraged it.
On crime, 57% of respondents referred to ”business crime” specifically and stated that it had a ”negative effect on business decisions”. This concern had dropped from 64% last year.
The generalised security situation in South Africa was cited by 55% of companies as a being negative, again slightly down from 60% last year.
Third on the ”worry list” was the poor regulatory environment created by the Department of Health.
In spite of their worries, 62% of respondents reported that the current economic climate was ”excellent” or ”good”, compared with 50% who said so last year.
”Encouragingly, three times more companies have increased confidence in the government’s ability to improve the business environment, compared with companies that have less confidence in government’s ability to do so,” said Grant.
”Even more positive is the fact that almost half the companies report that they plan to invest more in South Africa in 2005 than in the previous year.
”This is a factor which is up seven percent, whilst 32% of respondents plan for unchanged investment. Only 15% have reported ‘less investment’, a similar figure to the 2003 survey.”
AmCham further reported that relationships with and service from SA government departments was ”generally good” — a major exception being the Department of Health.
The most regularly cited positive factor was in the area of government’s macro-economic policies, reported overwhelmingly as ”stable or healthy”.
”The most favourable voluntary comments were received on the performance of Department of Trade, their trade policies in general and attempts by them to improve the regulatory environment.”
The Department of Trade and Industry (DTI) and the SA Revenue Services (SARS) were the highest rated government departments.
Thirty-two percent said the DTI was ”good” while 15% said it was ”improving”.
Thirty-nine percent said SARS was ”good” and 30% said it was ”improving”.
On parastatals, the statement read that Telkom, and to a lesser extent Eskom, received strong ratings from respondents in the area of ”good” and ”improving” but ambivalence in the area of service levels appeared to be the case since both received a higher return than last year for ”deteriorating/bad”.
On exchange controls and the rand’s volatility, the survey — held in October — revealed that the same percentage of 32% was returned this year in the form of ”yes” votes when asked if the exchange rate represented a ”negative influence” upon investment.
AmCham surveyed 65 American companies, operating locally, which employ 100 000 people. – Sapa