Business across the continent is set to become harder for South Africans, following the wave of xenophobic attacks against foreigners in the past few weeks.
This is according to businessman and president of Business Leadership South Africa Saki Macozoma.
”These attacks will have serious implications for South African business in other countries. Standard Bank’s personnel has been threatened in Mozambique,” he told the Mail & Guardian. ”Doing business on the continent is going to be harder.”
Macozoma cited an Institute for Security Studies assessment of the situation, which states: ”What we have seen is what some have termed a perfect storm — the coming together of pent-up frustrations over poor service delivery, lack of leadership and the legacy of apartheid.”
”If you add into that witch’s brew the culture of violence and general criminality, you have a potent cocktail of explosive material,” said Macozoma.
The business community is growing deeply concerned about the impacts of the violence on the economy. The weeks of attacks on foreigners has seen the looting of 342 shops belonging to foreign nationals across the country, while 213 were burned down.
Businesses, particularly in the mining sector, have seen marked absenteeism, with staff afraid to go to work. DRD Gold’s operation near Primrose on the East Rand has been severely affected by the violence. The company, which employs a large number of foreign nationals, reported that as much as 60% of its staff did not come to work during the height of the violence last week.
But the attacks have spread across sectors. Last week the owner of a construction company in Benoni was reportedly killed when a mob burned down his house, accusing him of hiring foreigners.
While Macozoma does not believe that attacks on foreigners will deter foreign investment, he said that the violence ”certainly adds a new dimension to our long list of factors that disadvantage South Africa as a destination”.
According to Joe Schwenke, managing director of Business Partners, an investment company that provides equity, mentorship and property management services to small and medium enterprises, there are about 600 000 small, medium and micro-enterprises (SMMEs) in the formal sector in South Africa. In addition to this there are more than one million micro-enterprises operating in the informal sector, he said.
The enormity of the tragedy, said Schwenke, is not in the number of businesses that were destroyed, but rather the ”inhumanity” of the attackers.
Schwenke said it is unlikely that many of the business owners who lost everything had any kind of insurance. He said that most were eking out a living and could not afford the higher insurance premiums that come with operating in areas of increased risk.
”These people weren’t rich,” he said. ”They provided a service to the community who could not get goods and services in the area they lived.”
South Africa’s labour laws have been questioned since the attacks. It has been argued that their rigidity contributed to fewer South Africans being employed legitimately, opening the way for foreigners to enter the system and work for lower wages.
Macozoma is hesitant to agree.
”I do not think one could go that far. However, the impact of restrictive labour laws on South African citizens and the consequent filling of jobs with foreigners is a problem we must examine and hopefully resolve,” he said.
ANC deputy president Kgalema Motlanthe said last week that South Africans are envious of Zimbabweans, ”people with better basic education”, as well as Mozambicans, people ”who have skills”.
He argued that urban South Africans in particular are unwilling to work for poor wages. ”But people who come from neighbouring countries, who are desperate, will take any job,” he said. ”They are the ones who will take these [menial] jobs … and along with that they are able to survive.”
The tourism industry is also concerned about the effect the violence on its business. Sapa reported earlier this week that a day after pictures of a Mozambican being burned to death made international news Germany issued a travel advisory. The United States, Sweden and a number of other countries reportedly followed suit, causing dismay in the industry.
