Open any South African newspaper or visit any South African news website and things do not look good. On every page, there is something depressing and with an initial glance, one would assume things are getting worse.
But, are things getting worse in South Africa?
The answer is “yes” but it will not stay that way.
The Guptavisation of South Africa
Perhaps the most prominent name in South Africa today is that of Gupta. The Gupta’s are a family who arrived in SA in the late 1990’s with nothing, made friends in the right places and rose to become one of the most influential business families in the country. For many years their business efforts and now exposed, alleged dodgy dealings were of little concern, until a Gupta owned Jet landed at the Waterkloof airbase in Pretoria full of guests for a wedding, a wedding too that has since come under the spotlight funded by corrupt, government money.
A flurry of media activity around the jet soon began to unearth the shadier side of the Guptas, President Jacob Zuma and a gravy train of ANC Politicians and heads of state owned enterprises. In recent weeks the so-called #GuptaLeaks emails have shed further light on the shady dealings of the Gupta Family and their associates of influence in Government and cast a shadow over the once valiant, now deemed corrupt, ANC.
The political space in SA is alive and a young democracy is showing it can work. However, weak leadership in the ruling party and mounting allegations of corruption are putting the democracy to the test. Recent downgrades in the South African currency, the Rand, are in many ways a result of the now political infighting and the results of poor decisions, lack of investment partly due to corruption and the lack growth that stem from this.
President Jacob Zuma is considered to be at the very heart of problems South Africa is facing, and his party, the ANC, is divided over his role as president and this too is beginning cause challenges in the country. There are calls for Zuma to fall with a growing list of over 700 accusations of fraud that the president and his cronies are fighting to keep out of court to enable corrupt gains to continue, and yet time and time again the “Teflon President” still remains in his seat.
Things will get better
Despite the political turmoil and the ever-deepening piles of emails and documents that sway the argument that corruption is rife and state capture has happened, there is hope. This hope is what makes South Africa the country it is and it is this hope that any investor in SA needs to appreciate.
In the middle of the 1980’s the escape out of Apartheid seemed impossible; in 1994, the dream came true. The people rose up and made South Africa new, or as new as they could. This fighting spirit remains in South Africa today, 2019 sees a general election and recent politics and the truth coming out about corruption are reasons for a change in SA.
The ANC, as it stands at this moment, has little chance of securing a majority and should corruption charges against many ANC Members be proven people should think twice about their vote. The rhetoric from other parties is becoming a powerful “don’t vote ANC” with both the DA, the official opposition and EFF, a breakaway from the ANC each gaining significant ground in recent municipal elections with major cities changing hands. These changes have unearthed appalling levels of mismanagement that are being put right, this is something any investor must acknowledge as a sign of things to come.
The view of SA for investors is clouded by smoke from the political situation. However, SA is a place where long term investment will yield good returns and shrewd investors will reap a just return with the right financial, social and humanitarian strategy behind their investment. The Rand, despite plummeting in recent months due to crazy political decisions should not be the deciding factor on investment; it is in fact fairly stable despite its value. One needs to look at the stability of the country outside the world of politics and that there is a nation hungry for jobs and a better country.
A change of government may not necessarily be the panacea investors are seeking to the problems in SA, nor is it something that can be assured of, and one needs to consider much more. The corruption in South Africa is now known to exist and people are aware of it, this will be further addressed as the democracy matures and those at the heart of it are ousted. Right now, is a time where clever money will receive a long-term reward while some of the problems are being fixed, now is the time to get a head start and have some patience.
Structures need to be put in place, the power utility, for example, has to turn itself around along with good governance and either investment or privatisation. South Africa cannot survive at all without this and many other current State Owned Entities that have been milked through corrupt dealings. There comes a point, and many will say it is coming soon, where the people of South Africa will have to rise up, bring the change they want and grow the country again as they did in 1994. Any investment will surely understand the importance of that.
Many lessons have been learnt in the last twenty plus years, these will be used to move forward and that makes South Africa a place that will be hungry for investment especially from investors with a heart for change not just profit.