A senior US embassy official has urged the South African government to address a number of mixed messages on the openness of the country to foreign investment so as to take advantage of a growing appetite among American companies for investments into the country and the region.
Speaking at an event hosted by The Economist Corporate Network, Minister Counsellor for Economic Affairs Laird Treiber said that, while the US government and American business continued to see “tremendous” opportunity to grow trade and investment relations with South Africa, the country needed to improve its “pitch” to companies showing an increasingly active interest in the country.
Bilateral trade in goods currently stood at $21-billion and was relatively balanced between the two countries.

US companies and individuals had also invested $35-billion into the country, the bulk of which – around $30-billion – was in the form of portfolio investments. However, an increasing number of American firms were currently looking to either make direct investments or expand existing operations.

“We think the potential is significant. We think we could double or even triple the [direct investment of $5-billion] in the next ten years,” Laird said, noting that the frequency of visits by leading executives had increased since the US-Africa Leaders Summit, which took place in Washington DC in August last year.

“In a lot of cases, the promise of Africa and the promise of South Africa are good enough to get CEOs on a plane. What we are telling the South African government is they need to be very concerned about giving them just as good a pitch when they get off the plane so that they then can conclude the deal.”

Investors were worried about a number of pieces of proposed legislation, which were sending “mixed messaging about how welcome foreign companies are in South Africa”.

He made specific reference to the Private Security Industry Regulation Amendment Bill, the Promotion and Protection of Investment Bill, as well as developments around expropriation, intellectual property and land reform.

“They all have some potentially disturbing clauses in terms of how a foreign investor’s rights will be treated.”

He said the US government was urging South Africa to send a more consistent message and to give deeper thought to “how those Bills and policy initiatives play in terms of convincing executives from America or other companies that South Africa is the right place to invest”.