21 July 2012
SWISS COMPANIES FACE CHALLENGES IN SOUTH AFRICA
Swiss investors believe they face major challenges for investing in South Africa. A survey conducted by the Swiss Federal Department of Economic Affairs’ State Secretariat for Economic Affairs (SECO) in May amongst Swiss companies that are active in South Africa, found that the crime rate is one of these challenges. Limited infrastructure, mostly in the field of electricity, which leads to power outages, is another challenge. The survey also identified red tape, an unfavourable tax regime and aspects of the black economic empowerment (BEE) policy as challenges. Companies are not happy when they train people in Switzerland and that is not counted in the BEE scoreboard. They do not like that they have to sell participation in their companies to South Africans. Rigid labour laws, which make it easier to hire people than to dismiss people, are another challenge. Swiss National Bank statistics show that a third of Swiss foreign direct investment into Africa is made into South Africa. Switzerland ranks as the seventh-largest foreign direct investor in SA. Last year the bulk of Swiss exports to South Africa consisted of machinery, at 32%, followed by pharmaceuticals at 23% and optical and medical equipment at 10%. South African exports to Switzerland mainly consist of precious metals (84%), metals (8%) and agricultural goods (4%).