"South Africa is open for business!"
The Embassy hosted together with the South African department of Trade and Industry on April 22nd a seminar on incentives and regulations concerning business and investment opportunities in South Africa. The participants on the residence consisted of about thirty leaders from Swedish companies active in South Africa, speakers from different parts of the department, and the participants were led by Trade Secretary Olov Hemström from Business Sweden.
The seminar was opened by Ambassador Anders Hagelberg, who stressed the importance of good relations between Sweden and South Africa, and put the seminar in the context of the approaching Binational Commission. Hemström laid the tone for the discussions by highlighting everyone's common interest in a good investment environment for trade and development.
Annelize van der Merwe, who heads the Trade and Industry Department's work within green investments, also represented the departmental management at the seminar. Van der Merwe explained initially that the South African government's focus in industrial policy is to achieve economic transformation (after the extreme bias created by the apartheid system), and that this work is done through a combination of carrots and sticks.
Van der Merwe emphasized that the South African government is really keen on foreign direct investment and want to signal that the country is "open for business". She said that there is a strong South African interest in creating and maintaining partnerships with Swedish companies and van der Merwe emphasized also on South Africa's role within infrastructure as an entry point to the continent at large. To further enhance the attractiveness of the South African market has a toolbox of targeted incentives developed. The incentives are linked to investments in government-identified priority sectors and take the form of grants or tax deductions. Among other things, Van der Merwe informed about the green economy and an energy program with a focus on the expansion of renewable energy in the country. The energy program has helped to make South Africa the world's third largest recipient of investment in renewable energy.
Frameworks and regulations
Liso Steto attended to speak about the rules surrounding the Broad-Based Black Economic Empowerment (B-BBEE), an act mainly linked to government procurement introduced in the late nineties to increase the pace of economic transformation. Steto pointed at the importance of the Act by stressing that "the lack of participation makes the economy disabled. B-BBEE is a prerequisite to open South Africa's full economic potential." From May 1st, new rules apply for the B-BBEE, which has increased the emphasis on spreading ownership to historically disadvantaged population groups. In a discussion that followed, reasoning were made whether it was better for Swedish companies to act through the high B-BBEE-ranked retailer in the South African market, or being present with production in the country.
The Embassy’s comment
The companies expressed that they viewed the seminar as very fruitful. The Embassy intends to continue to facilitating this kind of meetings between representatives of the Swedish business community and the South African administration.