Policy Uncertainty Hampers Local Investment
Reshaping the political arena through the removal of President Jacob Zuma, and the associated stigma of corruption and looting of government coffers, will be a significant game-changer in attracting much-needed investment, particularly for the mining sector. This is according to Dr Mathews Phosa, former ANC treasurer and presidential hopeful.
“Such a step alone will release goodwill locally and globally from those who are serious investors in our economy,” he stated.
Phosa implored companies to increase their visibility and to actively participate in roadshows, to encourage foreign investor sentiment and “to show that we are serious to retain their investment, and in fact, that we want to see it increased”.
He noted that poor policy decisions reflected in current lacklustre investor appetite, particularly in the mining sector, and beseeched policymakers to “stop tinkering with sector charters” and rather to “negotiate charters that will satisfy stakeholders, but also create room for sizable growth”.
Phosa highlighted the non-consultative nature of the current policy process, and added that government should refrain from constantly “changing the rules of the game in the middle of the game”, as it created uncertainty and left investors unwilling to invest in the country. “No sector is more in need of long-term policy certainty than the mining sector,” he affirmed.
For the sector to succeed, there was a need to redefine the economic strategy, and to incentivise both the private sector and foreign investors, he said.
Moreover, it was important that government realise the need to inject expertise back into the public sector, by encouraging retired private-sector leaders to be “seconded back to government”.
In addition, it was vital for both industry and government to be sensitive to issues affecting investor sentiment, including that of illegal miners, who pay no tax or royalties.
“Mining companies struggle to acquire mining licences and associated rights, thus there is a great need for government to intervene by curbing the high level of illegal mining taking place, as it harms investor confidence.”
He explained that it takes time to get a mining right, especially going through the painful process of negotiating the red tape, followed by a lengthy waiting period for water and environmental impact assessment licences.
Further, there was a need to “appoint our very best minds to deregularise every form of bureaucracy from our statute books. Business and black business alike are being throttled by the high number of regulations,” he stated.