German corporate unease in South Africa | Africa | DW | 21.11.2014
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Africa

German corporate unease in South Africa

German Foreign Minister Frank-Walter Steinmeier has been visiting South Africa, Berlin's most important African partner. German companies in the country fear troubled times lie ahead.

The visit to South Africa by Foreign Minister Frank-Walter Steinmeier began with a surprise. When his plane landed at the Waterkloof military air base, there was no police escort waiting for him. This is a courtesy normally extended to every visiting politician. A breach of protocol! An act of negligence, or an indication that South Africa doesn't take Germany seriously any more as a partner, because China and the other BRICS nations (that's Brazil, Russia and India) appear more important?

Outwardly Frank-Walter Steinmeier seemed unperturbed. He had been determined to make the trip to Africa in spite of the diplomatic crises hovering over Jerusalem and Moscow and the negotiations over nuclear energy with Iran in Vienna. Visits to Kenya, DR Congo and Rwanda were abandoned, but South Africa remained on the foreign minister's itinerary.

South Africa is Germany's most important partner in Africa. "In the past, "Steinmeier said, "there were always other things that were more important than Germany's and Europe's relations to Africa. That attitude has simply got to change." That was why he said he taken the trouble to come to South Africa, especially at this particular time.

Deutschland Präsident des Markenverbands Franz-Peter Falke

Franz Peter Falke is concerned about the climate for foreign business in South Africa

Economic policies 'heading off in the wrong direction'

Addressing business leaders in Johannesburg, Steinmeier praised the historic ties between Germany and South Africa. Electrical giant Siemens had been in the region for 160 years. There were 600 German firms in South Africa employing some 90,000 people. Germany was South Africa's most important trading partner after China. Steinmeier also lauded South Africa as a "springboard" for German investors seeking deals elsewhere on the continent.

There was yet another breach of protocol. The premier of Gauteng province couldn't find the time to attend the meeting and so he sent a deputy. It would appear that there is not much respect for Germany these days in South Africa.

Employers' associations are expressing concern over the political turbulence in South Africa and have been complaining about an unfriendly climate for investors. The economic policies of President Jacob Zuma's government were heading off "in exactly the wrong direction" said a representative from SAFRI, a German business association in South Africa. It lists a total of seven obstacles to business, including a new immigration law which makes it difficult for skilled workers to obtain visas. Another worry is the safeguarding of investments. Germany has signed bilateral investment protection agreements with 39 African countries. South Africa pulled out of its agreement with Berlin a year ago. National legislation is supposed to replace this special accord, but it harbors considerable risks for foreign investors.

German stocking manufacturer Franz Peter Falke believes a strategic mistake is being made. "It's a very alarming sign," he said. Many companies would gladly use South Africa as a base from which they could conduct business with other parts of the continent. But at the moment they were "very concerned and have put investments on hold."

Falke has been in South Africa for 45 years. Under present conditions, he would probably have never set up a business in the country. "I would think very carefully about where I was investing, because there would be a number of other options," he said.

Südafrika Parlament in Cape Town

Political developments have been worrying German companies in South Africa

Civil society concerns

Political turbulence is also adding to the general feeling of unease. A week ago, scuffles and angry speeches in the South African parliament ended with police entering the chamber. An opposition deputy had accused President Zuma of being a thief and ignored a call to order by the speaker. Such incidents come as something of a shock in the twentieth year of South Africa's post-apartheid democracy said Lawson Naidoo, a civil society activist from the Council for the Advancement of the South African Constitution.

"Every investor is concerned about whether a country is a reliable, politically stable place to do business. I think we are at a crossroads. Armed police entering the hallowed chambers of parliament to throw out a deputy is a very worrying sight. We never thought we would witness such things in our democracy," he said.

However, Naidoo believes that South African democracy is still "robust" enough to defend the ideals of Nelson Mandela and Desmond Tutu. It is possible that industry and commerce are equally resilient enough to withstand the present political turbulence.

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