South Africa's current investment climate could explain a waning optimism in some quarters about the country's "new dawn", prof. Thuli Madonsela, law trust chair in social justice at Stellenbosch University, said on Tuesday.
"(Economic) data is not looking good. It frightened a lot of people to think government is not doing its job," she said at the i3 Summit 2019 at the Spier Estate near Stellenbosch.
"Investment is like an egg. There is a time when it is vesting and a time when it finally yields. A promise of a new dawn is not broken just because there is not an immediate yield."
She emphasised that, although both local and international investors are concerned about the yield they would get on their investment in SA, there should also be a focus on creating an inclusive economy which does not leave anyone behind.
Poverty line
"So, part of the difficulty we have with the 'new dawn' is that SA has the highest percentage of people living below the poverty line. Government has been trying to tackle this since 1994, but still only 1% of poor people are white and 64.2% of black African people are poor and unemployment at about 26.7%," said Madonsela.
"Therefore, as we go forward, we have to reflect on the fact that many South Africans are concerned about being hungry."
Madonsela believes there is a way to give investors a return on their investment as well as lifting people out of systemic poverty. If Ramaphosa continues to "walk the talk that no-one is above the law, investors will come", she said.
"Most people would say the next move in unfolding the new dawn depends on President Cyril Ramaphosa, but my parents taught me that if you want a particular outcome, the next move is always yours," said Madonsela.
"Yes, on the one hand we want an investment climate, but on the other hand there is the challenge of poverty and inequality, which in turn form part of the destabilisation of the investment environment."
Ethical business
Madonsela said business should try to create an eco-system where it continues to act ethically no matter what others do. For her this means not just doing business because it is business, but doing business because there is a purpose in what you are doing.
"Of course making money is important, but it helps to have a focus that transcends money. Be impact conscious of your actions and its consequences. We will not be able to achieve the new dawn if there is not ethical conduct from the cleaner to the president," said Madonsela.
"It is about building a new SA where it is important to be inclusive for all of us and within creating a sustainable environment."
Investments of all sizes
She said investments need not be big, but could involve investing in small villages – not just as a donor, but as a partner involved in the process of change and helping communities to lift themselves from poverty.
This kind of investment will also address investor concerns about unrest in townships by helping to address social aspects leading to the protests, in her view.
"Let us start thinking out of the box in order to create sustainable businesses and find a way to get to where you want to be despite the turbulence. We have to work together in SA and I believe we will make it. A flower that blooms in adversity is the most rare of all," she said.
"Rather start new businesses where big business can be co-owners to increase the cake."
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