S.Africa strives to strike a balance between FDIs & Labour - CNBC Africa

S.Africa strives to strike a balance between FDIs & Labour


by This article is sponsored by the KZN Department of Economic Development. 0

Striking a balance between investment attraction and industrial relations in South Africa.

CNBC Africa held a special economic roundtable at Durban, KwaZulu-Natal, on striking a balance between investment attraction and industrial relations for South Africa.

On the issue of competing for investor capital in the African continent, MEC Michael Mabuyakhulu, Chairperson of the Economic Council and Convenor, said it was true that competition would be inevitable.

Mabuyakhulu substantiated that the highest beneficiaries of foreign direct investment (FDI) in Africa is South Africa at 7.4 billion dollars, followed by Nigeria at 7.3 billion dollars and Ghana at 4.4 billion dollars.

“South Africa’s economy is a highly diversified economy and we are seeing that the bulk of that investment is taking place in a number of sectors in the economy whereas in other countries it tends to be driven solely and primarily by mineral resources,” he said.

Mabuyakhulu said it is important for South Africa, as a country facing high unemployment rates at 36 per cent, to respond to these opportunities for expansion or the country will be found “lagging behind”.

He added that there should not be an over reliance on FDIs but to also focus on the need to mobilise domestic expansion growth.

(WATCH VIDEO: Striking a balance between investment attraction & industrial relations

Chris Gina, Convenor of Labour, agrees that Small Micro Medium Enterprises (SMME’s) are a platform to easily employ labour that increases employment, however, he said, “The first thing we require from small businesses is not to duck the laws of the country.”

Gina said that a trend has been identified where big businesses are closing down and breaking the company into small businesses because they want to “duck” the compliance laws.

He added that they also expect small businesses to train and not exploit employees. “We normally see high levels of exploitation of women in small businesses because those women do not have the tools to defend themselves.”

Sthembiso Madlala, Convenor of Civil Society, said this is a “new phenomenon” driven by “some investors” who came into South Africa because they are aware of high unemployment rates.

Moses Tembe, Convenor for Business, said as an employer of a few thousand people, his management had arrived at a figure that they have decided is a “fair living wage” which is much higher than what has been prescribed by the Labour Department.

“You really have to develop the reservoir of being a capitalist with a conscience who will say yes it’s good to have a 40 to 50 per cent return but you could live with a 20 per cent return and it works,” said Tembe.

Steven Friedman, Director of the Centre for Study of Democracy, said the concept of a “capitalist with a conscience” is not what it is all about. “We live in an audit society and these issues are regulated, it’s not about conscience. It’s about what obligations do we owe to people and what rights they enjoy.”