BLSA CEO: What makes South Africa an attractive investment destination

South Africa stands at a crossroads as it grapples with economic challenges while trying to attract investment to fuel growth and development. In a recent interview with CNBC Africa, Busisiwe Mavuso, the Chief Executive Officer of Business Leadership South Africa, shed light on the value proposition the country offers to investors. The conversation focused on the opportunities and obstacles that South Africa faces in positioning itself as an attractive destination for investment. Mavuso highlighted the demographic advantage that Africa holds, being one of the youngest continents with a growing population of 1.4 billion people. This demographic potential presents a significant opportunity for businesses and investors globally. However, she cautioned that South Africa is currently facing several challenges that may hinder its position as a gateway to the African continent. One of the pressing issues discussed was the energy crisis and its impact on the economy. With the recent stage 6 load shedding, South Africa experienced a massive financial loss estimated at 15 billion rands in 2022. The dysfunctionality of key infrastructure such as Transnet has also led to significant revenue losses for sectors like the minerals industry. The inability to efficiently move goods to markets due to logistical challenges has further hampered the country's export-led growth ambitions. The dwindling business sentiment and plummeting business confidence in South Africa have raised concerns among CEOs and investors. Many companies are diversifying their operations and looking for opportunities outside the country. The slow pace of implementation of reforms and commitments has added to the frustration and uncertainty within the business community. Despite the challenges, Mavuso emphasized the importance of collaboration between government and the private sector to drive socio-economic transformation. She noted a positive shift towards a pro-business ideological stance within the government, acknowledging the need for business partnerships and investments in addressing the country's issues. However, the pace of implementation remains a critical issue that needs to be addressed for meaningful progress. Looking ahead, Mavuso outlined the need for focused implementation of key reforms and basic infrastructure improvements to create a conducive environment for businesses to thrive. She highlighted the importance of fixing the network industries, particularly energy, logistics, and water, to support economic activities and investments in the country. In discussing potential solutions, the conversation touched on the idea of intensive private sector participation in critical industries. Mavuso suggested opening up sectors like energy, logistics, and telecoms for private sector involvement, citing successful examples of private-run entities within these industries. By allowing for increased private sector participation, South Africa could potentially enhance efficiency and competitiveness in key sectors. As South Africa navigates its economic challenges and seeks to attract investment, the focus on collaboration, implementation of reforms, and private sector participation emerges as crucial elements in driving sustainable growth and development. The road ahead may be challenging, but with the right strategies and collective efforts, South Africa has the potential to regain its position as a sought-after investment destination in Africa.