- Thursday, May 02, 2024
By: PTI
Investment ties between India and southern Africa are something investors look up to but there are challenges like visa issues and lack of finance, which they face while considering the the southernmost region of the African continent, an industry expert has said.
The remarks were made by Vishal Gautam at the CII-Exim Bank Regional Conclave on India-Southern Africa Growth Partnership hosted in Johannesburg on Tuesday (1).
“Partnership between India and Southern Africa is something which we live by and believe in,” said Gautam, managing director of Tega Industries, which has a footprint in the region.
“Two things which are exceptionally important in any sort of partnership is that you need to have an equality of participation and contribution,” Gautam added.
He highlighted the challenges that investors faced in the industry when considering Africa, particularly the issue of visas.
“Ease of business is something that is very important for any investor coming to the market, Gautam said as he explained how his own CEO, who owns 75 per cent of the company and has invested in South Africa, only received a three-month visa.
“On the one hand, you want more investors to come into southern Africa, but the accessibility to the market is quite difficult. If an investor is building a $100 million facility in the country, but can’t get a visa for more than three months, he’s probably going to take the money from someone else. So that’s something that has to be looked at first,” he said.
Robert Appelbaum, a senior partner at Webber Wentzel, who was the moderator for the session, said this issue had been raised annually for nearly 15 years now.
Earlier this year, Indian high commissioner to South Africa Jaideep Sarkar said that the issue was being discussed at high levels.
Citing a recent global business confidence index report, Gautam said the ease of doing business in South Africa had dropped from 41st in 2012 to 83rd in the world now, while India had gone from 131st position to being ranked 62nd in the world now.
Gautam said the availability of skilled manpower was also a challenge. “(Indian companies) should be given an opportunity to come and train local people.
Governments have to invest in these educational institutes where skilled manpower can be developed,” he said. Gautam also addressed the lack of finance in the region. He said 20 per cent of businesses in Southern Africa fail in the first two years because of unavailable financing options.
“The financing options are much more expensive in southern Africa than in the rest of the world”, Gautam said, adding that these issues needed to be addressed to help Indian businesses come into the southern African region.
Hen added said some of their projects in southern Africa presented sustainability issues because costs were too high to maintain them.
“We might have a good space in a site or in a country, but the corruption or the volatile situation in a country is just not making the mine viable,” he said. But Gautam remained positive about investing in the region despite these challenges.
“I am very positive about the people, the culture, and the traditions. I think India and South Africa are definitely natural allies. The concept of Ubuntu in Africa resonates very well with any Indian because humanity definitely takes precedence over profits, and that is something that is very true for the South African culture and the Indian ethos as well.”
Gautam compared the concept of Ubuntu, which translates roughly as ‘I am because you are’, to the principle of Vasudhaiva Kutumbakam which means ‘The World Is One Family’.
Keith Scott, CEO, Fraser Alexander, said that the mining industry in South Africa, Africa and globally is under significant threat.
“(Mining) has been recently considered an unacceptable land use in things like storage dam failures, like the one we had in South Africa about a month ago, which makes mining very unpopular and unpalatable, not only to the community and to society, but also to other key role players like investors, banks and insurers,” he said.
Muziwethu Mathema, chief economist at the Gauteng Growth and Development Agency, said India was a significant partner not only to South Africa but also to Gauteng province, which is the country’s economic and financial hub.
“Partnerships in the mining, beneficiation and allied services are quite significant for us in Gauteng because mining is a very significant industry. Although mining is only one per cent of the economy of Gauteng, it punches significantly above its weight, contributing close to 12 per cent of exports,” Mathema said.
