Nedbank CEO Mike Brown said South Africa’s collapsing infrastructure prevents companies from investing in South Africa.
Brown shared this information during News24’s “On the Record” summit, where experts discussed the country’s biggest issues.
He said large corporate customers need South Africa’s infrastructure to work before investing in new mines, factories, and other businesses.
“So much of our economic infrastructure, including energy and logistics, are under the control of state-owned monopolies, and it does not work,” he said.
When there is insufficient energy, or the railway system does not work, companies cannot invest in new projects.
He said Nedbank was doing an international investment roadshow in March and April this year and was faced with a tough question.
“We sat with a United States pension fund investing in assets worldwide. Their one-liner was, ‘How can we invest in a country which can’t keep its lights on?’” Brown said.
To attract new investment, South Africa must fix the infrastructure side of the economy, like electricity and logistics.
“Unless we do that, there will not be large-scale investment. Nobody will put money into the country without it,” he said.
He highlighted that corporate customers spend money to keep their existing businesses competitive. However, there is very little investment in new projects.
There is one exception – energy. “We are seeing a tsunami of energy investments,” Brown said.
South Africa became irrelevant to international investors.
Brown’s views echo Sygnia founder and CEO Magda Wierzycka, who said South Africa has become irrelevant among international investors.
Wierzycka said South Africans could no longer fool themselves by thinking they were not living in a failed state.
She said citizens are forced to accept an incompetent government actively sabotaging businesses and destroying jobs.
“I was at a function with international investment professionals, and we spoke about South Africa. They told me South Africa was irrelevant,” she said.
“It has become so small that it does not even feature on their radar screens, and they moved on to another topic.”
Wierzycka said municipalities, which form the backbone of South Africa’s government, cannot provide basic services like water and electricity.
She said 45% of water in South Africa is lost within municipal water systems due to poor infrastructure, poor maintenance, and illegal connections.