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South Africa has become irrelevant

Magda Wierzycka

Sygnia CEO Magda Wierzycka said South Africa has become irrelevant regarding global discussions of where to invest.

Wierzycka is well known as the outspoken founder and chief executive of the Cape Town-based financial services group Sygnia.

In addition to running Sygnia in South Africa, Wierzycka has established Braavos Investment Advisers, an early to growth-stage venture capital firm based in London.

Braavos Investment Advisers gives her a global view of the investment market, including where money flows and what global trends are emerging.

She also attends and speaks at many global investment and economic forums, giving her access to world leaders in business and politics.

This gives her a wide perspective of what is happening in the global investment world and what chief investment officers look at.

In an interview with Biznews, Wierzycka doubled down on her comments last year that South Africa is becoming increasingly irrelevant globally.

“South Africa has become irrelevant in terms of global discussions on where to invest,” Wierzycka said.

She said in 2023, South Africa was plagued by load-shedding, poor economic growth, and a lack of investment in innovation and entrepreneurship.

Despite South Africa’s improved electricity supply, which lifted sentiment, it remains irrelevant to global investors.

She said at a recent investment summit in Miami, there was a panel discussion with the CEOs and CIOs of the world’s largest asset managers.

“One of the participants started to talk about BRICS. He said these nations could not be ignored as investment destinations,” she said.

“He mentioned Brazil, Russia, India, and China – and then he stopped. I realised he thought the ‘S’ in BRICS was a plural and not a country.”

Wierzycka said that sums up whether South Africa is a topic of discussion in global investment circles. “We are only a plural letter,” she said.

South Africa is not politically neutral

The Sygnia CEO added that South Africa’s political affiliations are not endearing itself to global investors.

“It is one thing to say we are politically neutral regarding global politics. However, this is not the case. It is not how it is perceived or what we are doing,” she said.

“In the eyes of international investors, we are aligning ourselves with the BRIC nations. We are not criticising Russia. We are aligned with Gaza against Israel.”

This alignment affects the perception of international investors looking at emerging market investments.

“I am aware of two large United States investment institutions which have decided not to invest in South Africa based on our political stance,” she said.

To grow South Africa’s economy, it must attract foreign investors. However, the country’s political alliances alienate the biggest investors.

It aligns with the warning from many experts, including Oscar van Heerden, a University of Johannesburg Professor of African Diplomacy and Leadership.

He argued that South Africa would face an economic backlash for taking Israel to the International Court of Justice (ICJ).

Countries that opposed South Africa’s ICJ case include the United States and Germany, which conduct around R685 billion in trade with South Africa.

“There are going to be repercussions. They may not be immediate, but there will be a backlash because we have decided to embarrass the US, the UK, Germany and Israel,” he said.

Economist Jannie Rossouw said the mere possibility that South Africa could lose some trade with the US and Germany would deter investors.

“It is becoming increasingly clear that South Africa is aligning itself with more socialist countries such as Russia. This trend can scare off investors in the Western world,” he said.

This was echoed by University of Pretoria Professor Koos Malan, who said South Africa’s pursuit of the case will harm the country’s international standing.

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