South Africa

Three big companies dump South Africa

So far this year, three major international companies – Shell, Rolex, and BNP Paribas – have announced they will end most or all of their operations in South Africa.

The three global companies’ decisions to part ways with South Africa renewed concerns about the country’s economic environment and business policies.

The operating environment for businesses in South Africa has severely declined over the past decade.

The government has been unable to provide basic services, and its foreign policy has undermined relations with some of its largest trading partners. 

This deterioration has resulted in businesses losing confidence in the economy and less likely to invest locally or operate in South Africa. 

Nedbank’s Capital Expenditure Project Listing, released earlier this year, showed a sharp decline in the value and number of new investment projects by companies in South Africa. 

The value of new projects announced in 2023 was R148.8 billion, down from R259.9 billion in 2022 and R392.7 billion in 2021.

“This is shocking. It will have a tremendous impact on the economy,” Nedbank economist Crystal Huntley said

“What it reflects is the context of a very weak domestic economy. What is being seen is the effect of struggles experienced structurally within the economy.”

These struggles have resulted in declining confidence from businesses and households in the South African economy, making them hesitant to invest locally. 

“You are going to see businesses step back and be unwilling to invest in South Africa’s weak economy.”

This is already occurring, with three huge international companies choosing to significantly reduce their operations in South Africa or leave the country entirely. 


At the beginning of May, Shell announced that it intends to exit shareholdings in its South African retail, transport and refining operations after operating here since 1902. 

It was initially reported that this was due to a disagreement between the Anglo-Dutch oil giant and its local BEE shareholder. 

However, the company made clear that while there was a disagreement, it wanted to exit its local operations because of a review of its global operations. 

Shell has undergone a cost-cutting exercise, during which all of its operations were reviewed to determine whether it was beneficial for the company to remain invested. 

In the case of its South African operations, the company deemed them to be non-core and decided to find a way to dispose of its shareholding. 

Shell currently has around 600 forecourts in South Africa, and its announced exit has resulted in interest from Middle East oil giants Adnoc and Aramco in its local assets. 

South African oil producer Sasol has also announced its interest in Shell’s South African business. 

Along with BP, Shell operates the Sapref refinery in Durban which is the largest in the country and produced 180,000 barrels a day before operations were halted in 2022 ahead of an anticipated sale. 

Sapref has since been bought by the government-run Central Energy Fund. 


After 76 years of operating in South Africa, Rolex announced last month that it would be closing its office in Sandton. 

The luxury watchmaker cited a change in “local markets and conjuncture” as a reason for closing its South African office. 

Rolex said it would remain active in the region through its retail network, meaning that customers could still purchase and service watches from the company. 

The company gave no further reasons for closing its office, but some speculate it is due to a decline in the luxury watch market in South Africa. 

Other reasons may include general economic conditions that make running a physical office in the country too difficult and unnecessarily expensive for Rolex. 

BNP Paribas 

French banking giant BNP Paribas also announced its plan to exit the South African market in May as part of its new strategic plan. 

The largest bank in Europe has been operating in South Africa since 2012, offering corporate and investment banking services. 

While the bank did not have a licence to operate as a fully-fledged bank in the traditional sense, it does have significant operations in South Africa alongside other global banking giants such as Goldman Sachs, Citigroup, and JP Morgan. 

However, since 2022, BNP has been undergoing a process of limiting its operations in Africa to focus on its business in Asia and Europe, which are far more profitable. 

“In Africa, we have adopted a targeted strategy and continue to strengthen our position where the characteristics of the market correspond well to our strengths and the desired conditions in terms of development and risk control,” it said at the time. 

South Africa’s banking regulator, the Prudential Authority, said in a statement that BNP Paribas’ ability to conduct the business of a bank via branch was withdrawn on 8 March already. 

S&P Global said that this could be a significant boost for African banks and increase competition between local players on the continent. 

“French-owned African subsidiaries are often unable to target certain segments of the economy due to their parent bank’s conservative risk appetite, and they follow more stringent loan classification and provisioning policies than locally-owned banks,” it said. 


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