I no longer believe that South Africa is a land of opportunity: Magda Wierzycka

While South Africa has traditionally been seen as a country that offers opportunities to businesses and individuals who are willing to ‘stick it out’, the scenario has changed over the last five years, says Sygnia executive chairman Magda Wierzycka.

Speaking during a Brenthurst webinar on Thursday (29 July), Wierzycka said that while international markets are currently thriving, South Africa has fallen behind.

“Everything that I am seeing around me, in the developed markets in particular, is thriving. There is plenty of money around – quantitative easing and money printing has helped.

“There are plenty of investment opportunities and there is no shortage of interesting investments. Hence, I no longer believe that South Africa is a land of opportunity, which I think is very sad.”

Wierzycka also pointed to the recent violence and unrest seen in Gauteng and KwaZulu-Natal, which she said will have a long-term impact on the fiscus.

“All this excess money that we had that could have been spent on things like the police force, infrastructure, or job creation, now has to be deployed to fix this R50 billion loss associated with the violence.”

Vaccines

Another area where South Africa has fallen behind, compared to developed countries, is its Covid-19 vaccination programme.

Wierzycka said that vaccines are key to the reopening of economies, citing recent trips to London, Spain and Greece where relatively few lockdown restrictions are in place.

She said that while South Africa has ‘pulled a rabbit out of a hat’ in the number of vaccines it has been able to acquire, the country still only has 12% of its population vaccinated. “Unless the population is fully vaccinated, the travel corridors are not going to open to South Africa,” she said.

“No one has South Africa on their wishlist or priority list in terms of opening their borders.”

Wierzycka said that this is especially damaging to a country that relies heavily on services and tourism.

She added that the tourism sector is unlikely to recover anytime soon, which will have a number of secondary effects such as a lack of growth and a lack of investment opportunities.

Wierzycka said that the post-pandemic world also appears to have a much heavier focus on nationalism with the US and countries in the EU focusing on buying and manufacturing products locally.

“So there isn’t a very charitable view of other markets. It is every man for himself. This will manifest itself in the procurement of vaccines, job creation and investment. Governments will direct investment to domestic opportunities rather than offshore opportunities.

“Really the only thing South Africa has going for it is a little commodities boom  – which I suspect is coming to a very rapid end – and high-interest rates.

“Take that way and I think most of the foreign investments will dry up,” Wierzycka said.


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I no longer believe that South Africa is a land of opportunity: Magda Wierzycka