Ramaphosa denies there is a hostile business environment in South Africa

 ·30 Apr 2024

The Presidency has come out swinging in hopes of dispelling speculation that BHP Billiton’s proposed takeover of Anglo American, excluding South African assets, shows reluctance to invest in the country due to the ANC government’s economic policies.

“Some analysts and sections of the media have sought to portray this market activity as a vote of no confidence on South Africa,” said Presidency spokesperson, Vincent Magwenya, in a media briefing on 29 April.

“The Presidency rejects the notion that a commercial approach by BHP Billiton equals a hostile environment for investors,” he added.

The spokesperson said that through partnerships with the private sector, “priority areas…. undermining investor and societal confidence” are “in the process of being resolved.”

Brief background

On 24 April 2024, diamond, Platinum Group Metals (PGM) and iron ore mining company Anglo American received a $42.6 billion unsolicited all-share merger proposal from BHP.

The bid required the former to complete two separate demergers of its shareholding in Anglo American Platinum Limited and Kumba Iron Ore Limited to Anglo American shareholders.

Such a merger was considered the biggest shakeup in the mining industry in over a decade, with critics saying that BHP’s bid to spin off Anglo America’s South African assets as part of a takeover proposal is an indictment that “the economic policies of the ANC government have undermined investor confidence in the country.”

However, the Anglo American board said that the proposal significantly undervalued Anglo American and its future prospects.

Presidency response

Magwenya refuted claims that excluding South African assets in the merger deal was an indictment on policies which have spooked investors.

He said that the issues that undermine investor and societal confidence—namely load shedding, the challenges in the freight logistics sector, as well as crime and corruption—are “being resolved with the participation and partnership of [private] business.”

“While much still needs to be achieved to turn the tide around completely, the significant steps taken to rebuild credible institutions have begun to bear fruit and set the stage for further progress,” said Magwenya.

“This partnership [between the public and private sector] should reassure both local and foreign investors that considerable resources and expertise are being leveraged in government and in the private sector to curtail crime, continue improving the functionality of our ports and enable an investor and societal environment that fosters inclusive economic growth and prosperity,” added the spokesperson.

Magwenya pointed towards the South African Investment Conference as an indicator of investor confidence, which, over five years, has seen R1.5 trillion in investment pledges.

He said that this serves as an indicator of investment appetite in South Africa.

“President Ramaphosa finds it satisfying that both domestic and international investors continue to demonstrate confidence towards South Africa through their continued investments as evidenced in the last few years and in exceeding the investment targets set at the beginning of the term,” said Magwenya.

Read: Foreign investors are still keen on South Africa – here’s why

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