Editor’s Desk
Beware capital is coward
Three words to remember this week as you build your businesses: Capital is coward. A good week to recall these words as South Africa counted the blessings of its annual investment conference in Johannesburg – revived after two years of lockdown.
The pledges were coming in thick-and-fast for major investments in South Africa, still seen as a connected and industrialized springboard into the rest of the continent.
It seems – pandemic, or no pandemic – a political promise is close to fruition. In 2018, President Cyril Ramaphosa promised to bring in R1.2 trillion in investment to boost growth and create jobs in a country where nearly half of the population has nothing to do.
Reports say President Ramaphosa is a mere 5% short of the promised target that could mean a major boost for confidence in the economy. For entrepreneurs, this can only bode well as they navigate an economy under pressure and try to secure capital out there in a competitive world.
There are pools of capital – pent up by the uncertainty of the pandemic – in pension funds and investment portfolios around the world. It is up to entrepreneurs to see how they can make money out of the investment flowing in. As the investment conference got underway, there was an interesting suggestion this week by veteran analyst David Shapiro – who has featured a couple of times in Billionaire Tomorrow. He said maybe South Africa should put on overalls and fix the country instead of a suit and tie for a conference.
Maybe he has a point. South Africa’s electricity shortage is hurting business by the day, its roads and infrastructure are crumbling. Crime is spreading fear and uncertainty, the schools need fixing, as do the hospitals. Maybe South Africa should fix up all of the above and then it would make the country more attractive to investors so that wouldn’t have to fight so hard for investment.
Remember: capital is coward. Any risk, or doubt, or uncertainty, and you can forget it. President Ramaphosa has been criticized for being too slow in his reforms for the economy. Let’s be fair, he faces a big job; the president before him was a disaster who set the economy back a decade.
The president could make more sweeping changes, cut the bureaucracy and make it easier to do business – no matter who you are. Sounds simple, just ask Rwanda a country that has already shown how it can be done.
