If we cannot keep the lights or power on, in relation to mining and manufacturing, it certainly lowers the confidence of international companies to invest in various sectors of South African business – but this varies considerably from sector to sector.
Certainly, larger mining and manufacturing are seriously impacted, but in the medium to larger business sector where DLI M&A’s practice s focused, our experience is actually quite different.
Our clients – and I imagine they are representative of that broad spectrum of South Africa which is the engine room of our economy – has learned in true South African style to ‘make a plan’.
They have found power solutions that have resulted in them not being nearly as badly as impacted by load-shedding as they were three years ago.
We are finding that South African businesses in this range continue to present attractive targets to buyers and their business performance has continued to improve.
An important insight is also that international buyers are not being scared off by the Eskom issue it seems.
For instance, a recent snapshot of Europe's investments in South Africa was recently delivered by the EU Chamber of Commerce and Industry of Southern Africa, which found from a survey of more than 300 European companies that do not yet operate in South Africa, that SA is perceived as more business-friendly than nine other comparator countries in Asia and Africa, including Malaysia, Brazil, and China, according to the results of the survey.
One of the plans that foreign acquirers are cognisant of is the rapid issue of licences for renewable power generation and that large amounts of foreign investment are being made available to the tip of Africa for green energy.
My belief is that foreign investors are able to take a longer-term view and see beyond the current load-shedding which to us living here is such a burden.
Andrew Bahlmann is the chief executive: corporate and advisory, Deal Leaders International.
BUSINESS REPORT