My business is based in South Africa and after the week we’ve just had in the country with Xenophobic attacks, kidnapping, rape and murder of women and children a discussion needs to be had. South Africa is praised as one of the most developed countries in Africa. This is true. South African infrastructure is almost unmatched on the continent. But does that make it a great place to do business. This is my opinion, and I’ve been contemplating on this for a few days now.
SA is great for foreign investors, as long as they’re not black. Yes i said it!! From my observation this has been the only country i have experienced in Africa where the white minority still controls key financial decisions and institutions. This is also the only African country I’ve experienced that still openly favors the white minority. It’s shocking to know that in 2019 there is an African country where white minority still gets better access to jobs and higher pay for the same position than blacks from the country.
If the system doesn’t benefit the local black majority how can it benefit black foreign entrepreneurs? Now let me walk you through setting up a business in SA. So step one, getting the necessary registrations and licensing done. Registering a business in SA is easy, affordable and simple. You can get the whole process done online in less than 30 minutes. I loved it! To kick off operations and get a bank account etc, you need to have a business permit. Requirements for a business permit include an investment of R 5 million. Yikes i know! But this is subject to review which i guess means it’s not set in stone.
Getting the permit is another headache because of corruption in Home Affairs. It’s near impossible to go there upfront with the required documents and get a permit. 5 million Rands is a pretty penny so i doubt and medium scale businesses will be able to set up shop. You could decide to run your business from a distance and only enter as a non resident. This puts your account under a lot of scrutiny with every transaction no matter how small needing you to send an email to the bank informing them why you’re receiving money into the account. (It sounds bizarre but i went through this!)
With high unemployment, getting staff and setting up interviews won’t be too hard. In fact you are most likely going to get hundreds of emails. Word of advice on hiring, have a trial period with whoever you pick. Work culture is very different in SA especially among the younger, recent graduates. I’ll leave it at that.
South Africa is a big and diverse market which means it’s not very easy to conquer. There are companies in different industries that have set up for generations and enjoy something close to a monopoly. Support for products created by an outsider also isn’t something immediately embraced by the local market. It might be best to put a lot of thought in your marketing strategy. The Afro-phobic attacks on foreign owned shops don’t breed much confidence either.
I’m not writing this to bash SA but to give a very honest opinion of how i have found the business environment to be as an African business owner. This i suspect is the same in a lot of African countries. When African governments think of investors, the image that usually comes to mind is white males from the West. Conditions are honestly tailor-made just for them and made to benefit them. When an African migrates to another African country to start a business venture they are not viewed as investors even though the venture will also be creating jobs and contributing to the economy. They are seen as just economic refugees while European economic refugees are seen as expats.
To be honest, just because someone moved to your country to start and grow a business because they’re country doesn’t have the right conditions doesn’t make them any less of an investor. When will we stop looking at each other with spite and start seeing each other as partners? Wouldn’t it make more sense for locals to join hands with entrepreneurs from other African countries in building these businesses?
I don’t see Intra – African trade as just being about moving goods seamlessly across boarders. It should also be about Africans trading entrepreneurship skills and vision seamlessly across borders.
Starting a medium sized business in SA as a foreign African is a steep mountain to climb. Honestly one that i’m not willing to keep climbing. The cons for me out way the pros, the latter being the infrastructure. Maybe when Ubuntu is rediscovered, data falls and white monopoly is dealt with we can revisit this!
What are your thoughts on this? What have your experiences been? Let’s make this a discussion.