The World Economic Forum in Davos, Switzerland. Picture: GETTY IMAGES/ BLOOMBERG/ JASON ALDEN
The World Economic Forum in Davos, Switzerland. Picture: GETTY IMAGES/ BLOOMBERG/ JASON ALDEN

Ahead of the World Economic Forum (WEF) annual meeting in Davos, Switzerland this week, finance minister Tito Mboweni said he was confident that the government delegation attending would present a strong investment case for SA. And he should be. At the highest levels, our government has become really good at telling a good story. Successive ministers — even the good guys who might not have actually believed it — have been doing this for years.

The problem has never been the telling of a good story. Rather, it’s the lack of a credible plan that international investors have seen right through. In fact, I am rather surprised that we have been able to keep the likes of Moody’s at bay for so long. Growth forecasts from the Treasury and the SA Reserve Bank have consistently been too optimistic. When an already low 1.4% Reserve Bank forecast for 2020 is cut to 1.2% not even a month into the year, there is clearly trouble.

SA faces the material challenge of attracting direct foreign investment while trying to keep our ship afloat. Unfortunately, the barbarians are at the gate and we need a plan; no more rhetoric. We need a plan that will start creating traction in the direction of economic recovery — something that the international market will start believing. This is the only way we will restore credibility and begin to change international investor perceptions.

These investors are all too aware that creaking large deeply indebted state-owned enterprises threaten to plunge our economy into further chaos. At least President Cyril Ramaphosa has succeeded in forcing SAA into a structured business rescue process. The problem is that there doesn’t seem to be any money to help keep the airline operating. In years gone by, the Treasury would have rubber-stamped guarantees or advanced bailouts. The cupboard looks bare.

It is Eskom, though, that is the great unknown. Mboweni said he would be frank about our challenges at Davos and at the UK-Africa Investment Summit in London.

It’s easy to be negative about the outlook for SA, more so given the negative sentiment from overseas. Every day we (and those international investors) are bombarded by negative statistics and news. These negative statistics represent our reality. I believe this is a great place to start.

Is Eskom a challenge? Absolutely. Are successful businesses still trading despite these challenges? Yes. Is the reliability of power a challenge in other developing markets? Definitely.

As business owners, we can’t simply sit around and hope for the Eskom challenges to go away soon. Concerns about issues such as reliable power supply, labour and policy uncertainty have existed for years. I recall international acquirers flagging certain of these in our engagements as far back as 2013. Let us rather educate the international market about our ability to trade despite these challenges.

This doesn’t sit on the shoulders of government only. As business stakeholders in this country of unlimited potential, we have an obligation to make ourselves more competitive internationally.

And we must accept that there may be short-term pain to trade through this phase and step up to the plate to play our part in rebuilding this economy.

We must realise that there are many very attractive investments opportunities in other developing economies, so if we don’t really make an effort to truly analyse and understand what is scaring people away and start mitigating these concerns, then we need live with the lack of new investors in our markets.

Let’s move beyond the stage-managed headline figures such as the R1.2-trillion committed at the president’s second Investment Conference in 2019. We — and foreign investors — know a lot of the capital being committed by business SA is not new investment. We need new, fresh capital. Increases in sustainable employment can only be driven by business (through growing the economy). These investments don’t have to be billions or tens of billions at a time. Believe me, the tranches of a few hundred million at a time add up very quickly.

Perhaps the subtle change in messaging telegraphed by Mboweni signals a new approach by government. We can only hope. Let’s embrace our challenges and focus on what’s next.

• Bahlmann is MD of Deal Leaders Africa