A week ahead of President Cyril Ramaphosa’s state of the nation speech, the head of SA’s largest listed property group called on the government to speak less and do more to boost confidence in the economy, starting with the prosecution of those implicated by the Zondo commission.
“There has to be real, demonstrable action,” Growthpoint Properties CEO Norbert Sasse said in an interview at the company’s offices in Sandton. “We’ve seen part 1 and 2 of the Zondo report into state capture. What’s needed now is action taken against perpetrators, and for the government to act rather than keep making promises.”
Growthpoint, a real estate investment trust with portfolios across Africa, Australia, the UK and Eastern Europe, has staked its growth on expansion abroad after a decade of economic stagnation in SA even before the Covid-19 outbreak. It is seeing strong recoveries in Eastern European countries such as Poland and Romania, while it is also confident about its prospects in the UK.
The macroeconomic situation in SA was top of the list when Sasse, who assumed a new role focusing on Growthpoint’s overseas operations in 2018, was asked which risks kept him awake at night. “That’s the one thing that concerns me the most and how do we as a country arrest the trend.”
MD Estienne de Klerk runs the company’s R70bn domestic portfolio, which includes a 50% stake in the V&A Waterfront in Cape Town.
Sasse was talking a day after acting chief justice Raymond Zondo, in his second report into state capture, detailed industrial-scale corruption during the presidency of Jacob Zuma.
On the same day, Eskom announced a new round of power cuts, highlighting the infrastructural weaknesses that Ramaphosa has not been able to fix since taking office in 2018.
The CEO said that while there had been international investment in SA, this tended to be due to foreigners grabbing assets that were extremely cheap after the Covid-induced collapses in valuations.
Many of the deals were motivated by the need to use SA as a springboard to the rest of the continent rather than confidence in its long-term prospects.
Ramaphosa is due to deliver his state of the nation address on February 10, and analysts will be on the lookout for measures to boost the economy and provide support for the poor.
“What is needed is a positive business environment along with opportunities, otherwise businesses will take their investments elsewhere,” Sasse said.
He said the government needs to sort out state-owned enterprises, Eskom being one of those causing the most operational challenges.
“Load-shedding comes with huge disruption costs and operational complexities that businesses deal with behind the scenes,” he said. At the V&A Waterfront, 44 generators kick in during load-shedding.
Like other business, and residents, Sasse also bemoaned the dysfunctional state of SA’s local authorities. Ratepayers are saddled with higher rates and taxes while services deteriorate, and in some cases are non-existent.
“All we ask is for the government to make it easy for businesses to operate. After all, we pay for these services.”
After a decade of talking about a “double whammy” of paying more for less, now there is a “triple whammy” for businesses: they have to do it themselves, including picking up rubbish and reading meters.
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