Unrest has dealt a severe blow to investor confidence, the Durban Chamber of Commerce and Industry has warned as it engages with several companies seeking to divest from the province and possibly the country.
Mpume Langa, first vice-president of the chamber, told Business Day on Monday that the chamber is in discussions with anxious investors.
“They are talking disinvestment already from SA, and specifically from KwaZulu-Natal. We are hoping that we can be able to convince them otherwise,” she said.
“But with that being said, once you’ve seen the damage suffered, you can’t ignore that.... As a company or as a business, it means you are going to review where you investing and also try to mitigate risk differently.”
Langa said major foreign companies such as Toyota, Defy, LG and Massmart are among those that have invested in the province.
She said businesses in the province felt abandoned last week during the riots as the government’s response proved to be too little, too late for many business owners.
“We didn’t respond to this quickly enough, which means as a province, as a country, the faith that was there from foreign investment may be eroded,” Langa said. Durban’s business chamber says anxious investors are wary after government failed to protect them during unrest.
“The unfortunate part is that what has happened has happened. The damage it left behind is beyond the actual damage in the buildings and infrastructure. It also affects the perception of our country, the perception of KwaZulu-Natal as an investment province and Durban. Despite us having the two largest harbours in Africa, we also are impacted by the potential negative reputation [we now have globally].”
Langa said she hoped the government and the wider business community would be able to create some sense of security and rebuild some level of trust with these companies.
The first step to regaining trust was through engagements, though Langa said “it will take some time, because right now they are feeling very uncomfortable”.
Local investors such as the KwaZulu-Natal headquartered Mr Price and the Spar Group have also been affected. They possibly had a better grip of country-specific risks of operating in SA, but what had happened was “beyond disheartening”, said Langa.
“But for now, the sense of disinvesting is very much louder in the foreign companies vs the local companies.”
Discussions with the government to find solutions have been continuing since last week, Langa said. “The one, probably biggest, concern is are we ready should this threat arise again in the future? For now, it’s not clear that are.”
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