Pretoria looks to cast off economic shackles: Businessmen believe a boom beckons despite threats of right-wing electoral sabotage
Wednesday 23 February 1994
Think again. Mangosuthu Buthelezi and Afrikaner Vol ksfront generals may be threatening to sabotage the elections; Zulus might be slaugh tering each other in Natal; right-wing fanatics might be planting bombs in rural ANC offices; but the economy has not looked healthier in years.
The Minister of Finance, Derek Keys, announced two weeks ago that he expected growth of 4 per cent or more this year. Inflation has dropped in two years from 16 per cent to less than 6 per cent. The Johannesburg stock exchange, boosted by unprecedented foreign interest, has been consistently bullish in recent weeks.
Tony O'Reilly, chairman of the Heinz Corporation, said, after announcing the purchase two weeks ago of South Africa's biggest newspaper business: 'We're at the dawn of a whole new era of opportunity here. We're optimistic about the future . . . South Africa could be the lucky country of the 21st century. It could approach the tiger economies of South-east Asia.'
Dr O'Reilly admitted, however, that there was an element of romance in his investment, perhaps built on the deep admiration he is known to feel for Nelson Mandela. Local businessmen, lacking the luxury of a vast foreign conglomerate to fall back on, ought to be more hard-nosed. Which is why it is surprising to discover that, while they are concerned about the right-wing threat, they do appear to share the perception that a boom beckons.
Rob Angell, Australian- born, is the chairman of Engen, a petrol company once owned by Mobil that holds its own nationally against Shell and BP. 'I agree with O'Reilly,' he said in an interview at his Cape Town office. 'In our business we reckon we're going to get 3 per cent growth this year and double or treble that in the next couple of years. Politically, it's mind- boggling how far we've gone in four years . . . we'll have potentially huge growth.'
Dave Brink, one of the biggest fish in South African business, echoed Mr Angell's optimism. Mr Brink is chairman of Sankorp Holdings, which controls some 3,000 companies in the mining, industrial and construction sectors, among many others.
'We've always known that this type of political uncertainty would continue . . . In katha and the right-wing whites do have the ability to disrupt a constructive and prosperous future. You do get the feeling that, short of civil war, these guys could be very intransigent in their areas and make them no-go for normal activities.'
That said, the thrust of Mr Brink's conversation was upbeat. Confident that the politics would come right in the end, that the 'hitches' would be overcome, he painted a bright picture of South Africa's economic future. 'If trends continue it augurs very well for our country. Big companies that sold here, for example, are coming back, like Honeywell, Kodak, IBM. I've just come back from the international economic forum in Davos and I'm most encouraged: there's great interest in South Africa by investors.'
His best-case scenario? 'High growth of about 6 to 7 per cent per annum. We'll need foreign investment because, on our own, we can only manage 3 or 4 per cent. It's important that we have responsible government, but I'm confident that we will. We know the ANC and we know we'll have some highly articulate, educated, civilised people in government. So with that, and so long as we don't have high levels of violence, 6 or 7 per cent growth is . . . feasible.'
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