Land and labour threaten investor confidence

National policy uncertainty around issues like land and labour are a concern for the Western Cape government as they could have a serious impact on investor confidence in the province. Minister of economic opportunities, Beverley Schäfer, told FTW that the growth outlook for the South African economy as a whole was constrained and the ongoing policy uncertainty around issues like land and labour was not helping. And, with an election coming up this year, this uncertainty is expected to increase along with populist statements. “We also often see an increase in civil unrest in the run-up to elections. All of this can impact business and investor confidence.” According to Schäfer, whilst many of the
challenges being faced in the province are national concerns and often out of the hands of the local authorities, they do  all trickle down to the provincial economy – a situation the Western Cape can ill afford. “2018 was a remarkably difficult year for the province as a result of the drought,” she said. Whilst expectations are high for an uptick in the tourism and agricultural sectors in the coming months, Schäfer said the province was not out of the woods. Retaining and boosting investor confidence was critical. Commenting on other challenges, she said Eskom and the availability of energy was one of the biggest concerns at present. “At the tail end of 2018
we saw the re-introduction of load shedding which has a major impact on the economy. In addition, the economic situation that Eskom finds itself in, where revenue will not sustain the cost of its debt, will impact business and investor confidence. In the Western Cape, the province has focused on promoting the uptake of solar PV through its energy game changer in order to reduce the province’s reliance on energy from the Eskom grid. Going into 2019, we will continue to drive this in a bid to build a resilient economy.” Also concerning is the rail system in Cape Town. Ongoing arson attacks on trains has resulted in shortages of rail stock and an unreliable train service.