South African investment climate faces further hurdles

Subject

South African competition legislation concerns.

Significance

Draft amendments to South Africa’s 20-year-old competition legislation have been tabled in parliament, adding a new section that introduces a national security test for potential foreign takeover bids. The legislation is out for public comment and parliament will debate the new measures later this year. The government is aiming for them to be in place by end-2018.

Impacts

• Recently trumpeted foreign investment deals secured by Ramaphosa are largely ‘pledges’ and may prove underwhelming.
• An above-inflation pay deal for Eskom workers will undermine investor confidence in Ramaphosa’s reform drive.
• Ongoing corruption allegations against key officials, including the deputy president, will undermine the government's anti-graft rhetoric.