German firms upbeat about SA

8 October 2004

German businesses are upbeat about South Africa’s economy, and say investment returns are good, productivity is praiseworthy, and infrastructure cheap.

That’s according to the latest annual survey of medium and large-sized German companies operating in South Africa, conducted by the Southern Africa German Chamber of Commerce and Industry.

The survey, which has been published for the past eight years, finds that nearly all German businesses operating locally – 95% of respondents – consider South Africa’s economic climate to be positive.

While German companies regard the productivity of the local workforce highly, other positive factors include returns on investment, the availability of cheap and reliable electric power, and free competition.

There are, however, some negatives. Companies are not so upbeat about labour regulations. According to Business Day, more than 60% of respondents were pessimistic, compared to 37% in 2002. Only 10% were optimistic about labour laws, compared with 36% in 2002.

Other factors influencing businesses negatively in South Africa include violence, corruption, crime and “incompetence within the public sector”, Business Day reports.

The government’s policy on HIV/Aids has also been poorly received by the German business community, with 87% of respondents describing it as “bad”.

At the same time, perhaps ironically, 45% of respondents believe the pandemic has no influence on their own businesses, or only a marginal effect. Only about 48% have adopted measures against the disease.

An exception to this is Volkswagen SA, which has a comprehensive HIV/Aids workplace programme in place – including voluntary prevalence testing of employees.

Recent studies show that businesses generally have done little in South Africa to help in the fight against HIV/AIDS, despite the devastating effect the pandemic is having on the local work force, as well as on the economy and productivity.

According to Business Day, 40% of respondents to the survey have introduced a black economic empowerment (BEE) policy or plan, while 25% said they have no BEE strategy.

SouthAfrica.info reporter