Friday, 25 March 2022
The Fourth South African Investment Conference (SAIC) is under way at the Sandton Convention Centre, Johannesburg. The conference sets out to: showcase the investment opportunities available in the country; open the door to African investment growth opportunities; facilitate public and private collaboration for an infrastructure-led recovery; and enable economic growth through strong governance and partnerships.
At Good Governance Africa, we understand that the absence of good governance at a national, provincial, and local level negatively affects private enterprise growth, which ultimately influences the levels of investment in the country. The findings of the Zondo Commission reveal extensive governance failures. These governance issues need to be addressed as a matter of urgency to mitigate the resultant risks of bad governance on the micro and macro business environment.
Drill extensions at the Renergen Gas Project drilling site in Virginia, Free State, on 22 September 2021. A stable regulatory environment is essential for enabling mining investment in South Africa. Photo: Luca Sola/AFP
We urge both the private and public sectors to uphold the principles of good governance and encourage government to create an attractive investment landscape in South Africa by ensuring better governance. The importance of the link between governance, accountability and standards of living is seen in our Governance Coefficient, which shows that effective governance and better citizens’ voice and accountability is linked with higher income levels.
Mining is one of the key flywheels for catalysing broad-based development in South Africa. Due to poor governance, the country has failed to take advantage of the commodity boom since the turn of the century. A stable regulatory environment is essential for enabling mining investment in South Africa. With reference to President Cyril Ramaphosa’s 2022 State of the Nation address, backlogs in the processing of mining applications and granting of exploration rights and mining licences at the Department of Mineral Resources and Energy will need to be addressed.
Similarly, mining companies will need to consider the Environmental, Social and Governance (ESG) operational risks they face, and manage them effectively. ESG integration into the business practices of mining companies is a way to reduce regulatory risks and gain a social licence to operate. PricewaterhouseCooper’s Mine 2021 report noted that mining companies with good ESG ratings outperformed the market.
Good Governance Africa is well positioned to provide sound and effective insights for investments, as we believe that improving government effectiveness and strengthening citizens’ voice and accountability creates a narrow corridor in which private enterprise can flourish. For more information on how GGA can serve your business, click here:
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