Disappointed’ South Africa Summons Ambassadors on FDI Memo

JOHANNESBURG (Capital Markets in Africa) – South Africa’s Department of International Relations and Cooperation expressed “disappointment” with five embassies for telling President Cyril Ramaphosa that foreign investment is at risk because of the country’s failure to prosecute people for government corruption.

The decision by the U.S., the U.K., Germany, the Netherlands and Switzerland to send a memorandum to the presidency instead of communicating through the department is a “departure from diplomatic practice,” the department said in a statement on the government’s website Sunday.

The heads of the countries’ diplomatic missions met with department Director General Kgabo Mahoai, where the parties agreed that “proper diplomatic channels and protocols will be followed” in future, the department said in a statement distributed Monday.

The Sunday Times newspaper reported that the five countries wrote a memo to Ramaphosa, stating they’re concerned about South Africa’s frequent changes to policies for industries including mining and the protection of intellectual property rights. The nations accounted for 57 percent of South Africa’s foreign direct investment by the end of 2017, central bank data show.

The memo was written in June last year, and didn’t represent a breach of diplomatic protocol because it merely set down talking points, wasn’t signed by them and was shared with many government officials, the Daily Maverick reported Monday, citing diplomats it didn’t identify.

South Africa began an inquiry into state corruption last year after Ramaphosa became president and promised to root out graft. He also pledged to raise $100 billion in investment to boost a sluggish economy and employment. While many people have been named in the corruption probe, there have been no arrests.

Source: Bloomberg Business News