Businessman and chairman of the Free Market Foundation, Herman Mashaba today criticised Government for rushing through controversial bills that would irreparably harm the economy, investor confidence and the country’s ability to create jobs and stability.

One of the bills in question is the Private Security Industry Regulatory Amendment Bill which, if signed into law by President Jacob Zuma, will force foreign owned private security firms like ADT, Chubb, Securitas and Panasonic to sell 51% of their companies to South Africans.

“We fought against apartheid to free our people and the economy from draconian policies that stifled growth and repelled foreign direct investment.  I am dismayed that the current administration would consider embracing a business unfriendly policy environment that will effectively cripple the economy and our ability to address inequality, poverty and unemployment,” says Mr Mashaba.

Mashaba says the country’s ability to attract foreign investors to fund and invest in the economy is an important mechanism to fuel growth. 

“Foreign investment, especially in the resources, manufacturing, infrastructure and industrial sectors is the critical catalyst required to create the kind of jobs that are required in South Africa.  We simply cannot grow the economy without foreign partners.  They are already looking at South Africa with suspicion and we need to remedy this before more damage is done.

“It would do the Minister of Police good to consider the national security implications if more South Africans find themselves without jobs.  Unemployment leads to social instability and this should be the Minister’s primary concern,” says Mr Mashaba.

Mr Mashaba’s company, Lephatsi Investments, owns 30% of Swedish private security firm Securitas.

“Companies like Securitas entered the South African market with confidence that the political and policy landscape provides protection against expropriation of their assets,” he says.

Mashaba believes that the Private Security Regulatory Amendment Bill is a benchmark framework that, if implemented, could open the door for Government to apply the same principles of nationalisation to other industries.

“If this bill is signed into law it is going to send strong signals throughout the business community that their industry may well be next on the list for forced dilution of ownership,” he says.

In its current form, the Private Security Bill will include companies that manufacture, distribute or supply equipment to the private security industry which includes multinationals like Panasonic, Sony, Honeywell and Bosch. 

“Instead of chasing respected companies away, we need to look at the value that international companies bring to our country.  Not only in terms of their investment in our economy and their ability to create thousands of jobs, but also in terms of skills transfer, knowledge sharing and the contributions that they make to social responsibility and development,” says Mr Mashaba.

Furthermore, Securitas and the other foreign owned private security firms are fully committed to black economic empowerment and transformation. Securitas is a level 2 rated BBBEE firm and achieved a full score under the BBBEE scorecard on Enterprise Development for the past 3 years.

“As a black investor and businessman, I believe it’s unfair to expect our partners to relinquish 51% or more of their business.”