This week, a France-South Africa business forum will convene to discuss obstacles to investment in South Africa, including visa processes and infrastructure deficiencies. French firms operating or looking to invest in the country are closely watching the local government elections on November 4 for guidance on key municipalities like Johannesburg. They seek stability in municipal service delivery, including access to water, to inform their investment decisions.
The forum aims to strengthen trade, investment, innovation, and strategic partnerships between the two nations. With South Africa resolving its energy crisis, French companies are now more interested in exploring opportunities. Since 2019, €8.9bn of French investment has flowed into South Africa, with 480 French companies or subsidiaries operating in the country, employing over 70,000 people. President Cyril Ramaphosa recently announced France as the leading investor in South Africa.
However, French companies face hurdles, including cumbersome visa requirements and difficulties in accessing skills. The processing time and access to visas represent a challenge for companies, particularly when setting up a base and sourcing a local workforce. Home affairs minister Leon Schreiber recently launched the second phase of the trusted employer scheme to attract skills and manage immigration.
The business forum will focus on concrete measures to boost trade and create a more conducive operating environment. Discussions will cover broad-based black economic empowerment (BEE), water difficulties, and recommendations for improvement. Business France has been explaining BEE rules to French companies interested in South Africa, as they may not fully understand the policy.
South Africa is seeking to expand trade and investment ties with other countries amid strained relations with the US, its second-largest export destination. The US has suspended aid and imposed punitive tariffs on South Africa due to policy differences, including land expropriation and black empowerment policies. Washington has expressed concerns about the application of BEE policies.
At the 6th South African investment conference in March, French companies pledged to invest R20.7bn. According to the French-South African Chamber of Commerce & Industry, bilateral trade reached about €3.2bn in 2024, with French exports to South Africa valued at €1.7bn and imports at €1.5bn. South Africa remains France's biggest customer and third-biggest supplier in Sub-Saharan Africa.
The forum will draw up recommendations for a more conducive operating environment to boost trade, investment, innovation, and strategic partnerships. French companies are looking for opportunities in South Africa, and the country is working to address the challenges they face. By addressing these hurdles, both nations aim to strengthen their economic ties and promote growth.
Key points
- French companies face hurdles, including cumbersome visa requirements and difficulties in accessing skills.
- The business forum aims to strengthen trade, investment, innovation, and strategic partnerships between France and South Africa.
- South Africa is seeking to expand trade and investment ties with other countries amid strained relations with the US.
